Flexible Spending Account

A Flexible Spending Account (FSA) is a valuable employee benefit. Under IRS Code 125, employees can set aside pre-tax dollars from their paycheck and be reimbursed with those dollars throughout the year for qualified medical, daycare, and other allowable expenses. Depending on your personal situation, you may want to participate in one or a combination of the available accounts within the FSA. As qualified expenses are incurred, you are reimbursed from the account with your pre-tax dollars. For every dollar set aside from your paycheck to the plan, you save on taxes that are not withheld. By reducing your income taxes, you increase your take-home pay.

Employees have the option to elect a healthcare FSA and/or a dependent care FSA administered by Southern Bank.

Healthcare Flexible Spending Account
Healthcare expenses that are not covered by insurance can be reimbursed through a healthcare FSA. Examples of qualified expenses include copays, deductibles, prescriptions, eye glasses or contacts, dental services, and more.

Annual Contribution Limit for 2026: $3,400

“Use-It-or-Lose-It” Rule: Remember to fund based on your needs. At the end of the plan year, any unused funds will be forfeited, with the exception of $680.

Dependent Care Flexible Spending Account 
Dependent care can be costly. Using the Dependent Care FSA, you can pay for qualified care costs for a child or adult . You pay for the expense when incurred, and then submit a reimbursement claim form or file a claim online for reimbursement. Remember that both spouses or custodial parents must be employed and dependent must be:
• A child under age 13 or;
• A child, spouse or other dependent who is physically or mentally incapable of self-care and spends at least 8 hours in your household.

Annual Contribution Limit for 2026: $7,500