Employee Security, Inc. ESI Flexible Benefits


Flexible Spending Accounts

Flexible Spending Accounts (FSA's) allow employees to set aside pre-tax money to pay for medical expenses not covered by insurance (e.g., deductibles, co-payments, non-covered services) OR for the care of dependents.

These are separate accounts. Employees elect at the beginning of the plan year how much pre-tax money they want placed in these accounts to cover expenses incurred during the plan year. For more information, click on the following links:

Medical Reimbursement FSA Dependent Care FSA

WHAT ARE THE RISKS?

Some employees risk a possible reduction in Social Security benefits. In addition, once you have estimated your annual expenses for day care and out-of-pocket medical expenses, you cannot change or stop your deductions until the end of the current plan year. Exceptions are made only if there is a family change that affects your benefits, such as marriage, divorce, death of an immediate family member, birth or adoption of a child or loss of your spouse's job.

USE IT OR LOSE IT!

The other risk involves what are termed "use it or lose it" rules for your out-of-pocket medical expenses and your day care expenses. If you estimate your expenses too high and do not spend the money in each account during the plan year, it cannot be refunded back to you. Also, money set aside for day care expenses cannot be used for medical expenses, and vice versa. Therefore, you should be conservative in estimating your annual expenses.