Offering a Flexible Spending Account can be a vital component of any company’s business plan. And, recent changes to the FSA rules make offering one an even better option now for employers and employees!
First off, there are three key benefits to employers:
1. Significant savings on FICA taxes.
2. Offering a more comprehensive and competitive employee benefits program.
3. Hassle free administration
And… the employees win the most by allowing them to use pre-tax money for eligible health care expenses. Imagine your employees saving an average of 30% on medical expenses as a result of a plan that SAVES the COMPANY MONEY TOO!
What was the Recent Change?
The era of the “Use It or Lose It” rule has ended! Employers may now allow employees to carry over up to $500 of Healthcare FSA balances remaining at the end of a plan year.
What Does the Use It or Lose It Rule Change Mean?
For employers
More flexibility
You now have the flexibility to allow employees to carry over up to $500 of their unused FSA account balance remaining at the end of a plan year, or offer grace period to spend those funds.
More participation
The rule change removes the most commonly cited reason for why employees choose not to sign up for an FSA – the risk of losing money left unspent in an FSA at the end of a plan year. With less risk, you may experience higher employee participation rates, resulting in greater corporate tax savings and a healthier and happier workforce!
More savings
With more participation in your FSA program, you are poised for greater payroll tax savings. This rule change also benefits employees by providing them the opportunity to set more money aside in a healthcare FSA with less risk of losing any of their money. It’s a win-win for employers and employees. Locally owned and operated, FlexPlan Administrators would love to help!
For employees
Less risk
With the new rule, up to $500 of your unused healthcare FSA balance can be carried over into the next plan year instead of you “losing it” – making enrollment in an FSA much less risky. This gives you more flexibility to spend your FSA money when you need it. You can use it for necessary out-of-pocket healthcare expenses, rather than feeling pressured to engage in last minute and potentially unnecessary spending at the end of the year or grace period.
Less worry
Quit worrying about having to precisely predict your out-of-pocket medical expenses a whole year in advance. The new carryover feature assures that any unused balance of up to $500 will still be there for you in the next plan year. If you have never had an FSA, you can now experience the benefits of this great pre-tax benefit without risking the loss of any of your hard earned money. Simply start by selecting an annual amount of $500 and know that even if you don’t use any of it during this plan year, it will be there for you the following plan year. Taking advantage of valuable tax saving just got so much easier.
More control
With the rising cost of healthcare, your employer offers you a great way to save on out-of-pocket expenses with your FSA. By using pre-tax dollars, you will save an average of 30% when you pay for office visits, prescription drugs, contact lenses, and more with your FSA dollars. With the new carryover feature, you don’t have to worry about losing unused funds (up to $500), so get started and save! Ask your employer about the healthcare FSA and the carryover feature.
For more information on how FlexPlan Administrators can help, contact Greg Holley at 918-524-6321 or visit www.flexplanadmin.com.
