BASE^® Blog

Lifestyle Spending Accounts (LSAs) have been around for the past 5-6 years but have recently caught the attention of employers because of the flexibility LSAs offer.  Lifestyle Spending Accounts allow for both the employer and employee to “have it your way.”

The Lifestyle Spending Account (LSA) allows employers to customize a post-tax spending account to help their employees pay for eligible products and services that promote healthy habits and the overall well-being of their employees. 

The BASE® LSA is available to all businesses who want to help their employees pay for eligible expenses that promote physical, financial, and emotional well-being that are not covered by insurance.

Because of the flexibility of the Lifestyle Spending Account (LSA), one of the major benefits is that there is no “typical” design.  The design comes down to exactly what the employer wants – they can have it their way.  The list of eligible expenses is determined by the employer, so the list can be very narrow or very broad.  One option is the employer can decide to give employees one lump sum to use towards all categories - physical, financial, and emotional – and pay for the eligible expenses that they need.  Another option is the employer can choose to break out the categories, provide certain categories with a certain amount of reimbursement, allowing the employees to still pay for their eligible expenses.    

Each LSA can have its own plan design, employee eligibility, dollar amounts, as well as funding and reimbursement criteria.  Lifestyle Spending Accounts enable companies to give their employees an incentive without making a permanent commitment such as a raise, helping employees pay for their physical, financial, and emotional needs.  The LSA also allows for a simple way to increase benefit options to help attract and retain good employees. 

When a business wants to implement an LSA into the business, how it is designed is totally up to them and their bottom line.  Just like Burger King, the employer can “have it your way” and BASE® is here to help. 

For more information on the BASE® Lifestyle Spending Account (LSA), contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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The Section 105 HRA is not actual magic, but what it can do for small business owners is magical.  This HRA helps businesses go beyond the standard deduction and save thousands of dollars each year.  With just the flick of a wand (or a click of a mouse to submit eligible medical expenses with BASE®), a client could save, on average, $5,900 in tax savings. 

The Section 105 Health Reimbursement Arrangement is an IRS-approved health benefit that allows self-employed individuals to employ their spouse, who is active in the business, and reimburse, tax-free, eligible health care expenses for the employee, spouse, and their dependents.      

The BASE® Section 105 HRA is a tax savings plan that allows small business owners the opportunity to deduct up-to 100% of health care costs, including insurance premiums and qualified out-of-pocket health care expenses as a business deduction. 

Let’s see how the magic works with a real-life example >>>

Tom is the sole proprietorship.  His wife, Anna, provides valuable services to the business such as bookkeeping and more.  Through the advice of his financial planner, Tom decides to enroll in the Section 105 HRA with BASE®.  Tom talks to a Sales Rep with BASE® and they put a compensation plan together for Anna, and Tom and Anna start saving valuable tax dollars right away. 

ABRACADABRA…and the wave of a magic wand… MAGIC HAPPENS.  Because Tom files his taxes as a sole proprietor on Schedule C of the Form 1040 going beyond the standard deduction, making the savings with the BASE® Section 105 HRA purely magical.  By turning Tom and Anna’s health care expenses into a tax-favored business deduction, they can offset income and self-employment taxes. 

The BASE® Section 105 HRA is a great method of increasing tax savings for a wide variety of small businesses, such as the farmer, self-employed business owner, and more.  Business structures that qualify are sole proprietors, partnerships, C Corporations, and S Corporations.  When businesses enroll in the BASE® Section 105 HRA, the employers have access to a comprehensive tax-advantaged health benefit plan with reliable service and support, reducing the financial impact of health care expenses and paying for eligible out-of-pocket health care while paying no taxes on reimbursements. 

For more information on the BASE® Section 105 HRA, contact BASE® at 888.386.9680 or visit www.BASEonline.com

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