Increased flexibility for both employers and employees FSAs, including dependent care flexible spending accounts (DCFSAs) and limited purpose flexible spending accounts (LPFSAs), transit/parking accounts (TFSA) allow the account holder to set aside pre-tax money to pay for eligible expenses including healthcare, dependent care costs, or transit/parking expenses throughout the year. Employees voluntarily establish an annual election for each account type.
FSA features include:
Advantages for Employers:
Advantages for Employees:
The ESG FSAFlex program is a comprehensive and efficient service that simplifies the administration of Section 125 Flexible Spending Plans. This system helps employers manage employee spending accounts, ensures plan compliance, and ultimately saves employers and employees money.
The concept of Section 125 flexible spending originated in 1978 and allows employees to use pre-tax money to cover medical premiums, out-of-pocket expenses, and dependent care expenses. By participating in this program, employees can enjoy significant tax savings, increasing their take-home pay without additional costs to the employer. The tax savings typically outweigh the administrative costs involved.
Flexible Spending Accounts (FSAs) can be customized to include various benefits for EMPLOYEES, such as:
With FSAFlex System, EMPLOYERS can unlock a host of benefits, including:
The IRS released 2024 contribution limits for medical flexible spending accounts (medical FSAs), commuter benefits, and more as part of Revenue Procedure 2023-24. These limits undergo annual adjustments to account for inflation.
A Flexible Spending Account (FSA) empowers employees to allocate or set aside a specific portion of each paycheck into an account, free from federal, state, social security, or Medicare income taxes.
Throughout the year, participants have full access to these funds for reimbursement of qualified expenses. They can conveniently access their funds using the FSA Debit Card (optional, depending on the employer), with most point-of-sale transactions being automatically approved by assigned SKU number using a proprietary audit database (although some purchases may require additional documentation). Manual claims are processed daily, and reimbursements are typically deposited directly into participants' bank accounts.
Remember to consider your financial capabilities and anticipated expenses when deciding on the optimal combination of HSA and Limited Purpose FSA contributions. By using these accounts wisely, you can maximize your savings while effectively covering your medical, dental, and vision needs.
There are thousands of eligible items. The list includes but is not limited to:
Copays, coinsurance, insurance premiums
Doctor visits and surgeries
Over-the-counter medications (first aid, allergy, asthma, cold/flu, heartburn, etc.)
Birthing and lamaze classes
Dental and orthodontia
Vision expenses, such as frames, contacts, prescription sunglasses, etc.