Flexible Spending Accounts

Under IRC 125, employers can adopt a plan to allow participants to set aside money on a pre-tax basis to pay for qualifying medical and dependent care expenses. With EBS, employers can affordably implement and manage FSA programs and take advantage of the often-substantial tax saving. In doing so, employers can more easily attract and retain employees and continue to effectively deliver on their firm's reputation and brand image.

Employer Advantages

• Reduced employer payroll taxes (including Social Security & Medicare)
• Enhanced benefit programs available to employees
• Increased employee satisfaction, attraction and retention
• Reduced workers comp premiums (in some states) based on reduced reported W2 compensation

Employee Advantages

• Reduced FICA taxes (Social Security & Medicare)
• Reduced federal withholding tax
• Reduced state withholding tax (not applicable in some states)
• Regular and timely plan reimbursements for eligible expenses

Earnings Illustration: Annual Tax Savings Using a Flexible Spending Account
	Without FSA Account	With FSA Account	Advantages
Gross Pay	$30,000	$30,000
Contribution to flex plan (before tax dollars)	0	-$3,000*
Taxable Income	$30,000	$27,000
Estimated taxes**	- $10,695	- $9,626 Less Taxes
Income After Taxes	$19,305	$17,374
Dependent Care expenses	- $2,000	- $2,000
Medical/Dental Vision expenses	- $1,000	- $1,000
Tax free plan reimbursement	0	$3,000 Tax free reimbursement $17,374 More money in your paycheck
Net income after taxes & expenses	$16,305
Net Savings by participant in Flex Account is $1,069.00
* Contributions to the flex plan are "pre tax" and therefore reduce taxable gross income. The reduced gross is what is reported on the W2 ** Assumes federal and state taxes of 28% and social security withholding of 7.65%

Standard Plan Implementation Services

• Plan design assistance and documentation
• System setup scheduled to meet client's needs
• Electronic (soft) copies of forms
• Receive and process new elections, changes and terminations
• Claims adjudication (within 5 business days of receipt)
• Claim reimbursement processing (daily)
• Check
• Direct deposit
• Flex Benefit card (always daily)
• Monthly employer reporting
  • Group account activity - year to date
  • Disbursement reports
• Plan discrimination testing (requires information from employer)
• Web access for employer administrative changes

Standard Customer Service

• Toll-free live customer service support
• Web and IVR participant account balance access
• Customer service available via e-mail
• Dedicated plan administrator at client level
• Web access to reports at client level

Standard Renewal Services

• Update plan design
• Update plan year/payroll schedule information in systems
• Dual plan year claims processing during grace period
• Annual enrollment system load
  • Electronic

Optional Services (additional fees apply)

• IRS 5500 preparation
• Custom or divisional reports
• Custom programming or data mapping
• Open enrollment fulfillment
• Printed enrollment materials
• Annual statement fulfillment (stuffing and mailing)
• Welcome letter or plan election confirmation letters
• Enrollment assistance
  • On-line
  • On-site
  • Call-center