There’s More to Section 125 Plans Than the Standard Medical FSA
Section 125 Plans
Did you know there’s more than one type of pre-taxed account under a Section 125 plan? Many are familiar with the traditional Medical FSA, which allows employees to contribute pre-tax dollars for eligible healthcare expenses. Expenses can include things like co-pays, deductibles, prescriptions, dental care, and vision expenses. But the word of Flexible Spending Accounts goes beyond that. In fact, BASIC offers four pre-taxed accounts that are related to FSAs because we know every organization is unique with their own specific needs.
Our offerings include:
- Medical FSA
- The classic FSA plan. Employees can contribute pre-tax dollars to cover things like:
– Insurance Deductibles
– Co-payments and coinsurance
– Prescriptions
– Dental or Vision expenses
– Over-the-counter medication*
– Menstrual products including tampons, pads, liners, and cups*Employees’ entire annual election is available from the first day of the plan year.
*Eligible under the CARES Act of 2020
- Limited Purpose FSA
- Limited Purpose FSAs were designed to work in-conjunction with Health Savings Accounts (HSA). Participants who elect a Limited Purpose FSA can pay for dental and vision expenses with pretax funds. This plan helps employees save money while retaining their HSA eligibility. Learn more about adding a Free BASIC HSA here!
- Dependent Care Assistance Plan
- Established to pay for certain expenses to care for dependents while the legal guardian is at work. While this most commonly means child care, for children under the age of 13, it can also be used for a dependent of any age who is physically or mentally incapable of self-care.
Unlike a Medical FSA, Dependent Care Assistance Plans are a pay as you go account.
- Premium Only Plan
- POP Plans allow employees to pay for their employer’s sponsored health plan premiums before taxes. Regulations require a legal plan document to offer this benefit.
There’s plenty of Section 125 plans outside of the standard Medical FSA, and BASIC has decades of experience in benefits administration to help design a plan that’s right for you. Learn more about BASIC FSA Administration.
If you’re interested in exploring any of these options for your organization, request a no-cost proposal today!
