What is an FSA?
A flexible spending account (FSA) is an employer sponsored benefit account that allows employees to set aside pre-tax funds to help pay for eligible out-of-pocket healthcare expenses. Offering an FSA is a great way to stretch benefit dollars. By using before-tax dollars in an FSA for eligible out-of-pocket medical and dependent care expenses, participants are able to enjoy tax savings and increased take-home pay. And that makes real sense.
Employer Benefits:
- FICA tax savings (lower reported wages)
- Enhanced overall benefits package
- Improved employee engagement and satisfaction
Employee Benefits:
- Lower taxable income (increased take-home pay)
- Receive up to 30% savings on qualified healthcare expenses
Types of FSAs
HEALTHCARE FSA
With a Healthcare FSA, your employees can pay for eligible healthcare expenses on a pre-tax basis, which reduces the amount paid for federal income tax, FICA tax and, as applicable, their state income taxes. Healthcare FSAs cover an extensive list of eligible, reimbursable expenses, as defined by IRS Code Section 213(d).
LIMITED PURPOSE FSA
If you offer an HSA compatible high deductible health plan paired with a health savings account (HSA), you may offer a limited purpose FSA to those employees that have an HSA. The limited purpose FSA is designed to complement the HSA and may be established to pay for eligible vision and dental expenses. Medical expenses are not permitted, because the tax-favored HSA is used to fund those costs.
DEPENDENT CARE FSA
Dependent Care FSAs (DCAs) gives your employees the ability to pay for work-related dependent care expenses with pre-tax dollars, which allows them to save on federal income tax, FICA tax and, as applicable, their state income taxes. DCAs may provide your employees more tax advantages than the federal income tax credit.
With an FSA from Peak One, Participants can:
- Enjoy tax savings with pre-tax contributions and tax-free distributions.
- Access account balances, transaction and payment history
- Submit claims and upload supporting documentation
- View and manage debit cards
- Manage communication settings and setup text alerts
- Get one-click answers to benefits questions.
Employee Engagement
- Full account details. View plan details and account history, including prior year activity.
- Multimedia education. Access educational videos and interactive calculators to learn more about health benefit accounts and make critical spend/save decisions.
- Manage claims. Submit new claims, upload receipts, and check claims status.
- Communications. View a complete history of account communications and manage personal preferences.
- Access savings. Take advantage of retail discounts, coupons and online shopping offers through FSAStore.
- Self-service. Take advantage of expanded account servicing options to manage debit cards, personal information and security settings.