Your FSA will provide the following benefits:

Ease. Enrollment involves filling out a simple form (supplied in this booklet). Reliable payroll deductions make it easy to budget and save regularly. Convenience. Telephone and fax services make it simple to get information and file claims. Savings. FSAs lower the cost of health and dependent care by decreasing your taxes. As a result, you take more money home in your paycheck.

What Is an FSA?
Because expenditures on personal health and dependent care are considered a necessity, and to encourage proper medical attention, the federal government has enacted policies to reduce taxes on certain types of expenses. As a result, section 125 of the Internal Revenue tax code was established to allow changes in the way certain types of expenditures are taxed, and the flexible spending account is one of the ways used to reduce your taxes.

Who Would Want an FSA?
Anyone who has regular or predictable out-of-pocket expenses for any of the following kinds of expenditures should consider opening an FSA:

medical costs that are not reimbursed, such as medical deductibles and co-pays child and dependent care costs other qualified expenses

You will find a detailed list of the type of covered expenses on the back of the reimbursement claim forms.

What Expenses Are OK?
Your FSA may be used to reimburse medical, dental, and vision care expenses, or dependent care expenses defined by the Internal Revenue Code. The costs may be for you, your spouse, or your eligible dependents (children, siblings, parents and others for whom an exemption may be claimed). See the back of the reimbursement claim forms for a sample list of what is allowed and not allowed. For the most complete details, contact your local Internal Revenue Service office and ask for publications 502 and 503, or check the IRS Web site at www.irs.gov.

Why Would You Want an FSA?
A flexible spending account provides these benefits:

Lower Costs for Care. The money deducted and later used to pay for health or dependent care, is not taxed. In effect you are paying less for the care. Budgeting. Regular payroll deductions help smooth out the bumps in your expenditures. More Take-Home Pay. An FSA deduction comes out of your paycheck before taxes are computed. For tax purposes, your pay has been reduced, which means less income taxes. With less taxes subtracted, you have more take-home pay.

See some examples of how an FSA cuts taxes and increases take-home pay.