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The Flexible Spending Plan (also known as an IRS Section 125 Cafeteria Plan) is a tax savings plan designed to save money for employers and employees. It allows employees to payroll deduct money on a pretax basis to pay for certain health and/or voluntary insurance and medical and dependent care expenses. Deductions lower an employee's taxable income, which reduces money paid on federal, state and Social Security taxes.
Benefit Services of Hawaii, Inc. (BSHI) has several Flexible Spending Plan options. The "full" flex plan offers any combination of three accounts: insurance premiums, medical expenses and dependent care expenses. The Flexible Spending Plan can be offered in conjunction with voluntary insurance benefits, since most voluntary insurance benefits can be pretaxed.
BSHI can provide you with a full range of pretax spending account options, including:
The Insurance Premiums Account lets employees pay their portion of insurance premiums before taxes are calculated.
The Medical Expense Account allows payment for medical, drug, dental, vision and similar expenses that health plans don't cover, using pretax dollars.
The Dependent Care Expense Account allows payment for child or adult care services, like baby-sitting fees, afterschool care, day care for both children and adults and vacation programs, using pretax dollars.
If you're interested in offering this valuable tax savings benefit to your employees, contact us for more information.
