Understanding Flexible Spending Accounts

For many employers, the fall season brings open enrollment — that once-a-year opportunity for workers to change their benefit packages. But the vast majority of workers stick with the status quo: A recent MetLife survey of 1,000 people finds 77 percent of employees plan to maintain current work benefits, while 10 percent plan to increase them and 11 percent will cut back.

Many workers don’t make changes because they don’t recognize the upside of some benefit programs. A 2008 survey of human resources managers found only 21 percent believe their employees have a good understanding of the company’s benefits. One issue is that workers may get little guidance: 40 percent of the firms in the survey require workers to self-enroll to receive benefits.

In a nutshell, an FSA allows workers to have money deducted from their paychecks pre-tax to pay for out-of-pocket health care expenses as well as the costs of dependent and child care (including summer camp for children under 13 when both parents are working). Read the Full article from Money Happiness Blog