Flexible Spending Accounts (FSA)

Flexible Spending Accounts: FSA, Cafeteria Plan, Pre-Tax Deduction, On-Site Seminars, New IRS Regulations, Employee Benefits

As part of a new benefit program, or added to an existing employee benefit program, Flexible Spending Accounts (FSAs) offer your employees a way to save tax-free earnings to pay for out-of-pocket medical bills and expenses.

Dealing with ever-increasing medical costs has made paying for proper healthcare an issue for many employees. Your Russell Benefits consultant can help you establish this employee-friendly, tax saving benefit your staff will truly appreciate.

FSAs: A Cafeteria Line Full of Choices

FSAs, commonly known as "cafeteria plans," allow employees to deposit a specified amount from each paycheck, on a pre-tax basis, into their account, to pay, using tax-free income, for certain expenses allowed under governmental policy, such as:

• Dependent care
• Child-care, up to certain maximums
• Eyeglasses
• Insurance co-payments
• Items not covered by regular insurance plan

Combining an FSA  with an HRA or HSA allows more flexibility concerning medical decisions, especially for families and individuals with dependents. FSAs will cover dependent costs, whether covered under the primary plan or not.

FSAs: New Laws Extend Payment Period

Until recently, the primary drawback of FSAs had been the Internal Revenue Service's “Use It or Lose It” policy, which stated that any monies remaining after the last day of the coverage year were forfeited.

As of May 18, 2006, new IRS regulations extended the use of existing funds to allow up to two months and 15 days after the benefit year ends to file claims for that year, which makes an FSA a much more attractive employee benefit. . 

As a part of our commitment to customer service,  Russell Benefit Consulting, centrally located in Indianapolis, Indiana, will send a representative to your  workplace to hold on-site seminars on the features and benefits of FSAs, to help your employees make an informed decision, including:

• What contribution levels might be appropriate

• The value of pre-tax deductions – for example, we will illustrate how a $100 contribution can reduce take-home pay by only $75 – that can save thousands of dollars a year

• How the program can help stretch paychecks

Employee Benefits Administrator Groups

To remove the burden and cost from employers, we also administer these programs. Learn more at Employee Benefits Management / Administration

Learn More About Health / Medical Insurance

Fully-Funded Plans
Self-Funded Plans
Health Savings Accounts
Health Reimbursement Accounts