Product Choices: Flexible Spending Accounts
When designing your employee benefits plan, you may wish to include a flex plan. Such a plan is one of the most popular benefit plans for both employers and employees. Hanratty & Associates consultants can help you design a flex plan which offers your employees a range of choices.
Flex plans can sometimes be called Section 125 plans because the plan complies with Section 125 of the IRS Code. A dependent care reimbursement account is a common type of account within a flex plan.
Whatever you like to call it, a flex plan allows employees to make pretax payroll deductions to pay for health and dependent care expenses. Flexible spending accounts cannot be carried over from year-to-year and any funds still in the account at the end of the year are forfeited—which requires employees to be careful in estimating how much to set aside for the year.
It’s up to you to determine what benefits are included in your flex plan. In addition to dependent care expenses, flexible spending accounts may be set up for the employee’s portion of group insurance premiums (health coverage, dental, disability, or term life insurance), and un-reimbursed medical expenses incurred by the employee.
Flexible spending accounts are attractive to employees and can help you attract and retain your personnel. From the employer perspective, flex plans can result in savings to your bottom line. Contributions, when not included in the employee’s income, are not subject to social security or Federal unemployment taxes.
Hanratty & Associates consultants are available to help you setup and administer your flex plan. In fact, H&A Administrators can assist with all administration of your flexible spending accounts.
Contact us to learn more about flex plans!