The Medical Spending Premium Conversion Program enables eligible employees to pay for their health plan premium deductions on a pre-tax basis, thereby reducing their gross income for tax purposes.
Currently, health plan deductions for basic and/or optional benefits are deducted from your salary. For tax purposes, payments made on a before-tax basis effectively reduce the salary on which your taxes are computed by the amount of the health plan deduction.
Therefore, Federal and Social Security taxes that must be withheld are reduced. The net effect will be that you receive more money in your paycheck.