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Health & Welfare: Flexible Compensation

State Farm offers you the opportunity to save tax dollars by paying for your eligible Group Plan contributions, health care and dependent care expenses with Flexible Compensation dollars. These dollars come out of your salary before federal income tax, Social Security taxes and, in most cases, state and local income taxes are withheld.

General Information

Employee contributions or premiums for the following plans will only be deducted on a before-tax basis:

  • Group Medical Preferred Provider Organization (PPO) Plan
  • Health Maintenance Organization (HMO) Plan
  • Dental Plan
  • Vision Plan
  • Employee Group Life
  • Voluntary Accidental Death and Dismemberment (AD&D)

State Farm does not allow use of before-tax dollars to pay for Long-Term Disability, Spouse Life Insurance or Child Life Insurance.

Enrollment Details

Enrollment must be done within 31 days of your hire date or during the next Annual Enrollment period.

Enroll in Flexible Compensation carefully. Elections cannot be changed or revoked during the year unless you satisfy the Qualifying Events Rules and applicable Consistency Rules described in the Flexible Compensation Plan. These rules are extremely specific, so be sure to consult the Human Resources Policy Manual for U.S. employees for more details.

Any amount you allocate to a Health Care Flexible Spending Account (HCFSA) or a Dependent Care Flexible Spending Account (DCFSA) which you do not receive back through the claim reimbursement process will be forfeited. To be eligible for HCFSA and DCFSA reimbursements, the applicable services must be received while you are a participant in the plan, regardless of when you are billed or pay for services. Participation generally begins with the effective date of your enrollment and ends each December 31.

Please be sure to review the HCFSA and DCFSA sections for additional information.

State Farm encourages you to review your benefit options carefully and make informed decisions.


This brief overview of the State Farm Flexible Compensation Plan is not intended to be a complete explanation of plan features. For more detailed information, please refer to the online Human Resources Policy Manual for U.S. employees.