Is an FSA a 125 plan?

A Flexible Spending Account (FSA), sometimes referred to as a ‘Cafeteria Plan’ or ‘Section 125 Cafeteria Plan’, helps you keep more of your paycheck by reducing your Federal and state taxes. It allows you to pay certain expenses before taxes are deducted from your paycheck.

What is included in Section 125 deductions?

A Section 125 plan typically lets employees use pretax money to pay for health insurance premiums (medical, dental, vision). Other options include retirement deposits, supplemental life or disability insurance, Health Savings Accounts, and various medical or dependent care expenses.

What expenses are FSA eligible?

Eligible expenses include health plan co-payments, dental work and orthodontia, eyeglasses and contact lenses, and prescriptions. This type of FSA is offered by most employers. It covers medical, dental, vision, and pharmacy expenses. If you have a Standard FSA, you are ineligible for contributing to an HSA.

Can you use an FSA or HSA to pay for your insurance premiums?

In most cases, the pre-tax dollars in a flexible spending account (FSA) or health savings account (HSA) cannot be used to pay for health insurance premiums. With an FSA, health insurance premiums are considered a non-medical expense and are not allowed.

Does section 125 include 401k?

A 401(k) cafeteria plan allows employees who are participating in their employer’s 401(k) plan to also choose additional types of benefits from a smorgasbord of options on a pretax basis. These plans are sometimes referred to as Section 125 Plan (from the applicable IRS code) or a flexible benefits plan.

What are qualifying dependent expenses?

Qualifying expenses also include: Childcare provided by a babysitter or licensed dependent care center. The cost of a cook, housekeeper, maid, or cleaning person who provides care for the child or dependent. Costs related to before- and after-school care for children under 13.