What is a Flexible Spending Account?

Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Spending Account (FSA) lets employees set aside a certain amount of each paycheck into an account — before paying income taxes.

During the year, participants have access to this account for reimbursement of expenses — not covered by insurance.

When employees use tax-free dollars to pay for these expenses, they realize an increase in their spending power, and substantial tax savings.

Employers benefit because they don’t pay FICA taxes on dollars flexed. The company saves about 8% (FICA match) on every dollar employees contribute to the plan. Plus Kabel Business Services offers a guarantee that their administrative fees will never exceed a company’s FICA savings.

While many Cafeteria/Flex plans begin January 1, they can start at any time. Now’s the time to review your employee benefits and see how this can enhance them. If an employee flexes $100 a month, the average tax savings is $360 a year. That’s like giving an employee a nearly 20-cents an hour raise without costing the employer a penny!

Visit Kabel Business Services website today to start saving money.