(Section 125 Plan Administration)

Why should an employer have a Flexible Benefits Plan?

An employer should have a Flexible Benefits Plan for two primary reasons:

1. The employer will save money.

2. The employees will save money.

General Information

This plan is a significant tax advantage for both the Employer and the Employee because:

• Employees save money on their salary reduction amounts; thereby reducing their taxable wages.

• Flexible Benefits are not subject to payroll tax, so the Employer's tax obligation is reduced. The Employer only pays FICA and FUTA taxes on the reduced salary of the employees. And, in California, state unemployment and worker's compensation can also be avoided on the reduced amount. The more your employees participate, the greater the savings to you!

• Also, you are providing a benefit to your employees that will allow them to increase their spendable income. Employees feel good about making their own choices to suit their individual needs.

Significant cost increases for health insurance and fringe benefits, are factors why Employers are increasing deductibles and shifting some, or more, of the premium cost to their Employees. A Flexible Benefits Plan can help Employers minimize the financial impact that these changes can have on their Employees.

HealthComp is a member of the following organizations:

1. Employers Council on Flexible Compensation

2. Society of Professional Benefits Administrators

HealthComp Flex Plans

HealthComp provides flex administrative services at our Fresno Office. Below are the following types of plans:

1. Premium Only Plan (POP), which include:

• Medical Premiums

• Dental Premiums

• Vision Premiums

• Employer Group Term Life Insurance (up to $50,000)

• Accidental Death and Dismemberment (AD&D)

• Short-term Disability (STD) Coverage

• Long-term Disability (LTD) Coverage

2. Flexible Spending Accounts (FSA):

Dependent Care Expenses, which include:

• Expenses for the care of a dependent child (12 years or under);

• Expenses for the care of a dependent elder (if in your home at least 8 hours/day);

• Expenses for day camp;

• Housekeeping fees, if part of the fee is for child/elder care;

• Expenses for the care of a physically or mentally disabled dependent

Unreimbursed Health Expenses, which include:

• Deductibles

• Copayments

• Orthodontia Expenses that the IRS considers deductible under Code Section 213

• See Eligible Expenses for more examples