In the past many clients asked about setting up a Flexible Spending Account (FSA) that would allow employees to defer monies on a pre-tax basis to pay un-reimbursed medical expenses. Not only a good deal for your employees but for the employer who saves on the matching FICA (7.65%).
We would usually recommend against it, however, two things have changed and we now strongly recommend an FSA.
Administration Costs have dropped
We are working with a new vendor whose pricing is very aggressive. The rates below are for the complete administration of your FSA for 12 months and include the debit cards:
1-9 ees = $ 750
10-19 ees = $ 1,050
20-49 ees = $ 1,350
50-99 ees = $ 1,750
100 + negotiated
** There is an additional charge the first year of $300 for the plan documentation
$500 roll-over and the FSA Store
Besides the cost the install to administer an FSA plan, the other major stumbing block was the employees were afraid of “use it or lose it”. First the IRS now allows you to roll-over $500.
Second, what if you have more then $500 and you don’t want to lose your monies? Go to the FSA store and buy FSA eligible products
As employers have shifted to plans with higher and higher deductibles and co-payments, the need for an FSA has increased dramatically. At the same time administration costs have dropped and the “lose it” part of “use it or lose it” has become less daunting, what are you waiting for???
Send us an e-mail today and start saving money for both you and your employees on their un-reimbursed medical expenses
* We can add daycare if this is something you desire.