Flexible Spending Accounts

Flexible spending accounts (FSAs) are most usually funded by employees. The funds are pretax deductions taken from the paycheck which reduces the employee's taxable income. The purpose of the account is to pay for medical expenses that are above and beyond what a third-party carrier will pay.

One restriction on flexible spending accounts is if you do not use the money during the year, you lose it. It does not carry over like other types of consumer-driven plans. This requires the employee to accurately predict the amount of money that will be needed throughout the year for excess medical expenses. It is possible, though, to be reimbursed for excess medical expense even if the occurrence is before there are enough funds in the FSA. The expense must not exceed the total for the year.

Flexible Spending Accounts for Medications
Recent changes in the rules for payment through flexible spending accounts allow for over-the-counter medication to qualify as a medical expense. Before this change was made, all OTC meds were strictly out-of-pocket expenses. Monthly insurance premiums are eligible to include in the amount for the yearly flexible spending account.

Choosing the right package can benefit both employers and employees, so working with a professional is key. We can provide you with all the information and assistance needed to offer the option of flexible spending accounts to your employees. The HR Consulting Group, Inc. has over 20 years of experience helping all kinds and sizes of companies with workable and profitable employee benefit packages.