The Cafeteria Flex Plan
Benefits are available from day one to use when needed most.
A Cafeteria Plan, or Flexible Spending Account (FSA), is an employer sponsored healthcare benefit similar to a savings account in it allows employees to set aside a certain amount of gross income to save and pay for out-of-pocket healthcare and other expenses during the year.
FSAs Increase Net Pay & Cover Healthcare
There is an approximate savings of between 22% and 42% of every dollar an employee contributes to an FSA plan. In this case, an extra $1,200 in annual take home pay!
Here is an example of how an employee can save by participating in an FSA:
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Without FSA
Employees gross annual pay | $36,000 |
Estimated taxes | -$9,000 |
Employee’s net annual pay | $27,000 |
Annual healthcare expenses | -$4,800 |
Final take-home pay | $22,200 |
Employees gross annual pay | $36,000 |
Estimated taxes | -$9,000 |
Employee’s net annual pay | $27,000 |
Annual healthcare expenses | -$4,800 |
Final take-home pay | $22,200 |
There is an approximate savings of between 22% and 42% of every dollar an employee contributes to an FSA plan. In this case, an extra $1,200 in annual take home pay!
With FSA
Employees gross annual pay | $36,000 |
Annual healthcare expenses | -$4,800 |
Adjusted gross pay | $31,200 |
Estimated taxes | -$7,800 |
Final take-home pay | $23,400 |
Employees gross annual pay | $36,000 |
Annual healthcare expenses | -$4,800 |
Adjusted gross pay | $31,200 |
Estimated taxes | -$7,800 |
Final take-home pay | $23,400 |
The FSA "Cash Flow" Advantage
Under IRS plan guidelines, the entire annual FSA contribution is available on day one, no matter how much money employees have actually contributed to the plan at any given point. In other words, any major medical expense* at the beginning of the claim period can be reimbursed even though few, if any, deposits have been made into the account at that time. Those with specific conditions or illnesses, or a growing family can greatly benefit from this additional FSA benefit!
*This applies to the medical portion of the FSA only; other eligible expenses such as dependent care benefits are not eligible under uniform coverage rules.
FSA FAQs
A Great Benefit That Practically Pays For Itself!
Employees save big with an FSA which is why they are considered a staple benefit, yet employers also save as well. Because contributions to the FSA are not subject to any payroll taxes, even those paid by the employer, the savings almost always pays the total cost of having a first-class third party administrator, like TPA Systems Inc., manage a comprehensive cafeteria plan that features everything imaginable.
FSA FAQs
Subject to employer plan design, these funds can be used for medical or other expenses not covered by insurance, dependent care, and a host of other allowable items. The specific expenses deemed reimbursable are stated within Section 213(d) of the Internal Revenue Code. Click here for an exhaustive list.
If the employer wants to reimburse expenses on a first-dollar basis, TPAs can provide covered individuals with a pre-programmed, "smart" debit card. These debit cards will only permit the covered person to apply available benefits to expenses approved by the employer. Reimbursements can also be administered after the fact upon request and according to almost any reimbursement schedule that the employer can design.
The various expenses that can be reimbursed with an FSA may have annual limits imposed either by the employer in its plan design or federal regulations. For 2024, federal guidelines allow a maximum amount of $3,200 that can be contributed to and reimbursed from an FSA. This amount includes both employer and employee contributions.
Some employers subject their employees to what is known as the "use it or lose it" rule. This means that whatever an employee elects to set aside into his FSA during his plan year must be either spent on the items elected by the employee or forfeited altogether. However, many employers design their plans to allow for some of an employee's unused funds to be rolled over to the succeeding benefit period, or to allow a grace period for employees to spend unused funds during the succeeding benefit period. TPA Systems has the ability to administer any of these cafeteria plan design options.
Most full-time employees are eligible to participate in an FSA if their employer offers health insurance, however they do not need to be enrolled in the health plan to sign up for an FSA. Employees who already have a health savings account (HSA) should not enroll in a health care FSA. They may still enroll in a dependent care FSA.
