Plan established by the employer that permits the employee to defer pretax earnings into a specifically designated account. From this account, the employee may withdraw funds to pay unreimbursed medical expenses and/or qualified child-care expenses. Generally, there is a cap set by the employer that limits the maximum amount the employee can pay into this account. In addition, there is a $5000 limit set by the federal government for the child-care expenses account. Any unused funds remaining in this account at year's end are forfeited by the employee.
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