FSA Participant Benefits
Depending upon what type of flexible benefit plans your employer offers - Healthcare FSA, Dependent Care FSA, and transit/parking benefits - you can set aside money to pay for eligible expenses through pre-tax payroll deduction.
Tax savings include federal income tax, and in most jurisdictions, state and local income taxes. In addition, employees do not pay Social Security and Medicare tax (currently 7.65%) on the amount excluded from income.
Healthcare FSAs can be set up without a health insurance plan so more employees can participate.
Both employers and employees may contribute to the Healthcare FSA and Transit/Parking benefit. Only employees may contribute to the Dependent Care FSA. Employers cannot restrict the use of funds, even if they contribute. Use of funds is dictated by IRS code. Healthcare FSA and Dependent Care FSA plans are subject to the "use it or lose it" rule. Funds not used in the current plan year do not roll over to subsequent plan years.
For more information on Flexible Benefit Plans, go to Products and Services.