What is a Flexible Spending Account?
A flexible spending account (FSA) allows employees to set aside a certain amount from each paycheck into an account - before paying income taxes. During the year, employees are reimbursed from this account for expenses such as healthcare and dependent daycare.
- Reimbursements of qualified expenses are tax-free. Everyone wins with tax-free benefits, from the CEO to the mailroom.
- Depending on their tax bracket, employees can save as much as 40% on everyday expenses like over-the-counter items and eye glasses or contacts.
- Employers save 7.65% in FICA on every dollar that employees direct towards tax free benefit plans, which can more than offset the cost of administration. Happy employees show greater productivity and fewer turnovers!
Let Preferred Benefits assist your company with choosing an FSA administrator, initial plan implementation, administration of the plan, and employee education. |
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