Flexible Spending Accounts
The City of Lewiston sponsors a 125K Plan (IRS), also known as a flex or cafeteria plan, which allows employees to use pre-tax dollars to fund medical, dental, and vision expenses. Flexible Spending Account (FSA) benefits are administered by HealthEquity.
This is an election that employees designate annually and is a voluntary benefit. All regular full-time employees are eligible. Employees will save on Federal, State, and Medicare taxes paid on their pre-tax payroll deduction contributions and/or health care premiums. The maximum annual contributions allowed is $2,750.
How it Works
The Cafeteria 125 Plan allows for medical, dental, prescription and some over-the-counter expenses to be "deductible" beginning with the first dollar.
Generally, in order to meet the IRS requirements to deduct medical expenses, a person has to itemize, and they must have at least 7.5% of their adjusted gross in medical expenses. Then, they get to deduct medical expenses over and above that 7.5% figure.
Employees who elect to participate in the Cafeteria Plan can pay for these same expenses pre-tax and so they are getting a full deduction for the first dollar spent. You can find additional information and a list of eligible expenses on Health Equity's website.
Important - If your spouse participates in a Health Savings Account (HSA) - they may not participate in your flex plan.
Dependent Care Account (DCA)
Within the City’s cafeteria plan employees are also able to participate in Dependent Care, electing to have pre-tax dollars collected for use of dependent care expenses for children age 12 and under and/or disabled dependent care. Again this is elected annually during open enrollment for the calendar year. All regular, full-time employees are able to participate. The maximum allowed contribution is $5,000 for filing Married or $2,500 if filing single.