Are you satisfied with your current tax savings?
Many employers find themselves spending time and resources administering Section 125 Plans without seeing the tax savings they hoped for. Reimbursements accounts, such as Health Care Flexible Spending Accounts (HCFSAs) and Health Savings Accounts (HSAs) can often be even more confusing.
When employees don’t understand how pre-taxed benefits work, they are less likely to select them during their annual enrollment. This confusion and lack of knowledge typically leads to less overall participation, and as a result, fewer tax savings for both you and your employees.
We’ve found that participation can often be improved with increased education. Implementing a comprehensive education plan helps give employees confidence in their choices, ultimately increasing participation and tax savings for both them and you.
Employee Education is Key
Benefits are confusing. Especially when it comes to understanding the differences between reimbursement accounts and choosing the right benefits, employees need help.
Our strategy is not only to communicate during enrollment, but before, during, and after. With the help of videos, custom benefits sites, and other educational resources, we can meet the needs of employees with different learning styles.
Which reimbursement account is best for my organization?
When it comes to reimbursement accounts, the differences can be confusing. How do you determine which type pairs best with your health plan offering(s)?
American Fidelity's account managers can help you implement and use reimbursement accounts to work with your medical insurance.
| Healthcare FSAs | HSAs | HRAs | |
|---|---|---|---|
|
Funding |
Employer Employee |
Employer Employee |
Employer |
|
Contributions |
Limited by IRS annual maximum
|
Limited by IRS annual maximum
|
No limit
|
|
Health Plan Requirement |
None |
Qualified High Deductible Health Plan |
Generally, must be enrolled in Employer’s major medical plan. |
|
Carry Over |
Optional $500 carryover
|
Yes |
Yes, if permitted by plan |
|
Eligible Expenses |
Internal Revenue Code defines the eligible expenses |
Internal Revenue Code defines the eligible expenses |
Employer chooses which of the Internal Revenue Code defined eligible are eligible for reimbursement |
Helping You Be Compliant
Do you know where your Section 125 Plan document is located? When was the last time it was updated? Surprisingly, many employers forget to update their plan documents as their benefits change.
Our dedicated Section 125 compliance team and account managers are trained to help. We provide:
- Annual Plan Document maintenance
- Discrimination testing worksheets
- Employee election forms
- Correspondence on compliance changes throughout the year
- Education and communication to employees
Learn More About Our Section 125 Plan Administration Services
Increase Your Tax Savings
Learn how American Fidelity’s tax saving strategies could help your organization.