Added benefits for your employees. Lower taxes for you.
An FSA allows your employees to set aside money on a pre-tax basis to pay for eligible healthcare, dependent care, commuter and premium expenses.
Employers who offer FSAs may experience a reduction in employer and FICA taxes, and employees who participate reduce their taxable wages. This results in lowered taxes for you with added benefits for your employees.
Healthcare Flexible Spending Accounts can be used to pay for IRS eligible expenses found in IRC § 213(d). Eligible healthcare expenses can include copays, deductibles or coinsurance percentages and out-of-pocket expenses for vision, dental, prescription and medical care.
Employers determine the annual maximum dollar amount employees can elect, up to the annual IRS maximum amount. Employees who want to participate in an FSA must make an annual election by enrolling in the healthcare FSA each year. The annual election is divided by the number of payroll cycles during the plan year to determine a per-pay period amount. This amount is reduced from the employee’s income prior to taxes.
When healthcare expenses occur, employees have the options of:
Claims are processed within 2-3 business days. Participants are issued a check or can opt to have reimbursement deposited into their bank account.
At the end of the plan year, employees will have a run-out period to request reimbursement for healthcare expenses that took place during the plan year. Any funds remaining in the account at the end of the run-out period will be returned to the employer (up to $500 can carry over to the new plan year).
Premium Contribution Plan allows employees to have their premium for a qualified group plan reduced from their income on a pre-tax basis. Qualified group plans include medical, dental and vision premiums, as well as disability, and special cancer or hospital indemnity policies. The premium payments are deducted from the employee’s income and paid directly to the insurance carrier via the employer. This is not a reimbursement account.
If an employee elects to enroll in the Premium Contribution Plan, the premium for qualified benefits will be deducted from their income each pay period. As with your current process, you will then send premiums to the carrier(s) each month. The difference is the employee’s portion is deducted from their income on a pre-tax basis. Since the premiums are sent directly to the carrier(s), funds are not forfeited at the end of the year.
Like an FSA, employers and employees still save money each month because taxes are reduced.
Need to make changes to your account, determine eligibility or make payments? Check our Partner Resources page for additional forms and helpful information.
To receive more information about our services, contact your agent or BenefitHelp Solutions Account Executive by email or phone: 503-412-4210 or 888-387-5440. For specific account information, please contact a Customer Service Representative at: 503-219-3679 or 888-398-8057.