Is a Flex Plan right for you?
The most important factor in determining if a Flex Plan is viable is the total dollar amount of qualified expenses employees choose to run through the Plan. Size of employer is immaterial as it is quite possible to have a small number of employees annually contribute a significant amount of money. To determine if a Flex Plan is for you, you first need to understand Flex economics.
What do Flex Plans cost? Flex Economics 101:
Contributions save payroll taxes and therefore reduce plan costs. You want the administrator that gets the most contributions.
The reason you want employees to contribute is basic economics. An employer does not match Social Security, Medicare or pay Workers Compensation premiums (in Ohio) on contributions made by employees to a Flex plan. So … the more your employees like participating in the plan … the more money they will contribute … the more payroll taxes you, the employer, save … the less the net fee to administer the plan becomes. If administered well, payroll tax savings can actually exceed fees and you make money just for offering the plan.
The following chart illustrates the difference between a Plan that costs the employer and one that makes money for the company. The difference is all in the amount contributed to the Plan.
|Frequency of Claims Payment||Daily||1/2/4 Per Mo.|
|Avg. Employee Participation||38%||15%|
|Number of Participants||38||15|
|Avg. Annual Contribution Per Participant||$1,133||$ 940|
|Collective Annual Contributions||$43,054||$14,100|
|Employer Payroll Tax Savings @ 8%||$3,444||$1,128|
|Approximate Annual Administration Fee||$2,736||$1,260|
|Net Gain (Cost) To Employer||$708||$(132)|
|Employee Income Taxes Saved @ 25%||$14,351||$4,700|
Pre-Determining Employee Interest
An employer should never attempt to pre-determine employee interest. Understanding the concept of a Flex Plan is entirely different than effectively explaining it. FlexBank has spent years learning how to effectively teach employees how to use a Flex Account. It should not cost you a thing to let an administrator test employee interest for you. Any administrator should conduct a cost free employee meeting to determine interest in Flex.
FlexBank, Inc. is a full service Flex administrator that has been administering Flex Plans since 1985. FlexBank’s client list includes companies employing as few as 2 employees and as many as 20,000 with locations all over the United States.
The right answer to every question . . . . . . . . . . . .
Our employee brochures are user friendly.
Our educational presentation is effective.
FlexBank pays claims every day.
Walk-ins are welcome at FlexBank.
Claims are reviewed immediately upon receipt.
FlexBank is a full service Flex administrator.
FlexBank has created a Flex brochure that is easy to read and understand. It explains simply what tax free means. It explains IRS rules when using a Flex Plan Account and how to get the most benefit from the Plan.
Every tax break the IRS gives us has “Rules”. Nobody likes Rules but we need to know how to manage them to enjoy the benefits of a tax free Flex Plan Account. FlexBank has spent years developing a proven three-step presentation that carefully teaches employees the Rules and how to live with them.
Employees need their money NOW, not next week or next month! That’s why FlexBank pays claims every day. It’s the single most important factor in obtaining maximum employee contributions.
We are unique in our industry for encouraging your employees to walk into our office and make an on-the-spot withdrawal.
We review claims every day because we pay claims every day.
Our list of services is complete. In addition to basic record keeping, claims review and issuing reimbursements, our services include employee brochures, educational meetings, model plans in writing and discrimination testing. We provide everything you need.