Employer Strategies and Solutions to Substantially Reduce:
- The high cost of Health Insurance;
- The cost for Out-of-Pocket Medical Expenses;
- The cost for Dependent Day Care Expenses;
- The cost for Parking and Transit Expenses;
- Cost of Self-Employed Healthcare Expenses;
- Employer Matching Payroll Taxes by 8%;
- Employee Income Taxes by 30%.
FSAs give employees the ability to avoid paying taxes on certain qualified expenses. Section 125 allows for two categories of expenses to fall under this exemption: Out-of-pocket healthcare expenses and dependent child/elder daycare expenses.
In a healthcare FSA, the employee is permitted to put a percentage of his/her salary into the FSA on a pre-tax basis. When healthcare costs arise, the employee pays them and then submits a receipt to the FSA administrator for reimbursement.
Dependent day care FSAs are similar to the healthcare FSAs except for the obvious difference that the qualified expenses must be related to daycare costs for children and/or elderly dependents.