Pre-Tax Benefits: What Services Complete Payroll Solutions Offers
A competitive health benefits package can help you attract and retain talented employees. But it can also be expensive. If you’re here, that means you are interested in how Complete Payroll Solutions can help you and your employees save on the cost of health insurance through pre-tax health benefits like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), and Section 125 Premium Only Plans.
For over 18 years, Complete Payroll Solutions has been administering pre-tax health plans to give employees the chance to offset benefit costs with savings from pre-tax dollars. To help you understand how we work with businesses offering these plans, in this article, we’ll discuss our pre-tax services in terms of:
- Available Benefits
- Administrative Services
We know we may not be the right fit for every company. But after reading this, you’ll know if Complete Payroll Solutions offers the pre-tax benefits services that are best for your business.
What pre-tax benefits does Complete Payroll Solutions offer?
Our benefits team works with businesses as a third-party administrator (TPA) – an organization that delivers various administrative services on behalf of a health plan – for several pre-tax benefits. These include:
- FSAs: This pre-tax account, which is owned and set up by employers, is for employees to cover qualified healthcare expenses such as prescription drugs, office visit copays, and dental and vision expenses. Both you and your employees may contribute to their FSA. In addition to tax-free contributions, employees are reimbursed tax-free for their claims. FSA funds that aren’t used at the end of the year are sent back to the employer unless the plan has a grace period or carryover feature.
- HSAs: HSAs are tax-free savings accounts that can be used to pay for both current and future medical expenses like coinsurance, deductibles, and other qualified expenses. These accounts, which employees own, must be paired with a qualified high-deductible health plan. Like an FSA, both you and your employees can make contributions to the accounts and employee contributions and claim payments are tax-free. However, unused funds roll over from year to year and can also earn interest.
- HRAs: An HRA is unique from FSAs and HSAs because it’s fully funded by you, the employer. You own the accounts so that also means you can direct how the funds are used and how much is allocated to each employee. Usually, although it’s not required, an HRA is paired with a high-deductible plan, allowing employees to get reimbursed on their deductible expenses. Your contributions are 100% tax-deductible and the reimbursements are 100% tax-free to employees.
- Section 125 Premium Only Plans: A Section 125 premium only plan (POP) is a tax savings plan that allows employees to pay for their medical insurance premiums on a pre-tax basis. These aren’t insurance plans, so you’ll need to offer a group health plan separately. A POP simply allows your workers to pay for premiums for their group health benefits using pre-tax dollars.
What administrative services does Complete Payroll Solutions provide?
Depending on what pre-tax benefits you decide to offer, there are certain requirements to make sure they’re set up correctly, funded right, and used appropriately. These generally include:
- Develop and distribute summary plan descriptions
- Manage enrollment and set up employee accounts
- Enable self-service through a desktop or a mobile application
- Provide ongoing funding management
- Issue debit cards
- Process claims
- Certify submitted expenses
- Handle reimbursements for manual claim submissions
- Manage employee activity like new hires and terminations
- Perform annual non-discrimination testing
At Complete Payroll Solutions, we can handle all of these administrative tasks for you as your TPA.
What is the cost of pre-tax benefits through Complete Payroll Solutions?
Pre-tax health benefits are a cost-effective way to enhance your offerings, but there are still some expenses you’ll need to cover.
While TPAs may charge differently, at Complete Payroll Solutions, our prices are based on a per employee per month (PEPM) basis. You’ll also usually pay a set-up charge and a monthly minimum cost or base annual fee.
At Complete Payroll Solutions, our pricing is as follows:
- FSAs: We charge $250 to set up an FSA with a base annual fee of $550 and a PEPM of $2.
- HSAs: We charge $250 to set up a plan, a base annual fee of $300, and $2 PEPM for administration.
- HRAs: Our fees include a $250 set-up charge plus a $550 base annual fee and a PEPM of $2.
- Section 125 Premium Only Plans: Our fee is $250 per year for annual administration and compliance.
If you decide to offer multiple plans, we offer a 20% discount for combining an FSA and an HRA account.
How to Choose the Best Pre-Tax Benefits for your Business
If you’ve read this far, you probably already know if Complete Payroll Solutions would be a good fit for your business. However, if you’re still unsure, our pre-tax benefit services may be the right option for your business if you:
- Have up to 100 employees
- Want assistance in plan design
- Prefer personalized service from one dedicated representative versus contacting a call center
- Currently use us for payroll and want to integrate pre-tax salary deductions
- Are interested in additional support like open enrollment meetings for your employees
If our TPA services sound like a good match for you, then take the next step and view our pricing page. However, if you're still asking yourself, "How do pre-tax benefits work?," than check out our next blog.