January 1 is a big day. Not only is it the start of the new year, but for many, it’s the start of new benefits. Each year, employers invest millions in employee benefits programs the cost of which goes up year over year. As prices continue to trend upward, many employers looking to offset the burden of rising costs by offering employees pre-tax accounts. These accounts provide employees with the opportunity to use pre-tax dollars to cover the cost of many healthcare and dependent care expenses. The savings can run up to 40 percent on taxes, depending on which tax bracket they are in.
While the advantage is clear, what’s not is what these spending accounts are and how to use them. In a sea of pre-tax account acronyms–HSA, FSA, LPFSA, DCFSA, and so on–it’s critical to educate employees, eliminate confusion, and help your workforce put pre-tax programs to good use. Equal in importance is that employers know the steps to take to ensure that pre-tax programs are up and running for employees.
Watch on-demand webinar where Megan Burns, Benefits Strategy Lead at Forma, and Brian Gilmore, Lead Benefits Counsel at Newfront discuss:
- The various types of pre-tax accounts
- Common administrative and compliance pitfalls to avoid
- Best practices and strategies
- And transition plan guidelines