BeneFlex Flexible Spending Accounts
What is a Flexible Spending Account?
Medical Reimbursement Account
What Expenses are Eligible Under a Medical Reimbursement FSA?
Dependent Care Reimbursement Account
You can add a new employee benefit and lower your costs with a Flexible Spending Plan.
Flexible Spending Plans are more popular than ever! A recent survey revealed that about 75% of responding companies, regardless of size either have a plan or, are considering installing one. This same survey indicated that 85% of companies with over 100 employees either have a Flexible Spending Plan or intend to implement one in the next 12 months. Firms that institute Flexible Spending Plans find that they enhance benefit packages and increase morale and retention when employees are able to create accounts for Medical Reimbursement and Dependent Care that repay them for associated out-of-pocket expenses with pre-tax dollars.
Flexible Spending Plans provide a wise long-term benefit strategy. They present a framework for employers to control costs while enhancing benefit plan responsiveness and employee relations.
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) allows employees set aside a portion of their income free of all taxes into a reimbursement account enabling them to pay for eligible expenses. At the beginning of the plan year a participant estimates what expenses they expect to have during the plan year. The annual elections is divided by the number of pay periods in the year and deposited, pretax, into the participants FSA Account. Participants use the tax free money in their account to pay for eligible expenses throughout the plan year. There are 2 types of FSA accounts, Medical Reimbursement Account, and Dependent Care Account both accounts allow employees to pay for eligible expense with tax-free dollars.
Medical Reimbursement Account
A Medical Reimbursement account allows participants and their dependents to pay for eligible medical, dental and vision care expenses with pre-tax dollars. Typical expenses include eye exams, eyeglasses, eye surgery, contact lenses and solutions, dental visits, orthodontic care, medical examinations, mental healthcare, chiropractic services, prescription drugs, insurance co-pays and deductibles, and expenses that are not reimbursed by health insurance. Also, over-the-counter drugs that are medically necessary for example, allergy medications, aspirin, or antacids For more information about OTC click here. For a more complete list of what is covered under a Medical Reimbursement Account click here.
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Dependent Care Reimbursement Account
The Dependent Care Account allows participants to pay for eligible child and elder care expenses provided by qualified caregivers. To be eligible, your dependent must be claimed on your income tax return, be younger than age 13 or, be physically or, mentally incapable of caring for him/herself, and the dependent must be living in your house. Typical expenses include:
What Expenses are Eligible?
- Day Care for a child under the age of 13.
- After-School program or, day camp for a child under the age of 13.
- Nanny expense, for services provided inside your home.
- Nursery school and preschool expense.
- Fees paid to a Grandparent, Friend or Relative for child care.
- Visiting Nurses Expense*
- Diaper Service*
* If the expense is for a dependent that is physically or mentally disabled then, these expenses are eligible.
Expenses not permitted under a Dependent Care Account include:
- Kindergarten fees.
- Elementary school expenses for a child in first grade or higher.
- Expenses paid to a housekeeper, maid, cook, etc. are not eligible, except where incidental to child or dependent adult care.
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