BASE^® Blog

The BASE® Dependent Care Assistance Plan, also known as a Dependent Care FSA, is a plan established by an employer that allows employees to set aside money from each paycheck, on a pre-tax basis, to pay for qualifying dependent care.  This money can help for qualifying dependent care expenses such as daycare, preschool, and before and after-school care...

...But did you know that it also helps to pay for elder care?

By the year 2040 (that's only 23 years from now) the percentage of people aged 65 and older will have nearly doubled to 22%, up from 13% in 2010.  Yet, the past few years has seen little growth in the number of employers offering benefits for employers who care for older and disabled relatives (Innovative Employers Enhance Caregiver Benefits). 

In a study by ReACT, a coalition of more than 40 companies and non-profits dedicated to addressing the challenges faced by employee caregivers and reducing the impact on their employers, on Emory University in Atlanta, revealed that 15% of respondents were currently taking care of an adult family member.

"Nearly 60% of those people expressed concern about managing the care of an adult loved one in the next one to three years," explains Audrey Adelson, Emory's manager of work-life.  (Innovative Employers Enhance Caregiver Benefits).

Do you, or your clients, know that by implementing this BASE® 125 Cafeteria Plan into their business, their employees will not have worry about the costs of taking care of their mother, father, or spouse?

Dependent care to many employees or employers equates to daycare, so how can it be used for elder care?  Keep reading!

Who is eligible to use DCAP for elder care?

• A participant must be at work during the time the eligible dependent receives care
• Participants must have a spouse, or a dependent parent who is physically or mentally unable to provide for his/her own care

Who is considered an eligible senior dependent for reimbursement?

• Your spouse, or a dependent parent, who is mentally or physically incapable of caring for himself/herself and who lives with the participant for more than half of the year

What kind of care is eligible for reimbursement?

• Inside or outside the home by anyone other than the member's spouse
• In a dependent care facility which meets all applicable state and local regulations
• By a housekeeper whose services include, in part, providing care for a qualifying individual

No matter what the company, or size, the Dependent Care Assistance Plan is a reality.  The employer is able to offer an enhanced benefits package that can help with recruitment and retention of employees, and financial benefits from the reduction of the employer's share on payroll taxes.  The employee gets the peace of mind they deserve; continuing to work and establishing funds to help pay for the cost of dependent care.  Since these funds are transferred on a pre-tax basis, the employee is able to increase their take-home pay. 

Contact BASE® today to learn more about this and other money saving benefit strategies by visiting our website or calling 1-888-386-9680.

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In dealing with Health Reimbursement Arrangements on a daily basis, BASE® is interested to learn where the proposed expansion of HRAs will lead.  Around since 1954, Health Reimbursement Arrangements have long been a viable option for affordable healthcare.

HRAs have continued to evolve, but the tax-advantaged plan operates on the principle of providing more flexibility and choice regarding employee healthcare when employers establish these account-based arrangements.

According to the White House website:

The order directs the Departments of the Treasury, Labor, and Health and Human Services to consider changes to Health Reimbursement Arrangements (HRAs) so employers can make better use of them for their employees.

• HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments. 

• The IRS does not count funds contributed to an HRA as taxable income.

• Expanded HRAs could potentially give American workers greater flexibility and control over how to finance their healthcare needs.

Implementing Change

None of the proposed changes would take effect immediately.  In fact, the Executive Order gives the Secretaries of the Treasury, Labor, and Health and Human Services 120 days just to propose new regulations or revised guidance.  These proposed regulations or revised guidance are just that, simply recommendations to increase the usability of HRAs, to expand employers’ ability to offer the tax-advantaged plan to employees.

The hope is to further simplify current regulations, while making HRAs even more helpful when it comes to covering the cost of healthcare.  In turn, the idea is that HRAs will only further expand the range of health care options.

Moving Forward

The Executive Order focuses on three main areas for improvement for the “near term”.  Meaning, things will remain status quo through the end of the year, due to the time it will take to propose regulations, and also taking into consideration the Secretaries will need to consider and evaluate public comments on the proposals.  

At the end of the day, BASE® is already offering a variety of HRAs to employers of all sizes to assist in financing their healthcare “to the extent permitted by law” and “supported by sound policy”.  We welcome the expansion, and the idea of further simplifying an already great resource for employers and their employees to make healthcare more affordable.

If you aren’t familiar with all of the HRA options currently available, call 1-888-386-9680 to learn how HRAs provide flexibility, choice, and affordability when it comes to healthcare.

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With summer winding down, it is time for farmers to start preparing for the colder months! Growing up on a farm, I always knew that fall had officially arrived when harvest started. Combines and empty fields were signs that fall had begun and farmers were in the midst of their busiest time of year. During harvest, farmers are putting in long hours and late nights to get all their work done in a short amount of time. While most start preparing months in advance, there always seems to be an inevitable cost that comes up. They may have to hire more help or repair equipment; this time of year can be expensive. Luckily, there are ways for the family farmer to save money with creative benefit and tax planning strategies.

BASE® has creative money saving benefit strategies, like the Section 105 HRA. The average BASE® HRA client saves $4,700 each year. This plan allows small business owners the opportunity to deduct up-to 100% of health care costs, including individual insurance premiums and qualified out-of-pocket medical expenses. Using BASE® products will not only allow farmers to save valuable tax dollars, but they also provide peace of mind when concerning IRS, DOL and ERISA rules and regulations.

BASE® is able to help the family farmer yield more of their hard earned money through tax savings. Many family farms have utilized this benefit option and have seen great results. David and Colleen are one example of a self-employed farming team that has seen success by utilizing a Section 105 HRA.

“As a self-employed farming team, a husband and wife can utilize the employer-employee relationship, with qualified documentation of compensation and reimbursement methods, to create additional tax savings each year with the BASE® HRA,” according to Colleen. “With drastically increased health insurance premiums and health care costs, every dollar saved is important.  That is why taking advantage of this benefit is so important, especially when the BASE® HRA allows us to legitimately deduct our health insurance premiums.”

From the guidance offered the very minute they enrolled in the plan to the necessary documentation, they felt everything was very easy to understand.  The best part is when they receive their BASE® HRA Annual Summary Report at the end of each year to provide to their tax preparer, which makes it possible for them to deduct well over the $4,700 in tax savings clients average each year.

 “We highly recommend the Section 105 BASE® HRA to create a means to save on your taxes each year. If you are a self-employed farmer, business owner, or own a small company, BASE® has many HRA options available for you to inquire about.”

BASE® works with tax advisors and insurance professionals across the nation, making sure they are up to date on the latest changes and advising them on products to fit the needs of their clients. The BASE® HRA is a great option for those looking to go beyond the standard deduction, and just one of the many money saving benefit and tax planning strategies available.

No matter the business type, call BASE® to learn more about Section 105 HRAs and other creative benefit strategies during these autumn months and fall into savings.

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