Section 125 -
Sometimes referred to as a cafeteria plan,
flex plan, or a Section 125 plan, a Flexible Spending Account
(FSA) lets employees set aside a certain amount of each
paycheck into an account — before paying income taxes.
During the year, participants have access to this account
for reimbursement of expenses — not covered by insurance
— that they regularly pay for, such as:
- Deductibles, co-pays, and other eligible expenses not
covered by insurance.
- Prescription drugs and medical supplies.
- Over-the-counter drugs that are medically necessary like
allergy medications, aspirin, or antacids.
- Dietary supplements with doctor's letter of medical necessity.
- Dental services, orthodontics, and dentures.
- Eyeglasses, contacts, solutions, and eye surgery.
- Weight-loss programs with doctor's letter of medical necessity.
- Weight-loss over-the-counter drugs with doctor's letter
of medical necessity.
- Chiropractic services.
- Vitamins with doctor's letter of medical necessity.
- Psychiatric care and psychologist's fees.
- Smoking cessation programs.
- Smoking cessation over-the-counter drugs.
- Adult and child daycare services.
- Adoption expenses.
- Transportation and parking expenses (Section 132 Plan).
When employees use tax-free dollars to pay for these expenses,
they realize an increase in their spending power, and substantial
The company saves too — about 8% (FICA match) on
every dollar employees contribute to the plan.
Please call us at 800-986-4786 for
more information about setting up a Section 125 plan.