Flexible Spending Accounts (FSA)

What is The CAFETERIA PLAN?

The CAFETERIA PLAN is an Employer Benefit Plan established under IRC Sec. 125 as defined in Internal Revenue Service. The program has been designed using various IRS Publications, Tax Codes and Congressional legislative intent to provide legal deductions for employers to offset the cost of providing fringe benefits for employees. For additional information on Strategic Business Services Flexible Spending Accounts go to www.maketherightmove.125admin.com.

What are the advantages of Section 125 FSA plan?

Section 125 plans offer advantages to both the employer and the employees. The medical expense reimbursements are tax deductible by the employer and the employer has flexibility in the design of the plan's provisions, such as establishing maximums amounts for reimbursement and setting eligibility requirements for participation. The biggest advantage to employees is that the plan's reimbursement payments are not considered to be taxable income to the employees, provided that they have not taken a medical expense deduction for these amounts on their personal tax return.

What are the requirements for Section FSA 125 plan?

The principal requirements to qualify under Section 125 are to adopt a written plan document, all participants must be employees, expenses to be reimbursed must not be subject to reimbursement under any health insurance policy, and the plan must meet the nondiscrimination requirements specified under the Code.

The Flex Convenience debit card enables employees to only pay for eligible expenses wherever MasterCard® is accepted – from physician and dental offices to pharmacies and vision service locations.

The employees have several choices for submitting qualified claims for the tax-free reimbursement:

  1. A MasterCard Debit Card is provided at no additional expense to the employee, allowing payment for normal out of pocket expenses based upon their enrollment plan to be paid in real time with the debit card. The qualified expense is tracked and reported via our online system, and credited against their account on a virtual paperless basis.
  2. If employees pay in cash, they may fax the receipt to Strategic Business Services for appropriate credit against the reimbursement account.
  3. Employees may deposit receipts in designated receptacles throughout the workplace to be forward to EmCentrix for processing.
  4. Employees may mail the Explanation of Benefits (EOB) and receipts to Strategic Business Services for appropriate credit against the reimbursement.
  5. Employees may check their account status by going to www.maketherightmove.125admin.com.