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The BESTflexSM Plan Self-Administration allows participants to deduct money from their pay on a pre-tax basis to pay for their group insurance premiums and fund their flexible spending accounts (FSA), which reimburse eligible health care and dependent care expenses.
As a self-administered plan, we provide the administration materials and the employer handles the day-to-day plan administration. Our administration materials are simple and easy to use for participating employees, and our in-house Compliance team ensures that they are compliant with all Section 125 regulations.
The BESTflexSM Plan Premium Only is a Section 125 plan that allows participants to deduct money from their pay on a pre-tax basis to pay for their group insurance premiums. The plan makes costly group insurance premiums more affordable without any work on the participants’ parts and even benefits businesses, as they save 7.65 percent in social security taxes on every dollar participants run through to the plan.
The 7.65 percent in tax savings can be enough, in some cases, to offset the costs of offering the BESTflex Plan Premium Only. In addition to tax savings, Employee Benefits Corporation provides simple, efficient administration and ensures that the BESTflex Plan Premium Only is in line with the latest Section 125 regulations.
As a self-administered plan, we provide the administration materials and the employer handles the day-to-day plan administration. Our administration materials are simple and easy to use for participating employees, and our in-house Compliance team ensures that they are compliant with all Section 125 regulations.
The BESTflexSM Plan Premium Only is a Section 125 plan that allows participants to deduct money from their pay on a pre-tax basis to pay for their group insurance premiums. The plan makes costly group insurance premiums more affordable without any work on the participants’ parts and even benefits businesses, as they save 7.65 percent in social security taxes on every dollar participants run through to the plan.
The 7.65 percent in tax savings can be enough, in some cases, to offset the costs of offering the BESTflex Plan Premium Only. In addition to tax savings, Employee Benefits Corporation provides simple, efficient administration and ensures that the BESTflex Plan Premium Only is in line with the latest Section 125 regulations.
How the BESTflex Plan works
When employees enroll in the BESTflex Plan, they set aside a portion of their pay to spend on eligible health care and dependent care expenses. Throughout the year, this amount is deducted bit by bit from their paychecks – on a pre-tax basis – and placed in flexible spending accounts (FSA). The usual payroll taxes do not apply to the BESTflex Plan contributions, saving participants from paying approximately 30 percent in taxes on each dollar they contribute.
When participants direct their BESTflex Plan savings to their eligible health and dependent care expenses, they save. In essence, a $10 bottle of aspirin is $7. A $200 week of daycare is $140. A $60 health insurance premium is $42.
Take this as an example.
Imagine that a worker named Steve enrolls in the BESTflex Plan. He’s got a four-year-old daughter and knows that he needs to fund daycare and health care expenses. On a monthly basis, Steve decides to put $400 dollars into a Dependent Care FSA to reimburse his daycare expenses and $100 into a Health Care FSA to reimburse over-the-counter health expenses. He also pays $200 a month for group medical premiums.
That’s a total of $700 in eligible BESTflex Plan expenses per month.
When Steve opens his first paycheck as a BESTflex Plan participant, the savings shine. The $700 he set aside for daycare and health care expenses were deducted from his monthly gross income before it was taxed. Of his $3,000 in monthly income, he is only taxed for $2,300. He ends up paying $690 in taxes and takes home $1,610.
If his full $3,000 were taxed, he would pay $900 in taxes and take home $1,400.
That’s a $210 tax break.
When Steve applies his $210 tax savings to his eligible expenses for each month, he effectively pays that much less.
With proactive employee education efforts, Internet account access and expert account administration, the BESTflex Plan from Employee Benefits Corporation is a convenient, useful way for participants to pay less for a wide variety of health care and dependent care expenses.
When participants direct their BESTflex Plan savings to their eligible health and dependent care expenses, they save. In essence, a $10 bottle of aspirin is $7. A $200 week of daycare is $140. A $60 health insurance premium is $42.
Take this as an example.
Imagine that a worker named Steve enrolls in the BESTflex Plan. He’s got a four-year-old daughter and knows that he needs to fund daycare and health care expenses. On a monthly basis, Steve decides to put $400 dollars into a Dependent Care FSA to reimburse his daycare expenses and $100 into a Health Care FSA to reimburse over-the-counter health expenses. He also pays $200 a month for group medical premiums.
