Flexible Spending Accounts
Attention Worksite Marketing Agents! FSA's can help you put more money back into the employees hands without having to increase employer costs at all! In fact, you might even save employers some money too. By setting up an IRS Section 125 Plan Flexible Spending Account you can help an employee who earns $30,000 each year reduce their taxes by as much as $1,200. That puts more money. More money to spend on supplemental insurance products.
Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Savings Account (FSA) lets an employee set aside a certain amount of your paycheck into an account — before paying income taxes. During the year, employees have access to this account for reimbursement of expenses — not covered by insurance — that you regularly pay for, such as: Deductibles, co-pays, and other eligible expenses not covered by insurance. Prescription drugs and medical supplies Over-the-counter drugs that are medically necessary like allergy medications, aspirin, antacids, or non-prescription drugs with doctor's letter of medical necessity. Dental services, orthodontics, and dentures Eyeglasses, contacts, solutions, and eye surgery Weight-loss programs (associated with a specific disease) Weight-loss over-the-counter drugs with doctor's letter of medical necessity
The hard part about FSA's - Employee Training
In order to free up employee money to spend on supplemental insurance, you will need to make sure that the employee understands the value of using pre-tax dollars for medical spending. You will need to help them create a budget and make sure they are aware of the use it or loose it rules of an FSA. Don't let this rule scare you or the employee. This rule helps you show the employee the importance of budgeting and the true value of your supplemental insurance.