The City offers its employees a Flexible Spending Accounts (FSA) Program, which is allowable under Internal Revenue Code (IRC) Section 125. The Program allows City employees to deposit a portion of their pre-tax income into accounts maintained for certain health and dependent care expenses. Amounts deferred into the FSA are excluded from employee taxable income, thereby saving the employee tax dollars. Additionally, the City does not pay FICA tax (7.65% of taxable wages) on the money deferred, resulting in City savings as well.
The Human Resources Department (HR) administered annual enrollment for the FSA Program during the month of March. Steps included communication and advisement to employees, processing approximately 500 election forms, data entry for 170 participants for payroll purposes, and auditing to confirm accuracy.