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LOVE an HRA and What It Does For a Business

Coming off of Valentine’s Day, we should all be inspired to share the LOVE!  What better way to spread the LOVE than by implementing a Health Reimbursement Arrangement from BASE® to save valuable tax dollars and provide an enhanced benefits package employees will LOVE too!

A Health Reimbursement Arrangement (HRA) is the perfect solution to saving both the employer and employee money with an employer-sponsored reimbursement program.  This tax-advantaged health benefit helps provide employees the health care flexibility they need.  An HRA is an IRS-approved benefit used to reimburse employees for their qualified medical expenses.

There are so many things to LOVE about implementing an HRA into a business.  Check out a few below! 

  • COST CONTROL. The employer establishes the benefit limit, thus, making it easy to stick to the yearly budget and keep the business profitable. 
  • The employer has the ability to design the plan that will best suit the needs of the business. 
  • VALUABLE TAX SAVINGS. Employer’s contributions are 100% tax.

Who doesn’t LOVE to save money?  Whether a business owner is self-employed or has multiple employees, BASE® has an HRA to fit various business situations.  Check out what Colleen E., a BASE® HRA Client, said about her BASE® HRA!

“The Section 105 BASE® HRA is the most affordable health reimbursement plan that we have found. The staff has been very friendly and helpful from the very beginning. From the guidance offered the very minute we enrolled in the plan to the necessary documentation, we have felt everything has been very easy to understand. My husband and I feel that the staff is very knowledgeable with answers to any questions, and always keeps us informed of compliance issues that might arise in the age of healthcare reform. The best part would be the thousands in additional tax savings each year that wouldn’t be possible without the BASE® HRA in place."

If you are a self-employed farmer, business owner, or own a small company looking for ways to save on the cost of out-of-pocket medical expenses and health insurance premiums, BASE® has many HRA options available for you to inquire about.  They have the knowledge to help you get started with the proper option for you.  As a self-employed farming team, we highly recommend the Section 105 BASE®HRA to create a means to save on your taxes each year. “

BASE® continues to help clients, just like Colleen, to LOVE their benefits!  Call 1-888-386-9680 to learn more about the tax-advantaged benefit plans BASE® has to offer and the health care savings they provide!

125 Cafeteria Plans – Carryover vs. Grace Period

You’ve probably heard the terms “carryover” and “grace period” when it comes to the 125 Cafeteria Flexible Spending Account Plan designs, but what do they mean? While both terms relate to the funds that remain at the end of the plan year, they do different things.

CARRYOVER – funds in an FSA can be carried over from one calendar year to the next. The current amount allowed by the IRS is $500. Any amount over the carried over $500 at the end of the year is forfeited. This plan design can only be used for the medical FSA.

GRACE PERIOD – the time that funds in an FSA can be used is extended from the 12-month actual plan year to 14 months and 15 days. The grace period gives the employee an additional 2 months and 15 days to spend what is left in their FSA from the previous plan year. Any amount left at the end of the extra 2 months and 15 days will be forfeited. This plan design can be used either with the medical Flexible Spending Account (FSA) or the Dependent Care Assistance Program (DCAP).

Either plan design eases the year-end “spending rush,” gives employees more time to pay for their medical expenses, and mitigates the difficulty of predicting their future medical expenses.

Currently, many employers use the “use-it-or-lose-it” method. In this situation, if at the end of the year there are funds still available in the employee’s FSA, those will be forfeited. Many employees may choose not to participate because they cannot predict their future health care spending for that plan year and don’t want to lose their hard-earned money.

At the end of the day, BASE® is here to save employees and employers as much valuable tax savings as they can. Once the employer chooses, the decision adds an extra benefit to their benefits package. By adding one of these plan designs to their already great benefits package, more employees begin to participate, which leads to the employer saving even more valuable tax dollars.

Both options will provide the employer (and their employees) peace of mind knowing that their FSA funds will be able to go farther than before. For more information, please call BASE® at 1-888-386-9680.