What are the Employer benefits?

If you offer these benefits to your employees, you, the employer, will also pay less in Social Security taxes.

If your company is financially unable to give employees additional benefits, you can still - at no cost save the start-up fee - enhance your current benefits with a Flexible Benefits Payroll deduction Program.

Points to Consider
Employees must make their elections in writing prior to the start of the plan year, and changes cannot occur during the plan year unless they are justified by a change in family status or the spouse's employment status. Otherwise, changes can be made only before the plan's anniversary date. Family status changes include marriage, divorce, birth or adoption of a child, and death of a spouse or dependent child.

Plans cannot discriminate in favor of owners, officers, or highly compensated employees.

Tax advantages may change some time in the future with changes in the IRS tax regulations.

Lower Social Security contributions will reduce Social Security benefits slightly, but the current tax savings far exceed the future reduced benefits.

Funds remaining in an employee's reimbursement account at the end of the year will be forfeited by the employee to the employer.

Active and terminated employees can file for reimbursement from their employee reimbursement accounts up to 90 days after the end of a plan year.

If an employee is reimbursed from the employee reimbursement account for expenses that the IRS later determines to be ineligible, those reimbursements may be taxed as income and certain penalties may apply.

Some employees may save taxes by claiming a tax credit for dependent care, but single parents and married parents earning more than $25,000 annually may get more tax savings by using the Dependent Care Reimbursement Account.

Requests for reimbursement may be submitted any time and reimbursement is usually on a monthly basis made directly to the employee.

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