TPA -- Flexible Spending Plans -- Main

What is a Flexible Spending Account, and how does it work?
A Flexible Spending Account (FSA), also commonly referred to as a Section 125 or Cafeteria Plan, allows participating employees to direct a portion of their pre-tax salary to an account maintained by the employer. Money in the account can be used to pay employees for health insurance premiums, or reimburse them for adult and child care expenses and certain out-of-pocket medical expenses not covered by insurance.

How does an FSA benefit employees?
Contributions made to an FSA are not subject to federal and state income taxes, or FICA (Social Security and Medicare) taxes. On average, an employee will save an estimated 20% in taxation.

Do employers also benefit from FSAs?
Absolutely. Because every dollar an employee redirects to the FSA escapes FICA taxes, the employer does not have to pay matching taxes. Employers may also save on retirement plan contributions due to the reduced gross salaries of participating employees. Best of all, offering an FSA will help attract quality employees to the group.

An FSA is an excellent means of offering your employees the optimum in fringe benefits while saving you and your employees hundred, possible thousands, of dollars each year. MedBen recognizes that every employer – and every employee – has specific benefit needs, That's why we will work closely with your group to set up a personalized plan that provides maximum benefits for all participants. Once the plan is in place we provide a wide range of ongoing administrative services (see overview below).

MedBen offers a Full FSA, which uses money from the employee’s account to pay health insurance premiums, and reimburses them for dependent care expenses and a variety of medical expenditures. You may also select a lower-cost “Premium Only” version. No matter what approach you take, your employees will recognize significant tax savings – and will benefit from a better appreciation of the coat of care.

MedBen can assist in every step of the design and maintenance
of a Flexible Spending Account, including:

Working with the employer to develop a plan that suits employee needs.
Introducing the plan to employees, reviewing the Summary Plan Document, and providing an information packet with answers to frequently asked questions.
Holding individual meeting to determine the maximum benefit to the employee.
Providing the group with all required forms.
Processing employee claims for reimbursement of out-of-pocket expenses.
Updating and maintaining employee account records.
Filing all documents required by the Department of Labor and the IRS.
Conducting nondiscrimination testing two times a year, per federal tax law.

For more information about FSAs, e-mail our marketing department at marketing@medben.com.