Flexible-benefits Plan (FBP) is an employee benefits plan which helps the employees’ to save considerable amount of taxes by paying certain expenses from their pre-tax income. Some of the eligible expenses from pre-tax income are medical, vision, dental, elder care, and dependent care. All state employees who get a regular paycheck are entitled to participate in the flexible-benefits plan.

Flexible-benefits Plan mainly boasts three components:

- Health Flexible Spending Account (HFSA)

- Dependent Care Reimbursement Account (DCRA)

- Health insurance premium deduction

Flexible-benefits Plan’s reimbursements are made occasionally, mostly once in a week. You will receive statements which helps you to keep updated on your account. Quick information about your account can be accessed with the help of customer service line or email.

Due to the program’s tax exempt features, the federal government strictly regulates the Flexible-benefits Plan. FBPs are regulated by sections 125 and 129 of the Internal Revenue Code (IRS). Hence it is advisable to review the IRS rules before you enroll. If you wish to enroll in the FBP, then it is better from your part to discuss how the program may benefit you with your financial planner or tax advisor.

How does a Flexible-benefits Plan work?

On enrolling in a flexible-benefits plan you first have to decide how much amount you need to earmark for your Dependent Care Reimbursement Account and/or Health Flexible Spending Account. After you have fixed a particular amount for your account, your employer will deduct the amount every month from your salary for the flexible-benefits plan. The deducted amount will be immediately credited to your accounts you have already specified.