The Advantages of FSA

Employers may implement flexible benefit programs for many reasons including the need to control benefit costs and a desire to meet the varying needs of individual employees. Coupled with the benefits debit card,  FSA spending is as easy as the swipe of a card.

FSA plans may help employers control their benefit costs by providing a mechanism for limiting their benefit expenditures without necessarily sacrificing plan quality. Since employees can make voluntary contributions toward benefits under an FSA  plan, an employer may continue to offer a costly benefit such as health insurance without having to bear the full cost of premiums. Employers also may find it easier to introduce cost-sharing measures in a flexible benefits plan. For instance, new or increased medical deductibles may be more palatable to employees if a medical flexible spending account is offered so that employees may pay for the deductible on a pre-tax basis.

Other advantages of implementing a flex plan include:

• Tax savings for employers and employees

• Employees can enjoy savings by applying premiums from duplicate coverage to other benefits or cash

• Personalized benefit packages can increase new employee recruitment and retention

• Employees choose how to spend their benefit dollars and better understand the cost and value of their benefits

• Softening the impact of benefit cutbacks by continuing to offer rich benefit plans with cost-share options

• Replacing/consolidating disparate plans by offering the same plan choices to all units at differing cost levels