125 Flexible Spending Accounts

What is a Flexible Spending Account?


Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Spending Account (FSA) lets employees set aside a certain amount of each paycheck into an account — before paying income taxes.

During the year, participants have access to this account for reimbursement of expenses — not covered by insurance — that they regularly pay for, such as:
  • Deductibles, co-pays, and other eligible expenses not covered by insurance.
  • Prescription drugs and medical supplies.
  • Over-the-counter drugs that are medically necessary like allergy medications, aspirin, or antacids. (Click here for a list.)
  • Dietary supplements and vitamins with doctor's letter of medical necessity.
  • Dental services, orthodontics, and dentures.
  • Eyeglasses, contacts, solutions, and eye surgery.
  • Weight-loss programs (associated with a specific disease).
  • Weight-loss over-the-counter drugs with doctor's letter of medical necessity.
  • Chiropractic services.
  • Vitamins with doctor's letter of medical necessity.
  • Psychiatric care and psychologist's fees.
  • Smoking-cessation programs.
  • Smoking-cessation over-the-counter drugs.
  • Adult and child daycare services.
  • Adoption expenses.
When employees use tax-free dollars to pay for these expenses, they realize an increase in their spending power, and substantial tax savings.
The company saves too — about 8% (FICA match) on every dollar employees contribute to the plan.
 

  PPI Section 125, FSA, Flex Plans
 
(800)-2-Payroll
Monday - Friday
8:00 - 5:00 PST
E-Contact Form