Introduction to Plans

Flexible Spending Accounts (“Flex” Plan)

The COBRA Act of 1986 allowed for two additional pre-tax accounts for allowed under IRC Section 125 for Healthcare Expenses (a pre-cursor to “Medical Spending Accounts”) and Section 129 for Child/Dependent Care in addition to the POP Plan (see above). Thus three separate accounts can be established to allow for pre-tax dollars (lowering Federal, State, Local, FICA and Medicare taxes) for:

• Healthcare Premiums for employees’ contributions made via payroll deduction to their employer towards the group health and dental insurance plans (see also POP Plans).
  
  
• Unreimbursed Healthcare Expenses for out-of-pocket expenses allowed by the IRS and not reimbursed by insurance or any other plan. For example: dental care (checkups, office visits and orthodontia), vision care (checkups, contacts, eyeglasses, and sunglasses), prescription and over-the-counter drugs (cold medicines, aspirins, analgesics, pain remedies, birth control, smoke cessation, feminine hygiene, and much more), health clubs (when prescribed), healthcare services not covered or limited by the insurance coverage (chiropractors, mental health, alternative medicine), as well as the plan deductibles or co-payments or amounts which exceed reasonable and customary.
  
  
• Child or Dependent Day Care up to $5,000 per year to provide day care to a child under age 13 (any age if disabled) to allow couples to work (or attend school full-time); including pre-school until 1st grade, summer day camp, after school programs, baby-sitters (and other allowed in-home services for which you have the social security number or federal tax ID.