by admin | May 2, 2022 | Blog
The IRS has released an information letter responding to an inquiry from a qualified transportation plan participant whose employer decided to let him work from home permanently due to the COVID-19 pandemic. To avoid losing compensation reduction amounts he had previously set aside for parking, the participant asked whether his unused compensation reductions could be transferred to a health FSA under a cafeteria plan.
The letter explains that unused compensation reduction amounts under an employer’s qualified transportation plan can be carried over to subsequent periods under the plan and used for future commuting expenses, so long as the employee does not receive benefits that exceed the maximum excludable amount in any month. But cash refunds are not permitted, even to employees whose compensation reduction amounts exceed their need for qualified transportation fringe benefits. Furthermore, the Code prohibits cafeteria plans from offering qualified transportation fringe benefits, and IRS rules do not permit unused compensation reduction amounts under a qualified transportation plan to be transferred to a health FSA under a cafeteria plan. The letter also notes that COVID-19-related relief for FSAs gives employers the discretion to amend their cafeteria plans to permit midyear health FSA election changes for plan years ending in 2021.
EBIA Comment: The qualified transportation rules have proven sufficiently flexible to handle most situations resulting from the COVID-19 emergency. Most employers permit benefit election changes at least monthly, and plans can allow current participants to carry over unused balances indefinitely. Compensation reductions set aside for one qualified transportation benefit (e.g., parking) can even be used for a different transportation benefit (e.g., transit) if the plan permits and the maximum monthly benefit is not exceeded. But—as this participant’s request to transfer parking compensation reductions to a health FSA suggests—those options are not always sufficient. Because some risk of loss due to changing circumstances is unavoidable, employers should clearly articulate that risk to employees before they make compensation reduction elections.
Source: Thomson Reuters
by admin | May 2, 2022 | Blog
As you may know, anyone who has a flexible spending account (FSA), can use their contributions to cover doctor visits (preventative, primary care, and specialists) and prescriptions. However, what you might not know is that any saved FSA dollars can also cover these commonly used products and services.
- Dental services: including orthodontics
- Vision products and services: including corrective procedures such as LASIK
- Therapeutic services: including physical therapy & chiropractic care
- Diagnostic procedures: including labs, scans, imaging
- Mental health services: including psychiatric care, therapy & counseling
- Medical supplies: including bandages, crutches, wheelchairs
- Over-the-Counter Medications: such as Tylenol, Advil, Zyrtec
- Fertility treatments: such as IVF, or birth control products
- Baby care items: such as breast pumps & supplies
- Long term care: including nursing services
To learn even more about FSA eligible items, check out our extensive list.
by admin | Apr 25, 2022 | Blog
The Kansas Targeted Employment Act is enacted to incentivize employers to employ people with developmental disabilities in Kansas. For tax years 2022 through 2027, there will be a credit allowed against income, privilege, or premium tax liabilities imposed upon a taxpayer that qualifies as a targeted employment business or taxpayer outsourcing work to a targeted employment business for every hour that an eligible individual is employed in a calendar year in a targeted employment business and receives earned income as compensation. The credit only applies to wages for hours worked and not for any compensation for paid leave and is equal to 50% of the wages paid to the eligible individual on an hourly basis, up to a maximum credit of $7.50 per hour.
The credit is non-refundable, cannot be carried forward, and can only be used once each taxable year against tax liability imposed by only one of the income, privilege, or premium taxes. The maximum of all credits allowed each year will be $5 million. “Earned income” means compensation paid to a Kansas employee for competitive integrated employment that is equal to or greater than the minimum wage and is performed in a competitive integrated setting. “Targeted employment business” means those employers employing eligible individuals in competitive integrated employment in a competitive integrated setting and who are authorized to do business in Kansas. “Targeted employment business” does not include a community service provider. These provisions expire on January 1, 2028, except those credits earned in tax year 2027 may be awarded by the Secretary of Revenue.
Source: Thomson Reuters
by admin | Apr 14, 2022 | Blog
Spouse Saver helps cover up to 100 percent of out-of-pocket expenses like copays, coinsurance, and deductibles during doctor and hospital visits incurred by an employee’s spouse.
This cost-saving resource is possible once an employee enrolls in their employer’s group health insurance plan. Instead of adding their spouse to the plan, the spouse can take advantage of their employer’s group health insurance plan. Once enrolled in the plan, the spouse provides proof of coverage to the employee. Once verified, the employee’s company sets up an account for the spouse to use for their in-network, out-of-pocket expenses. To learn more about Spouse Saver and review other useful information, check here.
by admin | Apr 14, 2022 | Blog
The calendar has flipped to April, and consumers have already saved up to $100 billion using Health Savings Accounts (HSA) this year, per Devenir, an HSA investment consultant. As these numbers continue to soar, the time to invest in an HSA is now. Here are three, brief advantages of doing so:
- Can reduce insurance premiums by combining an HSA with a qualified High Deductible Health Plan (HDHP)
- The HSA’s unused funds roll over annually, meaning they can be used for future expenses
- Contributions are made tax-free, grow tax-free, and can be withdrawn tax-free to pay for qualified medical expenses
It’s never too late to invest in an HSA and join the thousands of participants already reaping the benefits.
