Section 125 / Flexible Spending Accounts
A Component of Tucker Administrators’ Employee Benefit Risk Management Program
*FSAs are for benefits-eligible employees, and may be subject to waiting periods-contact Human Reousrces to see if you are eligible.
Tucker Administrators provides administrative services for Flexible Spending Accounts, (FSAs) that allow employees pay for unreimbursed medical expenses and work-related dependent care on a pre-tax basis.
Generally, these eligible expenses include hospital, surgical and other unreimbursed medical expenses incurred for care of the employee, his or her spouse and dependent(s). For example, a flexible compensation plan might be used to reimburse expenses applied to a deductible and co-insurance amounts. Expenses for annual physicals and preventive care, as well as dental, vision, and hearing. Work-related dependent care expenses are also eligible.
Through an employee-funded flexible compensation plan, both the employer and employee stand to receive substantial payroll tax relief. Since employee salaries are being reduced (their annual election divided into equal amounts for each payroll period), Social Security and unemployment compensation insurance are also reduced, thus lowering employer payroll taxes. The employer not only saves on payroll taxes, but the employees also receive net pay raises. All flexible compensation participants can have net pay raises. Employer tax savings can offset a plan’s modest administrative costs, and these plans can serve as strong recruiting and retention tools for the most talented employees.
Here's how it works:
It still remains one of the most innovative ideas in employee benefits today.
Tucker Administrators will provide the following services:
•Work with the group on a specific set of benefits which will accomplish your aims of the plan
•Provide consulting, data and planning to implement the plan
•Consult with employer to determine the appropriate contribution levels for intended benefits
•Prepare the Plan Document outlining plan benefits and provisions
•Complete set up and administration of pre-paid benefit (debit) cards
•Create customized website for employee/benefits administration access, 24/7
•Evaluate claims data regarding eligibility for reimbursement
•Advise client on regulatory issues related to FSAs
•Provide dedicated customer service representative to handle phone or email inquiries
•Review marginal or questionable claims
•Notify and follow up to claimants of ineligible claims, indicating reason for declination
•Prepare periodic status reports of plan participant account and claims summary
•Complete setup for Tucker pre-paid benefit (debit) card and Direct Deposit for Claim Reimbursement
•Provide nondiscrimination testing if requested
Pre-Paid Benefits (Debit) Card
We have found that employers and employees alike are more likely to participate in an FSA if the plan administration is easy to understand and streamlined. A component of that is providing a pre-paid (debit) card for reimbursement of participant expenses. The card eliminates the need for employees to pay cash for eligible services and wait for reimbursement for most purchases. The participant swipes the card and thereby accesses their funds electronically at the point of sale. The card may be used for unreimbursed medical expenses at discount stores, supermarkets, department stores, and pharmacies that can specifically identify FSA-eligible items at checkout. Most purchases are auto adjudicated electronically, so the participant does not need to send Tucker every receipt. However, IRS regulations require that FSA participants save all receipts for verification of compliance.
Tucker Administrators also provides a customized website for FSA so:
- Employee may view plan document, examine participant account balance information, claims status including pending and payment information through their secure login and password
- Employer may verify participation and eligibility, enrollment, individual deductions, individual participant account balance information, claims status including pending and payment information, and run Excel-compatible reports.