FSA can Benefit the Employer as well as Employee
The BASE® Flexible Spending Account is a good option that could provide extra funds during the expensive holiday months. The FSA is a BASE® product under the 125 Cafeteria Plan that employers can offer to their employees to help reduce the taxation on out-of-pocket medical expenses not covered under insurance plans. It is an easy way for employees to save tax dollars throughout the year by setting aside money from their paycheck on a pre-tax basis into a special account that can be used to pay for certain out-of-pocket medical expenses.
The FSA can work for many different kinds of employers. However, the ideal candidate is a company that has one or more employees who pay for qualifying non-insured medical expenses such as dental, vision, co-pays, deductibles, prescriptions, and chiropractic. Not to mention, a variety of other qualifying eligible expenses such as band aids, sunscreen, contact lenses, etc.
While this product greatly benefits the employee, it helps employers save money as well. When employees choose to participate in the plan it reduces the employers share of FICA and FUTA taxes on the elected amount. Employees have the opportunity to save tax dollars throughout the year on over 4,000 eligible expenses. The higher the plan utilization, the more the employer saves!
Leah L., an FSA client, realized the benefits the FSA provided to her employees. “We originally decided to implement the BASE® 125 plan for the tax savings it provided, and I would say that is the biggest benefit. Not only do our employees save when funds are transferred from their wages on a pre-tax basis, but our company also sees valuable tax savings. Not everyone is great at saving for a rainy day, but this has helped many of our employees be able to save for medical expenses, both expected and unexpected. This plan is very user friendly for both the employees and employer, and I would definitely recommend taking advantage of the BASE® 125 plan. The BASE® staff is very easy to work with, and is great at helping out in a very timely and efficient manner.”
One proven way to maximize participation is by simplifying the reimbursement process. BASE® offers a variety of ways to reimburse medical expenses including the swipe of a card or the use of a mobile device with photos of receipts. Colleen, another FSA client, mentions the benefits of the FSA for her company and the opportunity for employees to use a debit card. The debit cards make the process seamless and can increase participation. “Aside from the tax savings for both our firm and our employees, one of the biggest benefits is the debit card. It is extremely convenient to swipe the card at the point of service for covered items and services.”
Contact BASE® today to see how your company or clients can start saving today with the BASE® FSA!