TexFlex (our Flexible Spending Account) lets you pay for eligible health and dependent care expenses tax-free. TexFlex has two ways of doing this: the Health Care Reimbursement Account (HCRA) and the Dependent Care Reimbursement Account (DCRA). Your ultimate savings depend upon your tax bracket.
TexFlex reimbursement accounts are tax-favored programs regulated by Section 125 of the Internal Revenue Code. They allow you, with the help of your employer, to set up your own account with money that is deducted automatically from your paycheck before federal income and Social Security taxes are calculated. You are then reimbursed after you have incurred eligible health and dependent care expenses.
The HCRA allows you to pay yourself back for eligible health care expenses (like eyeglasses and certain unreimbursed medical and dental expenses) for you and your eligible dependents. The DCRA allows you to pay yourself back for eligible dependent care expenses like your child's day care or after-school care.