Common use of Flexible Spending Accounts (FSA) Clause in Contracts

Flexible Spending Accounts (FSA). Xxxxxxx State University offers IRS qualified flexible spending accounts, which allow employees to set aside funds on a pre-tax basis for certain health care and dependent care expenses. Employees may reduce their salary depending on the program elected and annual IRS limits. Contributions to either the Health Care or Dependent Care account are not subject to federal or state income taxes, or to FICA (Social Security) deductions. By electing to participate in a flexible spending account, employees can save on predictable medical costs. However, it is important to note, any unspent funds remaining in the account at the end of the plan year will be forfeited. Employees will have until March 31st of the following year in which to file for reimbursement of eligible expenses. Employees whose annual salary is less than the Social Security maximum taxable amount will have a slight decrease in the monthly benefit amount paid upon retirement under Social Security. However, participation in either account will not affect other benefit plan deductions such as retirement or the amount of disability income protection you may be eligible to receive under an offered disability plan.