A Basic Look at FSA – A General Overview
Recent studies have uncovered that over fifty percent of employees in mid-sized to large firms are offered an FSA as part of their benefits package. While health insurance and retirement packages are the most desired benefits for most employees, a great FSA can be just as attractive to some employees. And since there are several types of FSA options available and the cost of implementing and maintain a flexible spending account is lower than you might realize, adding FSA options to your existing employee benefit package is a great way to improve your workers' morale and attract new hires. Here's a quick look at the basics of these accounts and some facts about them.
An FSA is essentially a tax shelter set up by an employer for their workers to take advantage of. In most cases the FSA is health based. These health related flexible spending accounts allow workers to place money into the account without tax penalties. The funds in the FSA can then be used to purchase basic medical supplies or care that isn't covered by their insurance policy, such as bandages, rubbing alcohol, over the counter medications, and much more. The money in an FSA can also be used to pay insurance copays or deductibles. And since the money is tax-free, your employees have more of it to apply to their health care.
There are FSA options that go beyond the health related FSA, although it is by far the most common. You could offer an adoption based FSA, for instance. Although only a small percentage of your workforce will likely need this option, it can greatly offset the costs of adopting a child and will be appreciated by those who do take advantage of it. Some FSAs focus on money to be used for the care of a dependent such as for child care costs, a serious advantage for those spending their income on daycare.
Forty six percent of employees in a recent study said that having access to an FSA was important to them, highlighting the benefits that FSA options provide employers. They're easier to set up than health insurance policies and much cheaper. And since it's the employees themselves who contribute to their FSA, you'll have few added monthly costs beyond a basic fee. And like other employee benefits, offering an FSA is just another way to let your employees know that you value their efforts. They can help boost productivity through increased morale.
Unicorn HRO offers FSA management solutions that will make setting up and maintaining an FSA easier than you might think. By giving your employees the ability to log in and manage their FSA on their own time you can let your HR department focus on other aspects of their job and let your employees feel like they have control over their FSA, a pair of benefits that only add to the attractiveness of providing FSA options to your team. If you're ready to give your employees another reason to keep working at their best for you, a flexible spending account is a great and inexpensive way to go.