BASE^® Blog

For so many, the cost of putting children in daycare, nursery school, or care for an aging parent can be a significant expense.  But employers can help by providing the BASE® Dependent Care Assistance Plan (DCAP) to help employees pay for their eligible child and dependent care expenses.  Employers offering this type of benefit are allowing employees to be reimbursed with tax-free dollars for eligible dependent care expenses so that the employee and his or her spouse may work.

The BASE® DCAP allows employees to use tax-free dollars to pay for their employment-related dependent care expenses.  No matter the dependent care service, children, disabled spouse, or legal dependents, the BASE® DCAP provides additional financial assistance to take care of dependents (children, disabled spouse, or legal dependents), tax-free. 

What are eligible expenses? 

In general, expenses that are in connection to keeping the participants gainfully employed, such as…

• Before and after school programs
• Daycare
• Adult and elderly care programs

What are ineligible expenses? 

In general, expenses that have nothing to do staying gainfully employed, such as...

• Schooling for a child in kindergarten and above
• Babysitter when the participants want to go to out for dinner and to the movies on a Friday night
• Payment for care when the participant is not legally responsible for the child or adult requiring care

Even though the BASE® DCAP is considered an employer-provided plan, the pre-tax contribution from the employees not only reduces the employee’s payroll taxes, it also reduces the employer’s share of payroll taxes resulting in a financial benefit for the employer too.  The employees can continue to work, establish funds, and pay for their dependent care costs.  With the funds being transferred on a pre-tax basis, employees save on federal, state, Social Security, and Medicare taxes, thus the employees will also see an increase in their take-home pay. 

The BASE® DCAP helps the employer enhance their benefits package by helping make dependent care more affordable for their employees.  The addition of this benefit can help recruitment and retention of employees.  Click here to watch a short video and learn more about the BASE® DCAP or call 888.386.9680.

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With BASE®, businesses have multiple options to choose from in helping save valuable tax dollars with the help of Health Reimbursement Arrangements. A Health Reimbursement Arrangement (HRA) is a tool for business owners to increase their tax savings and to offer tax-free health benefits. An HRA may reimburse for qualified medical expenses such as co-pays, deductibles, and health insurance premiums.

What are the options?

BASE® Section 105 HRA – Available to small business owners to deduct up-to 100% of health care costs, including individual insurance premiums and qualified out-of-pocket medical expenses as a business deduction. The typical BASE® HRA client saves an average of over $5,000 in tax savings.

ADVANTAGE: Businesses will reduce the financial impact of health care expenses and pay for eligible out-of-pocket health care expenses with tax-free reimbursements to the employee.

BASE® QSE HRA – Available to business owners with less than 50 full-time employees and no traditional group health plan, giving them the option to offer their employees a better benefits package. With the QSE HRA, employees have the ability to secure their own medical insurance and use the funds to pay for insurance premiums, co-pays, deductibles, eye care, dental care, or other qualified health care expenses.

ADVANTAGE: Businesses will attract and retain talented employees with an increased benefits package, with employees having additional money to help with the rise in cost of health care.

BASE® Integrated HRA – Available for employers with a group health plan in place looking to reduce the overall cost of insurance coverage. The Integrated HRA gives employers the flexibility to help their employees pay for medical expenses not covered by health insurance.

ADVANTAGE: Businesses have more control of the overall cost of their benefit plans, and employees do not contribute funds to the HRA.

Plus, two NEW HRAs for 2020…

BASE® ICHRA – Available to businesses of all sizes that are looking for different options outside of standard group health insurance. The ICHRA will integrate with individual health insurance to provide business owners with a great alternative in providing health benefits. This plan helps to streamline benefit options and cut costs without reducing value when it comes to employee health benefits.

ADVANTAGE: Businesses will save money by not having to provide a traditional health care plan to any or all employees, and employees now have additional money to help with the continuous rise in health care and are able to pick the insurance coverage that is right for them.

BASE® EBHRA – Available to employers that offer a traditional group health plan to provide an additional $1,800 pre-tax to reimburse employees for dental and vision, COBRA, and short-term insurance premiums.

ADVANTAGE: Employers have the ability to expand their benefits package, and employees have an additional $1,800 pre-tax to put towards their medical expenses. Health Reimbursement Arrangements offer a variety of plan design options to meet the needs of business owners of varying sizes.

Call BASE® at 1-888-386-9680 for a consultation regarding HRAs or visit BASEonline.com to learn more.

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