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Flexible Spending Accounts (FSA)

Flexible Spending Accounts

FSA Basics

Flexible Spending Accounts (FSAs) are comprised of two separate reimbursement accounts, a Health Care Reimbursement Account (HCA) and a Dependent Care Assistance Account (DCA). These two accounts provide employers and participants an opportunity to reduce their tax liability on money spent toward health care expenses and/or dependent daycare expenses. By putting this money aside pretax the participant pays no Federal, FICA or State taxes on the amount deducted from his/her pay.

Through the use of FSAs, participants can pay their out-of-pocket health care and/or dependent daycare expenses using pre-tax dollars. The HCA account can be used for expenses related to health care, dental, vision, and even some over-the-counter (OTC) products. Dependent daycare expenses that are incurred so a participant (and spouse, if applicable) can be employed may be reimbursed by a DCA account.

Each year during open enrollment, participants are given the opportunity to estimate the amount of money they expect to spend on out-of-pocket health and/or dependent daycare services for the upcoming year. The election is prorated over the course of the year and deducted from the participant's paycheck. When the participant incurs out-of-pocket health and/or dependent daycare expenses, they may request reimbursement from their Flexible Spending Account.

At the end of the plan year, employers may allow participants to have a two month and fifteen day extension to use any funds remaining, or rollover up to $500 of their unused FSA funds.

How Benefit Strategies can help

Flexible Spending AccountsBenefit Strategies helps almost 1,000 employers save money by offering this popular benefit. Benefit Strategies handles all aspects of FSA administration by offering plan design assistance, ongoing customer service, participant education and online reporting. Benefit Strategies believes in utilizing available technology to create efficiencies for our clients and participants, without sacrificing the human touch required to provide superior customer service.

Our website is a great resource for participants to find forms and resources needed to manage their FSA. Participants can also use a secure sign on to manage their individual FSA account online. Once online, participants can view their account balance, file manual claims and view their claims history. Employers are also given access to an online account where they can manage their FSA participants; access detailed reporting and notify Benefit Strategies of any change in participant status or benefits.

Debit card adds convenience!

Participants will also enjoy the added convenience of our PINless debit card service, which looks and works like a typical debit card simply without the PIN. As participants pay for eligible expenses with the card their FSA balance is reduced accordingly. All debit card transactions can be viewed online in the participants claim history.

Flexible Spending Accounts Save You Money!

Reimbursement Account Type Number of Participants   Annual Election   FICA Rate   FICA Tax Savings
HCA 130 x $1,000 x 7.65% = $9,945
DCA 25 x $3,000 x 7.65% = $5,738
Total Annual FICA Savings to the Employer = $15,683

Compliance you can count on

Keeping you in compliance is an important part of the service we offer. Our FSA compliance services include working with you to design your Plan Document, Summary Plan Description (SPD), and non-discrimination testing. Benefit Strategies is also your reliable source for the latest information and policy changes from the IRS and the U.S. Treasury Department.