Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Benefits Plan lets the participant set aside a certain amount of their paycheck into an account before paying income taxes. During the year they have access to this account for reimbursement of expenses they regularly pay for, such as health-care and dependent daycare. When a participant uses tax-free dollars to pay for these expenses, they realize an increase in their spending power and substantial tax savings.
Reimbursable expenses can include:
- Co-pays and Prescription Drugs
- Expenses that are medically necessary yet not covered by insurance
- Dental services & Orthodontics
- Contacts Solutions and Eye Surgery
- Weight-loss programs (associated with a specific disease)
- Chiropractic services
- Psychiatric & Psychologist expenses
- Smoking cessation programs.