The FSA Store
We have been researching implementing FSA plans for a client.
These programs have been around for quite some time, but typically are only popular with larger size companies. Smaller businesses tend to have reservations from both employer and employees. Traditionally, employees have been afraid of the "Use it or Lose it" issue with these plans. Employers have been hesitant with the amount of risk they are exposed to as well. For example, if an employee elects to withhold 2,000 from their pay, that money is available to them from day one. So, if an employee incurs the expense on January 10, has the full $2,000 paid from the plan, and then terminates on Feb 1, the employer never has a chance to recoup that money and ends up funding most of the expense. Risk is inherent on both sides. Some of you may not know that the" Use it or Lose it " has been modified. The IRS now allows a rollover provision. This provision is at the discretion of the employer. Elimination of the "Use it or Lose it" has made it easier to implement FSA's for smaller businesses. Check out this summary of the rollover option. There is another resource you may want to check out and make available to your employees. Qualified eligible medical expenses purchased on line from The FSA Store is a convenient resource for those employees looking to make sure they spend the full amount of their annual pre-tax election. Since most employers have high deductible plans, you may want to reconsider implementing Flexible Spending Accounts for your business. Let us review a cost estimate with you! |