BASE^® Blog

Of the parents surveyed in a Care.com Care Report, 67% are spending 20% OR MORE of their annual household income on childcare.  No matter the qualifying expense, it can be a significant expense. 

BASE® is here to help lessen the burden.  So many know about being able to pay for their eligible health care expenses on a pre-tax basis with the Flexible Spending Account (FSA), but there is another tax-advantaged account that can help save money on childcare. 

Dependent Care Assistance Plan (DCAP) is an employee benefit that helps employees pay for the care of their qualifying dependent(s) so that the employee can work, look for work, or attend school full time. 

The BASE® DCAP is a pre-tax benefit that provides some additional financial assistance to allow employees to take care of their family.  Employees can contribute up to the annual maximum limit, $5,000, to pay for their qualified DCAP expenses.   

Childcare is one of the biggest expenses for most parents, and bottom line, if your employees are paying for daycare, the BASE® DCAP is already worth it.  The DCAP can help…

• Employees save $240 in federal taxes for every $1,000 spent on dependent care with DCAP.
• Employees facing the increased daycare costs because according to a Zippia.com, 72% of families say that childcare is more expensive now compared to before the pandemic.
• Any employee that has dependents that live with them that go to daycare.

The Dependent Care Assistance Plan (DCAP) helps employees have peace of mind knowing that they are establishing funds to help pay for the costs of dependent care and increase their take-home pay due to funds being transferred on a pre-tax basis.  The DCAP provides employers with an enhanced benefits package that will help to recruit new and retain current employees. 

To learn more about the BASE® Dependent Care Assistance Plan (DCAP) available, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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Every employee has a different lifestyle, family, and health care needs.  Allowing employees to pick and choose benefits can help boost morale, show more productivity, and result in loyal, hard-working employees.

There are three employee spending accounts – LSA, FSA, and HSA – that all have different purposes for the employee.  But how do the long-standing FSA & HSA compare to the newer Lifestyle Spending Account benefit option?

The Lifestyle Spending Account (LSA) is the most versatile employee benefit employees can use to help pay for products and services to create a healthy lifestyle not covered by insurance.  The BASE® LSA is a post-tax, employer funded account that allows for employees to be reimbursed for expenses that relate to their lifestyle.   It is available to employers who want to promote healthy habits and the overall well-being of their employees.

LSAs are fully customizable, so employers can tailor how the employees use the LSA according to their needs and lifestyle and can also target for specific purposes, be it physical, emotional, or financial.

The Flexible Spending Account (FSA) is a health benefit that employees can use to help pay for health care expenses not covered by insurance.  The BASE® FSA is a pre-tax, pre-determined maximum by the IRS, employee-funded account that is set up by the employee to pay for expenses that relate to health care.  It is available to employers who want to help their employees pay for their eligible out-of-pocket health care expenses. 

FSAs are customized and can include benefit roll-over, grace period, or “use-it-or-lose-it,” but the FSA empowers employees to pay for the health care expenses incurred during the plan year.   

The Health Savings Account (HSA) is a health benefit that employees can use, paired with a High Deductible Health Plan (HDHP), to save and pay for health care expenses not covered by insurance. The BASE® HSA is a pre-tax, pre-determined maximum by the IRS, employee-funded account that is set up by the employee to save and pay for the expenses that relate to health care.  It is available to employers who want to help their employees save and pay for eligible health care expenses, but also create a retirement portfolio and investment opportunities for the future. 

HSAs are customized to roll over year-to-year with a triple tax advantage that empowers employees to make the most out of every saved health care dollar. 

In comparing these benefits, employees can only use the FSA and HSA for health care expenses, while the LSA covers a broad range of expenses to promote well-being. The LSA is also a post-tax employer-funded benefit, while the FSA and HSA are pre-tax employee-funded benefits.

To learn more about the BASE® LSA, FSA, and/or HSA, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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Health Reimbursement Arrangements are IRS-approved, employer-funded health benefits that employers use to reimburse their employees for their qualifying health care expenses.    

Despite the growing popularity of Health Reimbursement Arrangements, many employers are hesitant to implement an HRA into the business due to a few common myths and misconceptions. 

MYTH 1:  HRAs don’t qualify as a real health benefit.

Despite some employers never hearing of them, they are in fact an IRS-approved formal health benefit that employers can use to reimburse their employees.  As with other health benefits, employers must follow the rules when implementing an HRA, such as some rules surrounding contribution limits, reporting requirements, and more. 

MYTH 2:  HRA reimbursements are subject to taxes.

HRA funds aren’t subject to federal or state income taxes and as long as the HRA complies with all IRS regulations, the contributions and reimbursements are not subject to payroll taxes for employees.  *Except for 2% or greater shareholders of an S-Corporation. 

MYTH 3:  HRAs are too complex to administer.

HRAs can be implemented and administered with ease if done right, by a third-party administrator, like BASE®!  With user-friendly portals and apps that simplify administration, day-to-day operation, and reimbursement, it will be easy for employers to set up, fund, and manage the HRA while employees can find it easy to keep track of and request reimbursement for their eligible expenses. 

These are three of the most common myths showing that you can’t always believe every misconception you hear.  BASE® has been administering HRAs since 1999, starting with one type of HRA and today we have a variety of HRAs available to meet various business needs. BASE® HRAs can be customized to suit an employer’s bottom line, while adding value to any benefit strategy.

To learn more about the BASE® HRAs available, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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