TESTIMONIALS
What Our Clients Say
Exceeds Expectations
Exceptional service! We have used TPA Systems for years and they continue exceeding our expectations for customer service, timeliness, and creative solutions for our employee benefits. Our law firm wanted to cut costs and Stacey showed us HRA, HSA and LFSA solutions which reduce benefits costs for the law firm and maximize tax savings for the firm and our employees.
Makes Life Easier
The way an employer knows whether its HRA/FSA administrator is doing its job is that you never hear any complaints from your employees. TPA Systems shines in this regard. TPA Systems, you have been a pleasure to work with over the past few years. You make my life easier!
Works Flawlessly
For the better part of 15 years, Third Party Administrators Systems (TPA Systems) has provided Bay City Gas with professional services related to administering both our group health insurance plan and our Health Reimbursement Account (HRA). The HRA plan has worked flawlessly, both on the users’ side and on the administrative side. We highly recommend TPA Systems for any entity in need of these services.
Knows What They Are Doing
Stacey Merritt and his staff are the best to work with. Very efficient! The reimbursements are always within 7 days of receiving the request. Stacey is very quick to respond to any questions I might have. They always give you the option to do your own reports or they will do them. I personally let them do my state reports. Stacey and his team know what they are doing!!!! I will continue to use this company for as long as our city offers this program to its employees.
Stood the Test of Time
Our law firm has had many carriers and vendors providing and administering employee benefits over the years, but the one company we do business with that has stood the test of time is TPA Systems Inc. Since we first installed our cafeteria plan many years ago, TPAS has provided excellent, prompt service to both our staff at the administration level and our employees at the consumer level. We highly recommend TPAS.
Prefers Us To Other TPAs
Our firm has used TPA Systems, Inc. for our H.R.A./H.S.A. benefit administration for fifteen years and has yet to receive a negative comment from any of our clients. When preparing a presentation, TPA Systems’ attention to detail is impeccable and professionalism is unquestioned. The latter is displayed during employee enrollment meetings which involve audience participation. For these reasons I do not entertain solicitations from other third-party administrators.
Highly Recommends Us
I have been working with Stacey Merritt and TPA Systems, Inc. over the past 9 years offering HRA, HSA, POP Plan, and Flexible Spending Accounts to my employee benefit customers in Houston, Texas. My customers and I have been extremely pleased with their highly professional and prompt service and would highly recommend Stacey and TPA Systems, Inc. to both benefits professionals and employers.
We Are A Beacon of Light
As an insurance broker, I am constantly tasked with finding a solution to the ever-increasing cost of health insurance and higher deductibles for employees. Stacey Merritt of TPA Systems has been a beacon of light for me, and his service, knowledge and expertise has helped my employer groups keep a consistent plan while containing cost. TPA Systems delivers HRA, HSA, FSA, and COBRA administration with ease, affordability, and excellent turnaround time. Of all the arrows in my quiver, TPA Systems may be one of the sharpest.
A Great Experience
I have known Stacey Merritt for over 35 years and have been doing business with his firm for 14+. His knowledge of the third party administration business is top-notch. My experience with TPA Systems Inc. has been nothing short of great! I would highly urge you to consider TPA Systems for any and all things pertaining to HRA, HSA, FSA, and plan documents!
Appreciates Accuracy, Quick Response and Help Getting Business
Again, this renewal season it was consistent customer feedback on the service from and ease of doing business with TPA Systems. As the broker I appreciate the accuracy and quick response to questions. Thank you for helping us get new sales and keep business.
Excels in Designing and Implementing Cost Saving Plans
I have worked with Stacey Merritt at TPA Systems for many years. Stacey has always offered the highest level of customer care, but where he truly excels is in designing and implementing plans that stretch my clients’ benefit budget while keeping employees satisfied. Many of my clients have utilized TPA Systems plans for years. I’ve simply never had a client ask for another administrator.
A True Asset
Stacey has built a very successful TPA because of his passion to help brokers, advisors, and employer groups. I haven’t met a more knowledgeable person regarding HSA, HRA, and FSA compliance and execution. Stacey is a true asset to my clients, and I’m always looking for more opportunities to work with him.
