BASE^® Blog

With the continuous rise of health care expenses, employers are looking for ways to help offset them for their employees but also are finding it challenging to provide a budget-friendly health benefits plan.  With options like a Section 125 Cafeteria Plan, it allows employers to give the employee benefits a boost while staying in budget with the bottom line. 

The 125 Cafeteria Plans are an employer-sponsored benefit plan that lets employees pay for eligible health care expenses on a pre-tax basis.  Called a “cafeteria plan” because it is like walking through the cafeteria, selecting the dishes an individual wants to eat, employees can choose the type of health care benefit they want on their “plate” and keep walking past the ones they don’t want to participate in.        

The BASE® 125 Cafeteria Plans allow employers to customize the benefits they offer to their employees, save money, and allow employees who are paying for health care expenses, insurance premiums, or dependent care expenses to do so on a pre-tax basis. 

The BASE® 125 Cafeteria Plans provide access to quality benefits, while providing a variety of affordable benefit options that complement the current health benefits in place. 

Employers can offer one or all four of the following pre-tax options to their employees:

1. Flexible Spending Account (FSA)
2. Limited Purpose FSA (LPFSA)
3. Dependent Care Assistance Plan (DCAP)
4. Premium Only Plan (POP)

There are 3 rules for cafeteria plans – 1) eligible benefits, 2) eligible employees, and 3) eligible companies.

Eligible Benefits.  The employer’s cafeteria plan can cover one or multiple benefits. 

Eligible Employees.  The benefits the employer decides to implement into the business must be made equally available to employees in the same situation.  For example, but not limited to, employee start date, employee waiting periods, special enrollment periods, and any combination. 

Eligible Companies.  All eligible employees of regular corporations, LLCs, partnerships, sole proprietorships, and anyone owning 2% or less of an S-corporation.

For more information on the BASE® 125 Cafeteria Plans, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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With the price of health care on the rise, many are taking advantage of the pre-tax paycheck deductions that come with enrolling in the Flexible Spending Account (FSA).  Employees will save 25-40% in taxes for every dollar they elect, helping stretch their dollars when it comes to paying for their health care costs. 

Many participants want to know…“What is the right amount to put in my FSA?”

The Flexible Spending Account (FSA) is an employer-sponsored health benefit that allows employees to set aside money, on a pre-tax basis to pay for qualified health care expenses. 

The BASE® FSA can help employees pay for their out-of-pocket health care spending not covered under an insurance plan and cutting payroll taxes by decreasing the total taxable payroll.  Employees now have extra funds to pay for the planned, and unplanned, health care expenses throughout the plan year. 

Regardless of how the FSA is designed by the employer – carryover, grace period, or “use it or lose it” – employees must carefully decide the right amount to contribute to their FSA each year.

As we know, it is impossible to know what the year will be like for anyone’s health, but instead encourage participants to aim for a reasonable estimate.  One place to start is to review last year’s health care, dental, and vision expenses and what is expected to spend for this year.  As a reminder, don’t forget to include copays, urgent care or ER visits, prescriptions, and any planned surgeries or procedures.  But also prepare for:

• Dental costs – will anyone need any orthodontic work this year?
• Vision expenses – will anyone need new glasses or contacts for the year?
• Physical therapy or ER visits – have kids signed up for all the sports activities this year that might result in a few injuries?

It is easy to track your yearly out-of-pocket expenses, but the hard part is estimating emergencies and unexpected costs.  But know that if year-end is coming up fast and you have a lot of FSA funds left, check out the Optum Store to buy your FSA-eligible essentials! 

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

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