IBC provides hassle-free administration. We have helped a growing number of companies increase their profits. Today, with health care reform looming and premiums escalating, more and more companies are choosing 105 Self-Funded Health Plans and Cafeteria Plans with flexible spending accounts for employees. Employers can offset a large portion of their insurance premium increases by self-funding health insurance deductibles and reducing payroll taxes. We tailor products and services to meet specific needs and maintain the highest level of customer service.
FSA (Flexible Spending Account) is a benefit program that enables pre-tax dollars to be used to pay for eligible out-of-pocket dependent care and health care expenses.
With an FSA, you elect to have your annual health care expenses (as outlined above) deducted from your paycheck each pay period in equal installments. Every dollar you contribute to your flex account is tax-free, spendable income.
An added feature we offer is the use of a prepaid benefits card, or the Debit Card. The card contains the value of your annual health care election amount so you can use the Debit Card to pay for eligible out-of-pocket medical expenses. You don’t have to pay cash up front or file claims and wait for reimbursement.
A Limited Purpose Medical FSA works with a qualified high deductible health plan (HDHP) and a Health Savings Account (HSA). A limited purpose FSA only allows reimbursement for preventive care, vision, and dental expenses.
Dependent Care FSA – covers dependent care expenses including daycare, nursey school, and day camp for children, and services for adult dependents who cannot care for themselves.
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A Health Reimbursement Arrangement / Account is an employer funded account that enables the employer to reimburse employee qualified medical expenses at any time without tax liability. HRAs vary greatly in design, but are developed to cover the expenses not covered by group health or supplemental plans.
An HRA can be “linked” or “unlinked.” A linked HRA is tied to a health plan; the employee has to participate in the health plan to be eligible for the HRA. An unlinked (or stand-alone) HRA is set up to pay certain expenses, such as dental or vision expenses, without any connection to an insurance policy.
3 new types of HRA’s:
ICHRA (Individual Coverage HRA)
EBHRA (Excepted Benefit HRA)
QSERRA (Qualified Small Employer HRA).
Contact us for details on any of these three plans.
Managing COBRA and its associated compliance requirements is challenging. Plus, manual invoicing and payment processes can take a toll on your staff. At IBC we’ve got the experience to ensure all communication, billing and collection processes are done right. Our secure system simplifies access to benefits for employers with a convenient and integrated online web portal.
Section 125 Non-Discrimination Testing: If you have a Flexible SPending Account (FSA) or a Premium Only Plan (POP), the IRS requiresyou to submit to non-discrimination testing once a year. THe reason for non-discrimination testing is to prevent Key and highly compensated employees from taking advantage of the benefits that these plans provide for employers and employees alike. Such advantages consist of an increase in take home pay because the dollars spent are pre-tax and a 7.65% savings annually on employers matching FICA tax.
Non-discrimination testing is a big factor in way of compliance. If employers do not adequately follow all the steps necessary for non-discrimination testing, or they fall out of compliance with federally mandated regulations while using these plans, all discriminatory benefits are included in the gross pay of highly compensated employees. This also means that employers can no longer take advantage of the 7.65% tax break on their annual employer matching FICA tax.
- Wrap Document info: The Wrap Document is a shortened plan document and/or summary plan description that incorporates all required language to meet the ERISA guidelines. This document “wraps around” existing insurance policy language, and self-insured plan language, to create a fully compliant plan document and summary plan description. The Wrap Document is a single document that can fully incorporate multiple plan documents for the different employee benefits that an employer offers. It can also be a combination of fully-insured and self-insured plans or any variation thereof. More importantly, only ONE summary plan description and ONE form 5500 is required for all the plans that fall under the Wrap arrangement.
- Premium Only Plan: The Section 125 Premium Only Plan (POP) saves you and your employees money by reducing payroll taxes. It works by making one simple adjustment in your payroll process- employees pay their portion of the insurance premiums on a pre-tax basis rather than on an after tax basis.
One of the best ways to save taxes.
IRS-sanctioned Premium Only Plans were created by the Revenue Act of 1978 and are governed by Internal Revenue Code 125. With a Premium Only Plan:
- Employees don’t pay FICA, federal, or where applicable, state or local taxes on money used to pay for their portion of employer-sponsored insurance premiums or contributions to their Health Savings Account (HSA).
- Employee’s tax savings help defray the cost of insurance premiums.
- Employees can increase their take home pay.
- Your taxable payroll is reduced by the total amount of employee contributions for benefits. Lower taxable payroll means lower payroll taxes.
- You can allow employees to realize an increase in take-home pay and take credit for a terrific new benefit, while saving money.
- You can increase your employees’ share of insurance premiums without negatively affecting their take-home pay.
The IBC Portal provides 24/7/365 online access. From the portal, consumers can select to view account information, file claims and distribution requests, manage their profile, view notifications, access forms, link to helpful information, and more.