Enhance your employee benefits package with a flexible spending account.
Help employees avoid financial issues when seeking health care.
While typical health insurance can be very effective for many of your employees, out-of-pocket medical expenses such as deductibles, copays, and dental charges can still present serious financial challenges. In turn, that increases the risk of employees not seeking necessary treatment. This may lead to the potential worsening of health problems, which could leave some employees unable to work.
Money is put aside for the costs of health care 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 medical expenses. This isn’t a typical investment, as the money doesn’t grow, but it can be an effective way of managing money for a specific purpose.
What expenses can be paid for by a FSA?
Out-of-pocket medical expenses such as deductibles, copays, prescription drugs, and medical devices.
Can employees use FSA funds for their family?
Employees may use their flexible spending account funds to help pay for the health care costs for themselves, their spouse, their children, and their dependents.
Flexible spending accounts are not taxable.
The other big advantage is that money put into the flexible spending account isn’t taxable. This results in a reduction in the payroll taxes paid both by the employing business and the employees. Employees choose how much money to add to their FSA up to a limit set by the employer, and this money is not taxed.
When are contributions made available to employees?
It’s important to note that any contribution from the employer is payable as a lump sum at the start of the year, and will be available to the employees even if the employee leaves the job. The employee pays their contributions to the flexible spending account (FSA) over the year in regular installments.
Do you think a flexible spending account (FSA) might help your employees cover out-of-pocket medical expenses? If so, contact us to get started.