Quick Tip: Benefits of a Flexible Spending Account - Mackoul Risk Solutions | Condominium and Co-op Insurance on Long Island, NY Skip to main content

Quick Tip: Benefits of a Flexible Spending Account

By October 23, 2017 April 15th, 2018 Blog, Employee Benefits, Quick Tips

Vice President, Employee Benefits, Rebecca Scandaliato explains why flexible spending accounts benefit both employers and employees.

A Flexible Spending Account (FSA) allows employees to designate a specified amount of money to be utilized on a tax-free basis through a voluntary salary reduction on qualified medical expenses.

The maximum amount of salary reduction an employee can make is $2,600 per year. Health FSAs are subject to “Use-it- or-Lose- It”, with exceptions for a Grace Period or $500 carryover.

The FSA is a win-win for both employees and employers, as employees save 25% or more on their out of pocket medical expenses and employers save 7.65% by not matching FICA and Medicare taxes on those same funds. Sufficient enrollment in an FSA typically results in a net REDUCTION in benefits spend by the employer.

For more information, please contact us.