Flexible Spending Account
A Flexible Spending Account (FSA) provides a tax-advantaged way for employees to pay for eligible out-of-pocket healthcare expenses, work-related dependent day care expenses, and work-related transportation expenses. The main advantage of an FSA is that employees do not pay federal income taxes or social security taxes on the amount they elect to contribute to their FSA. By participating in an FSA, employees lower their taxable income and therefore decrease the amount of taxes they pay and the employer saves on FICA contributions. It’s the benefit that benefits everyone.
Healthcare Spending Account
A healthcare spending account allows employees to use the pre-tax money set aside to pay for qualifying out-of-pocket health care, dental, vision or hearing expenses. Out-of-pocket expenses are those that are not covered by their existing insurance plans. These expenses include deductibles, coinsurance and co-pays and certain over-the-counter (OTC) expenses.
Dependent Care Account
A dependent day care spending account allows employees to use the pre-tax money set aside to pay for child or adult day care expenses. These expenses include day care, before-and-after school programs, nursery school or preschool, summer day camp and even adult day care.
Transportation Spending Account
A Transportation Spending Account allows employees to use money on a pre-tax basis to pay for qualified work-related commuting and parking expenses.