These plans allows your employees to pay their portion of costs for health, dental and vision insurance premiums on a pre-tax basis. Employers save on all Federal, State, Local, Medicare taxes, Federal and State Unemployment Insurance, Disability Insurance and Workers Compensation premiums. Employees save on all Federal, State, Local, Medicare and FICA taxes put through the plan.
In addition to the Premium Plan, you and your employees save a much larger amount by including Flexible Spending Accounts (FSAs).
1. Unreimbursed Health Flexible Spending Account: This benefit, funded by employee salary reductions, allows your employees to set aside a part of their wages on a pre-tax basis for specific health care expenses that are not reimbursed by your group health insurance plan such as co-payments, deductibles and health care items not covered by your group health plan.
2. Dependent Care Flexible Spending Account: Your employees can pay Dependent Care costs through participation in this plan, saving 30-40% of these costs. Employees pay all or part of their Dependent Care expenses with pre-tax dollars.
A Health Reimbursement Arrangement (HRA) is funded entirely by the employer to reimburse healthcare expenses incurred by the employee, his or her spouse, and/or any eligible tax dependents. Employees cannot contribute to an HRA.
To save money, HRAs can be coupled with high-deductible health coverage (HDHC) or offered in a variety of configurations, including on a stand-alone basis or as a Qualified Small Employer Health Reimbursement Arrangement (QSEHRAs).