Group Flexible Spending Accounts Employee Benefits

Tuesday, February 6, 2024 21:19 Posted by Admin
Flexible Savings Accounts

Flexible Spending Accounts: Save Money And Keep Employees Safe

Taylor Benefits Insurance can help businesses big and small establish flexible spending accounts, or FSAs, for their employees. These types of accounts make the process of health reimbursement a lot easier, and the deposits needed to be made into these accounts are made exclusively with pre-tax dollars. This results in lower taxable income, as well as lower takes.

Companies that use our services are already enjoying the perks of a well-established Flexible Savings Account. Get in touch with us now to set up yours or find out about other services we offer here.

How Do FSAs Work?

Flexible Spending Accounts are a type of employee benefits designed to save money through pre-tax savings on health care expenses. Offering these FSAs can be an extremely valuable incentive for businesses to attract top candidates for jobs, as well as increase employee retention.

Once a business or company establish an FSA, employees can start putting money directly from their salaries into a special account. These contributions are limited to $2,750 per year per employee and are not subject to any federal or state tax.

As a result, the employee’s overall tax is reduced, and they can increase their spendable income. These accounts are used to help cover healthcare expenses that lie outside of employee healthcare plans, including deductibles, copayments, medical equipment, or medications.

Employees must choose a specific amount that will go to the FSA, and generally speaking, this amount cannot be changed later on. As a result, it’s important for employees to think carefully about how much they want to transfer into this account, and estimate any expenses they may have.

But we can help with that. With Taylor Benefits Insurance, you and your employees get the best support regarding FSAs to make sure they truly bring an added bonus to your institution.

Get in touch with us now for more details!

What Are the Eligible Expenses?

Any deductible medical expenses that cannot be reimbursed through health insurance can be reimbursed through a Flexible Savings Account. Some examples include:

  • Fees for prescription glasses or contact lenses;
  • Fees for hospital services;
  • Long-term care services;
  • Accident care, such a hospitalization, immediate care;
  • Acupuncture treatments;
  • Inpatient treatment for alcohol or drug addiction;
  • Nicotine addiction programs;
  • Non-elective cosmetic surgery;
  • Co-payments for covered expenses;
  • Fees for dentists, surgeons, psychiatrists, chiropractors or therapists;
  • Hearing aids, crutches, or other special equipment;
  • Braces;
  • Prescription drugs.

Some costs, however, are explicitly excluded:

  • Dental whitening;
  • Cosmetic surgery and procedures (elective);
  • Expenses outside the coverage period;
  • Expenses covered through another health plan;
  • Family counseling;
  • Supplements, vitamins, herbs, or other alternative medicines that can be sold over-the-counter or do not have to be prescribed;
  • Insurance premium;
  • Other items for personal use, such as cosmetics or personal hygiene products.

Our Taylor Benefits Insurance consultants know all about what’s eligible or not on an FSA, so you don’t have to.

The Benefits of an FSA Apply Both for Employees and Employers

Employees, on the one hand, see an almost immediate benefit through a smaller tax burden, as the amount they choose to put into the FSA is not taxable. This way, their spending income increases, and they benefit from having stronger health care protections.

But employers also benefit from certain advantages as well. They get lowered payroll and FICA (Federal Insurance Contributions) taxes. Plus, it’s also possible to write off the administrative costs of these plans, and include them into a better employee benefits package.

However, it’s important for employers to keep in mind that when they set up an FSA, they are signing on to a responsibility to reimburse the full amount needed, regardless of what’s in the account.

For instance, if the employer must cover a $100 medical bill, but the account only has $50 in it, the reimbursement will be made for $100. This is a critical aspect employers should carefully take into consideration when setting up these accounts.

If you need to find out more about FSAs and if they’re a good option for your company, we can help. Contact Taylor Benefits Insurance now!

FSA vs. HSA: What’s the Difference?

An HSA, Health Savings Account, is another type of health care savings account companies may offer their employees. With this type of account, employees also save money for future health care expenses. Contributions to HSAs are tax-deductible and become tax-deferred allowing employees to withdraw them for qualified medical expenses tax-free.

However, there are some key differences between an FSA and an HSA. HSAs have a higher annual contribution limit and allow employers to match contributions. Additionally, HSA benefits roll over on a yearly basis, making them the better choice if the employee does not need to cover any medical expenses in the near future.

For recurring health care costs, an FSA is a lot more beneficial.

Not sure if an FSA or an HSA is a better option for your company? Taylor Benefits Insurance can help you figure that out!

Setting up the Accounts – Why You Need a Pro

When it comes to setting up a Flexible Savings Account, it’s a lot better to hire a professional who takes care of the process from A to Z. There is a considerable amount of paperwork involved in setting up these accounts, not to mention the need to navigate appropriate legislation to make sure everything is in order.

In fact, you may be better off to bring in a third-party administrator to handle FSAs in general. To set up your own accounts, you have to gain access to protected health information. Then, you will also come into contact with sensitive medical information whenever a request for reimbursement is submitted.

This position can be somewhat problematic, as the person making reimbursement decisions is usually a person from the HR department. As a result, knowing an employee’s medical information could potentially affect other decisions that involve the employee.

Other reasons why you should call in the pros include:

  • A deeper understanding of these benefits plans;
  • Ability to keep them in line with HIPAA requirements;
  • Establishing the eligibility of reimbursements, as well as a fixed process for appropriate denials;
  • Improved record keeping of employee data;
  • Saving time with administrative needs involved with FSAs.

Once the FSA has been set up, companies also need to set up a process to track contributions, check eligibility of the expenses, as well as reimburse employees. This essentially translates into more time needed for these accounts alone.

When it comes to improving efficiency in a company, hiring a third party to take care of FSA is really the only way to go.

And Taylor Benefits Insurance is here to help. Reach out to us now to find out more.

Why You Should Work with Us

Taylor Benefits Insurance has been in the business since 1987, and we have the perfect combination of experience and dedication needed to make sure your employee benefits plans include an FSA.

Our consultants can ensure your FSAs comply with all relevant laws, and we will lend a hand in tracking contributions and reimbursements, so you don’t have to worry about expanding your human resources for this process alone.

Additionally, the cost of administering the FSA is deductible as a business expense, so by working with Taylor Benefits Insurance you effectively save time and money, while also offering your employees an extra perk to their benefits package.

With Taylor Benefits Insurance, you’ll get:

  • An experienced team of consultants that don’t shy away from a challenge;
  • Plan administration for all your benefits plans throughout the year;
  • A complimentary use of an integrated online HR management system, to streamline your HR processes even more;
  • Constant updates on compliance issues and health care reforms.

At Taylor Benefits Insurance, we treat all our clients like they’re family. This is why our consultants always go the extra mile to ensure you get the best solutions to all your employee insurance needs.

Still on the fence? Contact Taylor Benefits Insurance Now!

Don’t know if an FSA is worth your time? Have other questions about employee insurance or benefits plans? We get it. It’s a lot of information to take in all at once, and we honestly don’t blame you if you still have some things left to clarify.

And we don’t want you to rush into any decisions until you’re sure. It’s why we always take the time to discuss with our potential clients at-length and answer all their questions so that, in the end, you can make an informed decision.

Taylor Benefits Insurance is the team you want on your side. Get in touch with us today and let’s see how we can help.

Written by Todd Taylor

Todd Taylor

Todd Taylor oversees most of the marketing and client administration for the agency with help of an incredible team. Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., he provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.

We’re ready to help! Call today: 800-903-6066