Tools that help your employees manage their benefits.
Flexible spending accounts built to benefit your team.
Healthcare can get expensive. We can enhance your employee benefits package with a flexible spending account that helps your employees save money on everyday healthcare expenses.
Helps employees avoid financial issues when seeking healthcare.
While typical healthcare insurance can be very effective for many of your business’ employees, out-of-pocket healthcare expenses, such as deductibles and co-payments or dental charges, can still present serious financial challenges. In turn, that increases the risk of employees not seeking necessary treatment. This could lead to the potential worsening of health problems, which could leave some employees unable to work.
Money is put aside for the costs of healthcare only.
A flexible spending account (otherwise known as an FSA) is a way for employees (and employers if they choose) to put money aside specifically to pay for these out-of-pocket healthcare expenses. This isn’t a typical investment, as the money doesn’t grow, but it is an effective way of managing money for a specific purpose.
Flexible spending accounts are not taxable, reducing payroll taxes.
The other big advantage is that money put into the flexible spending account (FSA) isn’t taxable. This results in a reduction in the payroll taxes paid both by the employing business and the employees.
When are contributions made available to employees?
It’s important to note that the employee’s election amount and the employer contribution are readily available for use on the first day of the benefits year. The employee pays their contributions to the flexible spending account (FSA) throughout the year in equal installments. If the employee terminates employment mid-year and has used more funds than they have contributed, they are not required to pay those funds back to the employer. In the same way, if the employee terminates employment mid-year and has not used the funds in their FSA, those funds are returned to the employer.
Maximum contribution amounts.
The 2020 limit applies on a per plan basis regardless of single versus family, so the maximum is $2,750 per FSA plan. If spouses both work for companies that offer an FSA, they could each enroll in their employer’s FSA and contribute the maximum amount. The maximum is for pre-tax employee contributions only. Employers could choose to contribute in excess of the $2,750 if they choose.
Do you think a flexible spending account (FSA) might help your employees cover out-of-pocket healthcare expenses? If so, contact our employee benefits team to get started.
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