FSA is comprised of two assistance plans - the Medical Care Assistance Plan (MCAP) and the Dependent Care Assistance Plan (DCAP). Through these plans, you can pay for out-of-pocket medical expenses and/or work-related dependent care expenses during the plan year with tax-free dollars.
Taking advantage of this program provides tax benefits for you and allows for greater disposable income.
Once an enrollment form is received and processed by CMS, you will receive an FSA welcome packet. The packet contains enrollment verification, personalized claims forms, and important participation information. Packets should be reviewed carefully.
1. You designate an amount of money to be deducted from your paycheck
2. That money is deposited into your personal MCAP and/or DCAP account before any taxes are withheld.
3. The amount deducted from your paycheck is not reported on your W-2 as taxable income.