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The BESTflexSM Plan is a section 125 plan that allows participating employees to deduct money from their pay on a pre-tax basis and use it to pay for their group insurance premiums and fund flexible spending accounts (FSAs), which reimburse their eligible health care and dependent care expenses.
The plan also benefits businesses, as they save 7.65 percent in social security taxes on every dollar participants contribute to the plan.
There are options employers can choose to create a more customized plan.
Instead of offering the standard Health Care FSA, this plan design includes a Limited Health Care FSA, which reimburses participants for their dental and vision expenses. Participants can also use the Dependent Care FSA for tax savings on their dependent care expenses and pay for their group insurance premiums using pre-tax dollars.
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It also allows pre-tax contributions to HSAs (subject to state taxes in some states).
Employers may contribute funds to any of the accounts under the BESTflex Plan. Employers determine the account, a dollar amount and the requirements for eligibility to receive the contributions. We ensure that the employer's set-up is compliant with IRS regulations.
As employers seek ways to address the cost of health care, one useful plan design feature is the reimbursement of individually billed premium plans. This type of reimbursement arrangement through the BESTflex Plan reimburses substantiated, individual accident and health insurance premiums.
The 2-1/2 month grace period gives participants an 2-1/2 months to use up the money they contributed to the plan, helping them avoid forfeiting the contributions they didn't use in the standard 12 months.
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There is no additional fee required for us to administer the 2-1/2 month grace period, and it's an advantage that can increase participation in and contributions to the BESTflex Plan
Participants use the Benny™ Benefits Card instead of cash to pay for eligible expenses. The card debits the Health Care FSA, saving participants from having to pay out of their pocket for reimbursement on a later date.
Additional Resources:
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