The Flexible Spending is a section 125 plan classified as a "cafeteria" plan by the IRS.
Insurance benefits: you may purchase the coverage for yourself and your family through the cafeteria plan with pretax dollars.
Spending accounts: you can set aside pretax dollars to reimburse yourself on a pretax basis for payment of certain medical and/or dependent care expenses, not to include insurance premiums.
What is the purpose of this cafeteria plan?
To give you a choice between
How does the plan work?
By completing a Cafeteria Plan Election Form which will be provided to you, you direct your salary reduction to be used to pay for group health insurance premiums or FSA contributions.
Will a cafeteria plan save me money?
Yes, through a reduction in federal, FICA and possibly state taxes.