Flexible Spending Account

A Flexible Spending Account (FSA) is a tax-favored account that allows employees to have a set amount deducted from payroll on a pre-tax basis, saving both the employer and employee FICA taxes of 7.65% of the contributions. The employer may have a reduced unemployment tax liability. The employee reduces his or her federal income tax liability and in most cases state income tax liability.

Health FSA

With a Health FSA, funds can be used to pay for eligible medical expenses not covered under other insurance. Eligible expenses include:

  • Doctor’s office and prescription drug co-pays

  • Medical deductibles and co-insurance

  • Approved over-the-counter items

  • Vision and dental costs

  • Chiropractic services

Dependent Care FSA

Under a Dependent Care FSA, funds can be used to pay for eligible childcare and other dependent expenses. Eligible expenses include:

  • Daycare

  • Nursery school

  • Before and after school care

  • Summer day camp

  • Care for mentally or physically handicapped over age 13