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Flexible Spending Accounts

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    • Healthcare Flexible Spending Account (FSA)

    Empower Your Healthcare Finances.

    Take charge of your healthcare costs and save money with a Healthcare Flexible Spending Account (FSA). By contributing pre-tax earnings to an FSA, you can maximize your savings on health care expenses. 

    The Healthcare FSA is specifically designed to help you cover IRS-eligible expenses, including medical, vision, dental, and other out-of-pocket healthcare costs. With an FSA, you have the opportunity to allocate pre-tax dollars for these expenses, reducing your taxable income and potentially saving on taxes. 

    Additionally, depending on the FSA plan’s rules, you may have the flexibility to carry over unused funds to the following plan year, maximizing your healthcare savings. Don’t miss out on the chance to take control of your healthcare finances and save with an FSA. 

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    What Is an FSA?

    A Flexible Spending Account (FSA) is a tax-advantaged financial account offered by employers in the United States. It allows employees to set aside a portion of their pre-tax salary to cover eligible healthcare and dependent care expenses.

    By contributing to an FSA, employees reduce their taxable income, resulting in potential tax savings. FSAs typically cover a wide range of qualified expenses, including medical and dental expenses, prescription medications, vision care, and certain dependent care costs.

    However, FSAs operate on a “use-it-or-lose-it” rule, meaning any unused funds must be spent within the plan year, although some plans offer grace periods or limited carryover provisions.

    What Expenses Can an FSA Cover?

    Flexible Spending Accounts (FSAs) can cover a wide range of eligible expenses. Healthcare FSAs can be used for various medical and dental expenses. Below is a list of examples of medical and vision related expenses.

    Medical expenses:

    Doctor’s visits
    Hospital fees
    Prescription medications
    Over-the-counter medicines with a doctor’s prescription
    Laboratory fees
    Medical equipment and supplies
    Chiropractic treatments
    Mental health services
    Physical therapy
    Acupuncture
    Preventive care services (flu shots and eligible vaccines)

    Vision-related expenses:

    Eye exams
    Glasses and contact lenses
    Corrective eye surgery (e.g., LASIK)

    It’s important to note that specific FSA plans may have variations in coverage, so it’s advisable to review your plan’s guidelines and consult with your FSA administrator for a comprehensive list of eligible expenses.

    What are the benefits of FSAs for employees?

    Flexible Spending Accounts (FSAs) offer numerous benefits for employees, including:

    • Pre-tax savings on eligible expenses such as healthcare, dependent care, or transportation costs. 
    • Reduction of taxable income, leading to potential tax savings on income tax. 
    • Convenient management of healthcare expenses, including medical and dental services, prescription drugs, and other eligible items. 
    • Significant savings, particularly for individuals with high medical costs. 
    • Promotion of budgeting and financial planning through the allocation of funds for specific expenses throughout the year. 
    • Flexibility with carryover of unused funds to the next year or utilization during a grace period, minimizing the risk of losing money. 
    • Empowerment of employees to save money, better manage expenses, and improve their financial well-being. 

    What are the benefits of FSAs for employers?

     

    Flexible Spending Accounts (FSAs) offer several benefits for employers.

    Here are some key advantages:

    Cost savings: By offering FSAs, employers can reduce their payroll taxes since employee contributions are made on a pre-tax basis. This can lead to substantial savings for both employers and employees.

    Employee retention and satisfaction: FSAs are a valuable employee benefit that can enhance job satisfaction and increase employee retention rates. They provide a way for employees to save money on eligible expenses and improve their overall financial well-being.

    Competitive advantage: Offering FSAs can give employers a competitive edge in attracting and retaining top talent. Comprehensive benefits packages, including FSAs, are attractive to job seekers and can set employers apart from their competitors.

    Increased productivity: FSAs can contribute to higher employee productivity by alleviating financial stress related to healthcare expenses. When employees have the means to address their medical needs, they are more likely to be focused and engaged at work.

    Tax incentives: Employers can also enjoy certain tax advantages by offering FSAs. They may be eligible for tax deductions related to FSA contributions, which can further reduce their overall tax liability.

    Overall, FSAs can be a valuable tool for employers to provide financial benefits, enhance employee satisfaction, and optimize their tax strategies.

    FSA Contribution Limits

     

    2024 Cost of Living Adjustments Taxable Years Beginning in 2024 Taxable Years Beginning in 2023
    Limit on voluntary employee salary reduction contributions to a health flexible spending arrangement (Section 3.16 of Rev. Proc. 2021-45) $3,200 $3,050
    Maximum carryover amount of unused FSA amounts (Section 3.16 of Rev. Proc.2021-45 $640 $610
    Monthly limit on fringe benefit exclusion for transit and parking (Section 3.17 of Rev. Proc. 2021-45) $315 $300
    Maximum exclusion for qualified adoption expenses furnished pursuant to an adoption assistance program (Section 3.19 of Rev. Proc. 2021-45) $16,810 $15,950
    Maximum reimbursement from a qualified small employer health reimbursement arrangement (QSEHRA) (Section 3.62 of Rev. Proc. 2022-38)  $5,850
    ($12,450 for family coverage)    		 $5,850
    ($11,800 for family coverage)

    Streamline your benefit solutions with The Difference Card!  

    Accessing your FSA funds has never been easier. With The Difference Card, funding and utilizing your FSA dollars is a breeze. Our card integrates your employer’s Difference Card Account funds and your employee FSA dollars into one convenient card! 

    When you swipe The Difference Card at the point of service, it knows exactly which account to draw money from, ensuring a seamless experience. 

    Say goodbye to waiting for reimbursement. At the start of your plan year, your entire annual contribution amount is available immediately to cover eligible healthcare expenses! 

    No more tedious paperwork. With The Difference Card, qualified purchases are automatically deducted from your account balance. No more hassle of submitting paper claim forms and receipts for health expenses. We’re here to simplify your Healthcare FSA experience and eliminate manual paperwork. 

    Take control of your benefits. Choose The Difference Card for a hassle-free, efficient, and paperless solution! 

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