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IOI Payroll Services Inc.
Section 125 Plan
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, employees are reimbursed from this account for expenses such as: healthcare and dependent daycare.
Reimbursements of qualified expenses are tax free. When employees use tax-free dollars to pay for these expenses, they realize an increase in spending power and substantial tax savings. The company saves too — about 8% (FICA match) on every dollar employees contribute to the plan.
What are the employer benefits of having an FSA Plan?
What are the employee benefits of having an FSA Plan?
What happens to the money that an employee puts into the FSA Plan?