Flexible Spending Accounts are a great way to add a little extra bonus to your benefit plans. They allow employees to defer some of their compensation, on a pretax basis, to use for qualified out-of-pocket health care expenses. The tax savings is equal to the taxes they would have paid on income had they chosen not to defer it into their FSA.
One way to utilize FSA funds is to pay deductibles and/or copays out of pocket using these tax-free dollars. FSAs offer a great alternative for employees.