What are Flexible Spending Accounts (FSAs)?
Also created under Section 125 of the Internal Revenue Code, a Flexible Spending Account helps fill the coverage gap left by out-of-pocket expenses like deductibles, coinsurance, office co-payments, prescriptions, and dental and vision care. Up to $2,600 of these expenses may be payroll deducted on a pre-tax basis annually, resulting in significant tax savings for the employee and the employer. Also, the employer can allow their employees to carry over up to $500 of unused funds at the end of each plan year. Flexible Spending Accounts may also be funded by the employer, above and beyond the $2,600 employee limit.
Once enrolled, employees can only change their elections within 30 days of a Qualified Event. A Qualified Event may include marriage, divorce, birth, adoption, death or loss of coverage. Changes must be consistent with the change in family status. Employees should carefully estimate the amount needed to cover their expenses. Flexible Spending Accounts are subject to the "Use it or Lose ir rule, which states that pre-tax plan elections must be used within the plan year or they will be forfeited.
Most employers take advantage of the convienience of electronic reimbursement made available through the use of the MySource Debit Card as an alternative to traditional methods of filing claims. The MySource Debit card can be used at qualifying merchant locations wherever MasterCard is accepted - from physician and dental offices to pharmacies and vision service locations. The MySource Debit card allows employees to pay for expenses at the point of service, providing them with instant acccess to their account, without having to complete claim forms.
Manual paper claim processing is also available to employees for when Service Provider debit card processing is not available.
Flexible Spending Accounts
List of FSA services offered by TPS Group
- Preparation and generation of Discrimination test and results.
- Preparation and generation of Employee Coverage Report for payroll purposes.
- Preparation of Administration Guide with status change matrix, claim forms, enrollment forms and all necessary forms. Preparation of Service Agreement.
- Data Entry of all Salary Reduction Agreements.
- Opening of individual debit card accounts.
- Preparation of introduction letter to participant with instructions about the MySource debit card.
- Preparation and distribution of employee verification statement.
- Review and processing of the Salary Reduction Agreements of all new participants.
- Processing of deletions/terminations of employees.
- Processing of all family status changes.
- Processing of all plan changes, when applicable.
- Processing of FSA manual reimbursement claims.
- Disbursing of reimbursement claim checks, when applicable.
- Preparation of monthly account balance report for employer, as well as a cash status report.
For more information about FSAs or any other Benefit Programs offered by TPS Group, Contact Us Today.