Flexible Spending Accounts

KM | July 5, 2008

Q: Where can I obtain a flexible spending reimbursement form on-line?

A: Our parent company Freedom Benefits was a leading provider of low cost Flexible Spending Accounts (FSA), Health Reimbursement Arrangements (HRA) and Section 125 Cafeteria Benefit Plans for small businesses. (HRA plans became much more popular and largely replaced FSAs in many employer plans since 2005 because of recent favorable tax rulings). Freedom Benefits provided prototype plan documents, online claim processing and compliance support for Department of Labor, IRS and HIPAA rules. When Freedom Benefits went out of operation in 2007, there was no comparable low cost provider that we could refer. Other employee benefit services are available through larger firms, but the minimal start-up costs (usually more than $500) are more than many small firms want to pay for this service. To the best of our knowledge, no firm has stepped up to fill the gap in this service for small businesses that want to offer a fully compliant non-insured health plans at minimal expense.

The best immediate suggestion we can offer is to use a Health Savings Account instead. The forms and administration are free or offered at minimal charge from several large reputable providers. The major downside is that the required companion insurance choices are limited.

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