Flexible Spending Account (FSA)

The Section 125 Flexible Spending Account (FSA) enables employees to pay for specific health and childcare expenses with pre-tax dollars. An FSA not only reduces your employees’ taxes; it also reduces the FICA taxes your company pays. For this reason, each year more and more companies consider adopting an FSA, and more are choosing Manley. At Manley Services, we have the capability to tailor an FSA package to meet your company’s individual needs.

Under Section 125, there are three types of plans: Premium Only, Healthcare Expense FSA, and Dependent Care. Whichever plans you choose to offer your employees, there are several common features:

• Employees determine their own contributions based on their expected expenses.

• Once employees estimate their out-of-pocket expenses for the plan year, this amount is divided by the number of pay periods in that year and deducted pre-tax from each paycheck.

• We provide all necessary enrollment materials and assist you in customizing informational materials. We also educate employees about the benefits and risks that may be involved in participating in the plan.

• We handle reimbursement, issuing checks or direct deposits directly to the participants within approximately one week of receiving their request.

• At the end of the plan year, any unused funds in the FSA account are forfeited to the employer.

The Benny™ Card

For a small additional charge, you can provide your FSA enrollees with the Benny™ Card, a special MasterCard® that draws on the value of the FSA election amount. Click here for more information, or visit www.MyBenny.com.

Premium Only Plan

This basic plan allows employees to set aside pre-tax money to pay for their portion of their health insurance premium. Because employees know in advance how much their premium will be, there is no need to estimate this expense. They also don’t have to file any additional tax forms as their W-2 will simply reflect the lower taxable income. Most employees will accomplish enrollment automatically through a negative election.

Healthcare Expense FSA

This account allows employees to set aside pre-tax money to pay for medically necessary healthcare expenses that are not covered by a health plan. Eligible expenses include health insurance deductibles, coinsurance, copayments, dental care, vision care, prescriptions, and over-the-counter drugs.

Dependent Care FSA

This account allows employees to set aside pre-tax money to pay for dependent care expenses. Employees may either participate in this FSA or take the IRS standard dependent care tax credit, but not for the same expenses. Many times, the FSA provides a greater tax savings than the tax credit option.

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