- An employee decides how much of their salary should be set aside before taxes are calculated.
- This amount is automatically deducted from their paycheck every pay period, just like any other payroll deduction, and is deposited into their FSA account.
- The employees would pay their out-of-pocket expenses up-front, then submit a claim and documentation and a reimbursement is made from their own account.
Out-of-pocket expenses include: | |
· Eyeglasses and contact lenses | · Orthodontia |
· Medical insurance deductibles | · Chiropractic services |
· Prescriptions | · Dental treatments |
· Co-payments | · X-ray and laboratory services |
The flexibility of an FSA plan makes it the best option for small to medium sized businesses.