That’s a total of $700 in eligible BESTflex Plan expenses per month.
When Steve opens his first paycheck as a BESTflex Plan participant, the savings shine. The $700 he set aside for daycare and health care expenses were deducted from his monthly gross income before it was taxed. Of his $3,000 in monthly income, he is only taxed for $2,300. He ends up paying $690 in taxes and takes home $1,610.
If his full $3,000 were taxed, he would pay $900 in taxes and take home $1,400.
That’s a $210 tax break.
When Steve applies his $210 tax savings to his eligible expenses for each month, he effectively pays that much less.
With proactive employee education efforts, Internet account access and expert account administration, the BESTflex Plan from Employee Benefits Corporation is a convenient, useful way for participants to pay less for a wide variety of health care and dependent care expenses.
What is a Flexible Spending Account (FSA)?
Each participant elects to put pre-tax dollars into a flexible spending account (FSA) to cover the cost of certain out-of-pocket health care or dependent care expenses for themselves, their spouse and their dependents. The participant decides how much money to put into their FSA during the enrollment period. Then, when they incur eligible expenses, they receive tax-free reimbursements from the FSA.
There are three types of FSAs:
Health Care FSA
This account covers medical, dental, vision and other qualified expenses. Eligible expenses include plan deductibles, coinsurance, co-payments and expenses that insurance may not cover, such as prescription and over-the-counter drugs or orthodontia.
Limited Health Care FSA
This account is used only when in conjunction with a health savings account (HSA). It only covers dental and vision expenses – two types of expenses HSAs do not cover. Eligible expenses include dental office visits, orthodontia, eye exams and glasses.
Dependent Care FSA
This account covers expenses participants incur for dependent care while they are at work. Eligible expenses include daycare, nursery school and day camp for children, as well as services for older dependents that cannot care for themselves.
There are three types of FSAs:
Health Care FSA
This account covers medical, dental, vision and other qualified expenses. Eligible expenses include plan deductibles, coinsurance, co-payments and expenses that insurance may not cover, such as prescription and over-the-counter drugs or orthodontia.
Limited Health Care FSA
This account is used only when in conjunction with a health savings account (HSA). It only covers dental and vision expenses – two types of expenses HSAs do not cover. Eligible expenses include dental office visits, orthodontia, eye exams and glasses.
Dependent Care FSA
This account covers expenses participants incur for dependent care while they are at work. Eligible expenses include daycare, nursery school and day camp for children, as well as services for older dependents that cannot care for themselves.
What are Health Savings Accounts (HSA)?
HSAs are tax-advantaged savings accounts that were first introduced in 2003. As a consumer-driven, spending-account option, HSAs serve to control rising health care costs by giving participants insight into how much health care costs and more control over how they spend their health care dollars.
HSAs cover current and future medical expenses. Funded by employees, employers or a combination of the two, the account allows participants to contribute and withdraw money on a tax-free basis, as long as they use it for eligible, Section 213(d) medical expenses. The account is also portable, meaning it can grow over time, even as participants’ circumstances change.
Participants must be enrolled in a high-deductible health plan (HDHP) in order to establish and contribute to an HSA, and they cannot have any disqualifying health coverage. While Employee Benefits Corporation doesn’t administer HSAs, we do administer special BESTflex Plan plan designs and EBC HRA plan designs that work in conjunction with the HDHPs and HSAs.
HSAs cover current and future medical expenses. Funded by employees, employers or a combination of the two, the account allows participants to contribute and withdraw money on a tax-free basis, as long as they use it for eligible, Section 213(d) medical expenses. The account is also portable, meaning it can grow over time, even as participants’ circumstances change.
Participants must be enrolled in a high-deductible health plan (HDHP) in order to establish and contribute to an HSA, and they cannot have any disqualifying health coverage. While Employee Benefits Corporation doesn’t administer HSAs, we do administer special BESTflex Plan plan designs and EBC HRA plan designs that work in conjunction with the HDHPs and HSAs.
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