Section 125 Cafeteria Plan
What is a Flexible Spending Account?
Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Spending Account (FSA) lets employees set aside a certain amount of each paycheck into an account — before paying income taxes.
During the year, participants have access to this account for reimbursement of expenses — not covered by insurance — that they regularly pay for, such as:
- Deductibles, co-pays, and other eligible expenses not covered by insurance.
- Prescription drugs and medical supplies.
- Over-the-counter drugs that are medically necessary like allergy medications, aspirin or antacids.
- Dietary supplements and vitamins with doctor's letter of medical necessity.
- Dental services, orthodontics and dentures.
- Eyeglasses, contacts, solutions and eye surgery.
- Weight-loss programs (associated with a specific disease).
- Weight-loss over-the-counter drugs with doctor's letter of medical necessity.
- Chiropractic services.
- Vitamins with doctor's letter of medical necessity.
- Psychiatric care and psychologist's fees.
- Smoking-cessation programs.
- Adult and child day care services.
- Adoption expenses.