Flexible Spending & Dependent Care Administration

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Flexible Spending & Dependent Care Accounts are a great way to aid your employees in paying for out-of-pocket medical expenses.

Flexible Spending Account

  • Employers may elect to make annual payroll deduction elections up to $2,700 year(2019) for out-of-pocket medical, dental, vision, RX, Therapy (IRS Section 213D costs) for themselves or their dependents.
  • Employers benefit from reduced payroll taxes and enhanced employee benefits. If employees total annual elections are $100,000 then EMPLOYER may save $7,650 in payroll taxes!
  • Employees benefit from reduced payroll AND income taxes.
  • Plans can be designed to allow up to $500 a year of unused money to rollover to subsequent plan year.
  • Participation in the FSA plan is not dependent upon enrollment in a group health plan.
  • Claims payments made with Debit Card require no/minimal claims substantiation by employee.

Dependent Care

  • Employees may elect to deduct up to $5,000 a year to pay for dependent daycare service.
  • This benefit could easily save employees approximately 30% on their taxes (7.65% in payroll taxes and 20% in Federal/State tax)!
  • Employers could save payroll taxes ($5,000 x 7.65%) $387.50 per enrolled employees.
  • We feel this is a very under utilized benefit and extra employee education would be worthwhile.
  • Unlike the FSA, dependent care elections can be changed throughout the plan year without qualifying events.
  • Adult daycare for parents/relatives who you declare as a dependent for tax purposes are also eligible for the $5,000 deduction.

Contact a Corporate Coverage benefit design consultant to see how we can make this benefit work for you!

*Tax Rates vary…tax savings are estimate. Please consult with your tax consultant to review your specific savings.