Flexible Spending Account (FSA) – For Businesses with 5 or more employees
With the Blue by Design FSA (flexible spending account) employees can increase their take-home pay and reduce their taxes. They just set aside money they think they’ll spend for eligible medical expenses throughout the year, and taxes won’t be deducted from that money! In other words, the money they use to pay for these expenses is tax free, which can result in significant tax savings for your employees.
How the Blue by Design FSA works
Before the plan year begins, employees estimate eligible medical expenses for
the upcoming plan year. They specify the amount of money they want to allocate
to the flexible spending accounts. The money set aside is automatically deducted
from your employee’s salary on a pretax basis and deposited into the
FSA before federal, state and FICA taxes are withheld. Employees may obtain
reimbursement for eligible out-of-pocket medical, dental or vision expenses
received by them or their eligible dependents.
Employee advantages:
• Pay less in federal, state, and FICA taxes
• Gain more control over how benefit dollars are spent
• Have more disposable income
• Have a convenient way to pay for medical expenses with tax-free dollars
More Information