Some companies give employees the option to pay for qualifying health expenses on a pre-tax basis. These types of offerings are called cafeteria plans. Covered under Section 125 of the Internal Revenue Code, spouses and dependents are all eligible for benefits under cafeteria plans.
Types of Cafeteria Plans
- Flexible Savings Account (FSA): An FSA is a special account that employees can enroll in through their employers in order to contribute pre-tax earnings to assist in paying for certain medical and dental costs.
- Health Savings Account (HSA): Similar to an FSA, an HSA requires that you have a high-deductible health plan (HDHP).
What expenses are eligible?
- Dental: Procedures such as orthodontia, crowns and dentures are eligible for most cafeteria plans. Established costs and fees, such as coinsurance, copays and deductibles, may be paid using your FSA or HSA. The cost of these fees will vary depending on the coverage specifics of your plan.
- Medical: Prescription drugs, ambulance services, therapy and lab tests are just a handful of the many eligible expenses.
Remember, cafeteria plans are not insurance. They are support systems that can help you pay for health care costs, including dental and vision. To learn more about FSAs and HSAs, visit healthcare.gov or talk to your HR contact within your company.