BENEFITS OF FLEXIBLE SPENDING ACCOUNTS
Employer’s realize real savings in the form of reduced employer F.I.C.A. taxes, F.U.T.A. taxes, disability, and worker’s compensation insurance premiums (varies by state). Typical savings at the employer level can represent as much as 10% of total Flexible Spending Plan contributions, which will most likely pay for administration costs associated with these plans.
When employees purchase benefits on a pre-tax basis through a Flexible Spending Account (FSA), their taxable compensation is reduced which then reduces the wages subject to federal, social security and Medicare tax and, in most states, state income tax.
In addition to the tax savings, there are other benefits to introducing Spending Plans. Since employees would have a cost effective tool to fill in the gaps in traditional health insurance such as co-pays and deductibles along with providing a convenience method to pay for those everyday eligible over the counter items, employers should have more flexibility in insurance plan design, potentially saving on premiums.
» To learn more about the benefits of flexible spending accounts, please continue reading about Trion's Flexible Spending Account solutions, or request a proposal.