Your employer has initiated a program that allows you to pay for qualifying medical, dental and vision expenses, dependent care expenses, and insurance premiums with pre-tax dollars. This program is called a Section 125 Plan or Flexible Benefits (FSA) Plan.
Before each Plan year, you will elect to deposit money throughout the year to be reserved in an account for your use. More specifically you will:
- Decide before the Plan Year how much your total deposit for the year will be.
- Use the money only to pay for eligible medical, dental and vision care expenses that are not covered by any insurance plan, dependent care expenses (so that you, or you and your spouse, may work), and/or your portion of health and dental (and other qualifying employer sponsored plans) insurance premiums (your contribution towards these premiums).
- Receive the benefit of immediate tax relief as the money deposited in your account is deducted from your pay before it is taxed.
On the money that you elect to deposit in your account, you will save:
- FICA withholding tax (Social Security & Medicare)
- Federal withholding tax
- State withholding tax (not applicable in some states)
You will want to estimate:
- Medical, dental and vision expenses you can anticipate for the upcoming year that are not covered by your current insurance benefits. This might include deductibles, co-pays, or any type of out of pocket expense that qualify for reimbursement under this plan. Check out the list of eligible expenses on this web site or contact EBS Customer Service if you aren’t sure if your expenses are eligible.
- Dependent Care Expenses for the next Plan Year - Check out the list of eligible expenses on this web site or contact EBS Customer Service if you aren’t sure if your expenses are eligible.
|
