FSA Employer Overview

 

Another Valuable Benefit That Helps Reduce Taxes And Increase Spendable Income

What is it?

A Health Care Flexible Spending Account (FSA) allows your employees to save both FICA (7.65%) and Federal Income Tax (10%-35%) on qualifying health care expenses for you, your spouse, and your dependents.  In Ohio, both State and Municipal taxes are exempt, too

What are qualified health care expenses?

Expenses incurred for the diagnosis, treatment or prevention of disease, or for treatments affecting any part or function of the body. Common eligible expenses include co-pays for prescriptions & office visits, the deductibles in your medical, dental, & vision plans, crowns, orthodontia, Lasik eye surgery, glasses, contact lens solution, physical therapy, Acupuncture, mental health services, and over-the-counter drugs.

What kind of expenses are not eligible?

	- Expenses already reimbursed by your insurance.
	- Expenses meant for one's general health (i.e. vitamins and first aid supplies).
	- Expenses solely for cosmetic reasons.

How does the plan work?

Each pay period, the employer will deduct the amount you elected to have withheld from your paycheck. No FICA or federal income taxes, state or municipal taxes will be deducted from the elected amount. These funds will be held in a disbursement account in the employees name until a claim is made for qualifying expenses.

How does an employee participate?

	- Estimate the out of pocket expenses you, your spouse, and your dependents will incur in the coming plan year.
	- Add up your deductibles, prescriptions and office visit co-pays, and other eligible expenses.
	- Plan Ahead and go to your providers. Find out if you'll need any dental or vision care in the next 12 months. Crowns? Braces? Contacts? Glasses? Do you want more expensive frames for your glasses than your vision plan allows?
	- Total it all together to come up with your annual election amount.

 

When does an employee elect to participate?

Enrollment commences each year during the open enrollment period and prior to the plan anniversary date.

What is the advantage for the employer?

	- No FICA Sharing for the Employer
	- A Valuable Perk for the Employee that Can Be Offered at NO ADDITIONAL EXPENSE

(As with any tax law, there are rules that may not be attractive.)