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FLEXIBLE SPENDING ACCOUNTS |
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
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