What is a Flexible Spending Account (FSA)?
A flexible spending account is a special employee benefit offered by your employer. From this unique account you can set aside money from your paycheck without ever paying tax on it. You then use this tax free money to pay for things you are already buying. Eligible expenses include medical, vision, dental and hearing expenses […]
How do FSAs work?
At the beginning of each plan year, you need to do a little budgeting. You need to decide how much money you plan to send on qualifying expenses in the coming year. Based on this budgeting process, contributions are then made through payroll deduction into your FSA. These contributions are made on a tax free […]
Which type of health FSA is right for me?
There are choices with health care FSAs and the one for you depends on your specific situation. A general purpose health care FSA provides reimbursement of medical, vision and dental expenses for you, your spouse and your kids. A limited purpose health care FSA is for those who contribute to a health savings account (HSA) […]
What happens to amounts left over in my accounts if I don’t spend it?
FSAs are typically use it or lose it during the plan year. You have 90 days after the end of the plan year to submit all of your receipts for reimbursement for services incurred during the plan year. This is an IRS rule. Your employer doesn’t want you to leave any money in your account. […]
What happens if I terminate employment?
All deposits to your account will end with your last paycheck. You may continue to submit requests for reimbursement for eligible expenses incurred while you were employed.
What happens if I am laid off or take an unpaid leave of absence?
You may not be reimbursed for expenses incurred while you were on leave (paid or unpaid leave) as you were not actively at work or looking for employment.
Can I change my election amount during the plan year?
Yes. However, the reasons you can change your contribution for group insurance premiums and the health care FSA are limited. Permissible changes are primarily due to changes in eligibility. The following circumstances are examples of “life events” that may permit an election to be changed: marriage, divorce, death, birth, adoption, change of employment status that […]
Beyond paying for my group insurance premium pre-tax, do I have to put additional money into an FSA?
No. Participation is optional beyond your group insurance premiums. However, if you do not use your flex account to pay for allowable expenses, you will be paying too much in taxes.
What is a Section 125 plan?
Section 125 is the part of the Internal Revenue Code that allows employees to pay for certain group benefits with pre-tax dollars. The plan does not provide any benefits, but rather permits employees to pay for the coverage on a pre-tax basis through salary reduction. These plans are commonly called premium only plans (POP) or […]
Who can establish a Section 125 plan?
A Section 125 Plan may be established for any single employer or certain “related” employers. The employer installing the plan may be of any ownership form (sole-proprietor, corporation, partnership, etc.).