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How you save

A Flexible Spending Account (FSA), is governed by IRC Section 125, allows employees to be reimbursed when they pay out-of-pocket for medical/dependent care expenses with pre-tax dollars.

 

Employee Savings Example

Annual Flexible Spending Account Tax Savings-example *   With the Plan Without the Plan
Annual Earnings   $40,000 $40,000
FSA Contribution - $2,500  
Taxable Income = $37,500 $40,000
Estimated Federal & Social Security Taxes 24%   $9,000 $9,600
Adjusted Income = $28,500 $30,400
Additional Medical & Dependent Care Expenses -   $2,500
Take Home Pay = $28,500 $27,900
Total Employee Annual Tax Savings   $600 Savings  

As an employee, you can save by using tax free dollars to help pay for medical/dependent care expenses