Flexible Spending Accounts

The following information is posted on the FLC website for employees.

Flexible Spending Accounts

Employees have the option of establishing a Flexible Spending Account for out-of-pocket expenses for qualifying health care or dependent care.  To take advantage of this pre-tax benefit, employees establish an amount that will be deducted from each monthly paycheck.  

Throughout the plan year, employees submit receipts for qualifying health care and/or dependent care to the administrator of the plan for reimbursement.

This is a “use it or lose it” account.  If a balance remains in the account at the end of the plan year and cannot be reimbursed to the employee, the balance is forfeited.  

If employees take advantage of this tax break, they are not allowed to claim the expenses when filing that year’s income tax returns

Based on this information, answer the following quiz.