What are Medical Flexible Spending Accounts?
One of the few ways workers can cut out of pocket medical expenses is through medical flexible spending accounts (aka, flex spending account or FSA). A medical flex account is an employer-provided benefit that allows you to contribute a set amount from your paycheck in order to cover out-of-pocket medical, dental, and vision expenses such as health insurance co-pays, uninsured treatments, or even over-the-counter drug purchases. The funds are usually deducted through regular, equal payroll deductions. The good news is that money deposited in a flex account is exempt from federal, state, and payroll taxes. Because taxes are not calculated on your contribution, your paycheck is not reduced by the full amount you set aside. Using this concept of “pre-tax” dollars can reduce your medical costs by as much as 30% depending on your tax bracket. Let’s say you have a $100 per pay period deduction….your actual check may only be $75 smaller because a smaller amount of taxes were withheld. You als
