Section 125 - Flexible Spending Accounts

Flexible Spending Accounts (FSA) are one of the most flexible and beneficial aspects of a Section 125 Cafeteria Plan. With a Flexible Spending Account, employees can redirect a portion of their pre-tax salary into a tax free spending account. Employees typically contribute up to $3,600 per year to the medical plan and up to $5,000 per year for the dependent care plan, depending on the employer's guidelines. These funds can then be used to pay eligible medical and dependent care expenses.  

Employees should be aware of a significant restriction on FSA monies. All money redirected into the cafeteria plan must be used to pay legitimate expenses during the term of the plan. This means any money left in the account at the end of the plan year is returned to the employer. Because of this "use it or lose it" restriction, it is best to be conservative when enrolling in an FSA.

For more information or to download SDSA forms, click here.		For more information or to download TASC forms, click here.