Medical Expenses Not Covered by Health Insurance Can Be Paid Tax-Free through a Section 125 Health FSA Plan
Employees can let the Government pay for up to 40% of their medical expenses not covered by health insurance if their employer establishes a Section 125 Health FSA or Flexible Spending Account. The beginning of a new year is historically when most employers set up Section 125 Health FSA plans for their employees.
Bradenton, FL (PRWEB) November 24, 2006 -- Core Documents, Inc. the leading provider of Section 125 and HRA plan documents reports that large and small employers all over the country are gearing up to offer another plan year of Section 125 Health FSA benefits to their employees. The New Year is historically when most employers start their new plan year.
Why do employers like Section 125 Health FSA plans? It's simple; employers get to reduce their matching FICA tax (Medicare and Social Security taxes) liability of 7.65% on every dollar their employees divert through the Section 125 Health FSA plan. Also, it's an important benefit that employees want and need. So a Section 125 Health FSA plan pays for itself by reducing payroll taxes and employees are happier because they have a valuable new benefit.
Why do employees like Section 125 Health FSA plans? Because they eliminate all income taxes including city, state, federal, and Social Security and Medicare taxes on medical, dental and vision expenses. Employees can save up to 40%, depending on their tax bracket, in federal income taxes alone.
What expenses can be reimbursed through a Section 125 Health FSA plan? Just about any medical expense including dental and vision expenses.
Doesn't a Section 125 Health FSA require an expensive outside administrator to pay claims? No, many employers administer their own Section 125 FSA claims in-house using a simple Excel spreadsheet. For those employers who do want to outsource monthly administration they can choose to hire an administrator for as little as $8 a month per employee. This service normally includes state-of-the-art Internet based account access and a convenient MasterCard debit card to access funds.
Isn't there a lot of annual reporting or forms that have to be filed? IRS Form 5500 filing requirements were suspended in 2002 for all groups with less than 100 participants. Annual non-discrimination testing should be conducted annually. Most companies who provide plan documents also provide the forms needed to conduct annual discrimination testing. Employers also need a written plan document before Section 125 deductions can be taken.
How much does it cost to establish a Section 125 Health FSA plan? Core Documents, the nation's leading provider of affordable Section 125 plan documents can provide everything an employer needs to establish a Section 125 Health FSA for just $99 plus $15 shipping and handling. For $114 employers get everything they need to establish the plan legally and be compliant with the IRS and the Department of Labor. Core Documents also offers a free Excel spreadsheet template for employers who want to self-administer their own plan. They also offer state-of-the-art web-based administration with the debit card starting at only $8 a month. See them at www.CoreFSA.com
# # #
|
