We make it easy to comply with living wage and wage parity pay regulations. Our industry leading, efficient, compliant, and comprehensive Wage Parity package is available to home health agencies and their employees in New York City and surrounding areas. We can help you provide Aides with stronger benefits that meets their needs, while reducing the payroll burden that comes with providing additional cash wages. A Clarity Limited Purpose Flexible Spending Account (LPFSA) is a smart, simple way to help employees further reduce taxes when coordinated with a Health Savings Account (HSA). An LPFSA can be held at the same time as an HSA and can further reduce taxes while allowing them to allocate HSA funds to other purposes – including retirement.
Calendar Year versus Plan Year — and why it matters for your benefits
Health Savings Accounts (HSAs) allow individuals who are covered by an HSA-compatible health plan, including HDHPs, to save money to pay for eligible medical expenses on a tax-free basis. Generally, as employees incur qualified dependent care expenses, they pay them out of pocket and then apply for reimbursement from the FSA. In some cases, participants may receive a spending account card, which works like a bank debit card and provides immediate reimbursement.
COBRA involves complex rules and regulations that are difficult to navigate. Let HealthEquity manage your COBRA program and ensure continuity of benefits for your employees. Easily manage direct billing additions, terminations, and activity reports through our convenient portal. Some material covers the offering of the ADP Pay-by-Pay Premium Payment Program. All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., its licensed agents or its licensed insurance partners. ADP’s Pay-by-Pay is a payroll enhancement feature of ADP’s payroll processing services.
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If you go this route, you’ll need a system and a set of rules for the paperwork. Depending on your organization’s compliance needs, you might consider allowing employees to claim expenses or use the benefit without requiring detailed proof to make the benefit more accessible. HRAs help reduce employer tax liability and help employees cover the rising costs of healthcare. We’ve streamlined the way your employees will pay for their commute to and from work. We’ll set them up with monthly savings and a variety of convenient options to pay for their ride.
This is a good option if you know you’ll have significant expenditures in these areas during the upcoming year. Once employees choose how much they will contribute for the year, they cannot change it unless they experience a qualifying event, such as a change in marital status, employment status or the number of dependents. FSA plan participants can carry over up to $660 from 2025 to 2026 (20% of the $3,300 FSA maximum contribution for 2025), if their employer’s plan allows it.
- Consult a legal or tax professional for advice on eligibility, tax treatment, and restrictions.
- Want to reduce the burden of complex HR administration beyond just benefits?
- We make it easy to comply with living wage and wage parity pay regulations.
- Your payment card is the most convenient way to pay for all the items that are covered by your account.
Become an employer of choice with innovative, yet simple, benefits administration
Claims for expenses incurred prior to the plan termination date must be submitted within the “run-out” period. Beginning January 1, 2025, health care FSA contributions are limited by the IRS to $3,300 each year (a $100 increase from the 2024 limit of $3,200). The limit is per person; each spouse in the household may contribute up to the limit. It’s a good practice to automatically enroll all eligible employees in the program and present them with initial information so they know what their LSA benefit is and how to use it.
What happens if I don’t use all my FSA funds by year-end?
You can check your account balance at any time by signing in to your account. If your employer’s plan design includes the online ordering model, you’ll enter your parking and transit orders online, and the cost of your orders will be automatically deducted from your paycheck on a pre-tax basis. Certain qualifying events allow employees to increase/decrease their election or begin/end participation in a plan.
- For health care, money can be used to pay for qualified medical expenses, such as prescriptions, eyeglasses, dental work and even acupuncture.
- A health savings account allows an individual to contribute amounts each calendar year to pay for qualified medical expenses.
- Also, some plans may allow you to continue spending your FSA dollars through a defined grace period or to carry over a portion of your remaining balance.
The Employee Retirement Income Security Act (ERISA) is a federal law that protects the interests of employees and their beneficiaries. ERISA establishes standards of conduct for most voluntarily established retirement and health plans and ensures that plan funds are protected and that qualifying participants receive their benefits. ERISA compliance can be complicated and potentially costly for employers. In fact, the IRS collects more than $2.5 billion in civil penalties each year.
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Please see your plan adp fsa documents or check with your Human Resources office for the specifics of your FSA Health Care Plan. The limit may be adjusted annually to account for inflation increases. Benefits coverage provided through the ADP TotalSource Health and Welfare Plan is based on a Plan Year (June 1 through May 31 of the following year). Think of a 12-month period of time and chances are it’s Jan. 1 to Dec. 31, known as Calendar Year.
Why Clarity benefit connect?
Expenses are fully customizable, but typically related to employees’ physical, emotional, and financial wellness. We manage almost all aspects of our lives from the palms of our hands. Our benefits and COBRA mobile apps were built with that in mind with a simple, and modern experience whether your employees are on mobile or online. Employers have the option to set a limit lower than the amounts listed, but not in excess. Any contributions to a dependent care FSA that exceed the imposed limit during a calendar year are treated as taxable income.
The maximum tax credit limit is $3,000 for employees with one qualifying person or $6,000 for employees with two or more qualifying persons. Working full time while there is a young child or an ill family member at home is a juggling act. Employees often become torn between their personal and career responsibilities.
Plus, you’ll have access to deep insights that can help you understand changing employee preferences and advanced technology to adapt accordingly. But for that to happen, benefits administration has to be easy and engaging, both for employees and HR practitioners. To encourage more participation, a few years ago, the IRS began allowing a grace period of up to 2 months and 15 days in which funds from the previous year could be spent in the following year. The money you spend on your work commuting expenses can be deducted from your paycheck pretax, within IRS limits. Sarah Geroulo joined FSA in 2005 and serves as Vice President of People, Talent, & Systems.