Flexible Spending Accounts (FSAs)

Give employees Flexible Spending Account (FSA) benefits with the technology and resources that makes saving and spending simple for healthcare and dependent care expenses.
 

What are the benefits of FSAs with Flex?

Your organization gets to enjoy tax savings on recurring expenses with Healthcare Flexible Spending Accounts, Dependent Care Flexible Spending Accounts and Limited Purpose FSAs. Plus, you get peace of mind knowing that we are here to guide you through all plan stages!  
 
As a trusted FSA administrator since 1988, we offer a simplified plan experience for you and your employees, including:

View More Plan Features

Educational Guidance

  • Complimentary review of benefit plan designs and strategies
  • On-site or online enrollment meetings with dedicated education specialists
  • Pre- and post-enrollment communications and educational materials
  • Free HRCI accredited webinars from FlexUNIVERSITY

Plan Options

  • FSA Debit Cards – Easy way to pay for Healthcare FSA purchases without having to wait for reimbursement checks!
  • Carrier Claims Feeds - Automatic and paperless claims processing via CrossTech or Easy Enrollment
    • Secure information transfer between Flex and insurance carriers, third-party administrators and pharmacy benefits managers
    • Available to participants of our FSAs that are also enrolled in one of the following health, dental and vision plans:
      • Aetna
      • Anthem
      • Blue Cross and Blue Shield of Illinois, along with many other BCBS plans
      • Cigna
      • Delta Dental
      • Guardian
      • Humana
      • IHS Health Solutions
      • Kaiser Permanente
      • MetLife
      • Principal
      • UnitedHealthcare
      • UNUM
      • And more! (Check with Flex on current plan availability)
  • Multiple funding options
  • Flexible reimbursement frequency options including, daily and weekly
  • 2 ½ month extended grace period available
  • Rollover of up to $500 available for the Healthcare FSA

Personalized Service

  • Live one-on-one customer care with dedicated specialists 
  • Web site - Integrated real time plan access for all your Flex Plans
    • Plan Administrators
      • Review account balances and activity
      • Make administrative updates
      • View payment history and plan details
      • Access participant, debit card and funding reports
      • Download forms
      • Submit help tickets, and more!
    • Participants
      • Review account balances and activity
      • Submit claims online, upload receipts and view status
      • Access payment history and plan information
      • Add and update banking information
      • Download Forms

Request a free, custom proposal to learn more about FSAs from Flex!

 

 

What are Flexible Spending Accounts (FSAs)?

A Flexible Spending Account or FSA is a tax-advantaged benefit program established by an employer for their employees. This consumer driven account allows employees to use pre-tax money for eligible Section 213d healthcare and dependent care expenses. For plan years in 2023, employees may elect up to $3,050 (per participant) for healthcare expenses and $5,000 (per household) for dependent care expenses to be placed into an FSA on a pre-tax basis. There are three different types of accounts that can be offered by an employer through this program a Healthcare FSA, a Dependent Care Spending Account or a Limited Purpose FSA.

How Does an FSA Work?

The total employee election for an FSA is divided by the number of pay periods and deducted on a pre-tax basis from the employee’s paycheck. As a result, the employee’s taxable income is reduced by the election amount and therefore reduces the amount of taxes the employee will have to pay. Employers also save in payroll taxes for every dollar an employee elects, which results in a mutually beneficial program.

What is a Healthcare FSA?

Healthcare FSAs allow employees to pre-tax up to $3,050 (per participant) of eligible expenses for plan years in 2023. The FSA monies set aside by the employees are then reimbursed to the employee throughout the plan year as the eligible healthcare expenses are incurred, submitted and verified by the plan administrator. FSA eligible expenses include doctor visit co-pays, prescription co-pays, vision care, dental expenses and more.

Click here to download a complete listing of FSA eligible expenses.

In the case of Healthcare FSAs, another benefit of this program is that all funds are available on day 1 of the plan year. This means employees do not have to wait for these funds to accumulate in their account to submit claims.

How Does a Healthcare FSA Work?

Example: Zoe elects $1,000 for the Healthcare FSA plan year that starts on January 1, 2023, and has 24 pay periods in the year. She will see a pre-tax deduction in each paycheck of $41.67.
Zoe and her daughter Amy visit the eye doctor to order new contacts and glasses for a total cost of $1,000 on January 2, 2023. Even though the first deduction of $41.67 will not be taken out until the first paycheck issued on January 15, 2018, Zoe can submit a claim on January 2, 2023 to the FSA administrator with documentation and be reimbursed for the full $1,000. The payroll deductions will continue to take place after the reimbursement as scheduled throughout the year to make up the $1,000 FSA reimbursement that she received.
 
In addition, Zoe’s taxable income was reduced by $1,000 and she is in the 25% tax bracket. So, she will save approximately $250 in taxes by participating in this program. Plus, Zoe and Amy were able to get the services at the time they needed them because an FSA allows the first day access to funds.
 

What is a Dependent Care Spending Account?

Dependent Care Spending Accounts allow employees to pre-tax up to $5,000 (per household) of eligible expenses. The expenses must be for the care of dependents claimed on the employee’s federal tax return, who live with the employee and incurred while the employee is at work. Most commonly the account is used to reimburse daycare expenses for children under the age of 13. But, it can also apply for children of any age that are physically or mentally incapable of self-care. In addition, adult daycare for senior citizen dependents is also eligible as long as they are claimed as a dependent on the employee’s federal tax return.

Dependent Care Spending Accounts are funded the same way as a Healthcare FSA, but are reimbursed slightly differently. In order to reimburse FSA eligible expenses, the employee must have the funds available in the account.

How Does a Dependent Care Spending Account FSA Work

Example: Zoe elects $5,000 for the Dependent Care Spending Account FSA plan year that starts on January 1, 2023, and has 24 pay periods in the year. She will see a pre-tax deduction in each paycheck of $208.33.
 
Zoe’s daughter Amy goes to before-and-after school care while she is at work at a cost of $100 per week. Zoe incurs an eligible $100 expense the first week of January that she pays for on January 7, 2023. However, she must wait until after her first deduction of $208.33 is taken on January 15, 2023 to submit her claim to the FSA Administrator for reimbursement. Moving forward, Zoe can reimburse herself after the eligible expense has been incurred as long as there are funds available.
 
In addition, Zoe’s taxable income was reduced by $5,000 and she is in the 25% tax bracket. So, she will save approximately $1,250 in taxes by participating in the Dependent Care Spending Account FSA.
 

What is a Limited Purpose FSA

In cases where an employee has a High-Deductible Health Plan (HDHP) and Health Savings Account (HSA), a Limited Purpose FSA Healthcare may be established. Like a Healthcare FSA, this account allows employees to pre-tax up to $3,050 (per participant) of eligible expenses for plan years in 2023. However, Limited Purpose FSA eligible expenses are “limited” to reimburse dental and vision expenses. At the employer’s discretion, eligible medical expenses incurred after the deductible may also be reimbursable.

As in the case of Healthcare FSAs, another benefit of the Limited Purpose FSA is that all funds are available on day 1 of the plan year. This means employees do not have to wait for these funds to accumulate in their account to submit claims to the FSA administrator.

Request a free, custom proposal to learn more about FSAs from Flex!

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