Tax-favored Accounts: FSAs, HRAs and HSAs

Section 125 Administration

Flex Spending Accounts (FSAs)

Flex Spending Accounts, established by the Revenue Act of 1978, remain one of the most valuable methods of avoiding taxation for qualified medical and dependent-care expenses. Tax consequences for both employer and employee are significant.

EBMS has been an innovator and leader in Flex administration for more than 20 years. We offer an “auto-flex” option for groups electing EBMS administration of their benefit plan. This gives participants the option to elect to have their noncovered reimbursable expenses “roll” through their flex account at the time of claim adjudication.

EBMS offers a number of check issuance and banking and claim funding options for participants. Flex reimbursements are made three times each week to ensure a quick return to the participant.

To assist in the administration of the Flex plan, EBMS provides clients with expertise in legal and tax compliance issues related to Flex plans. This includes nondiscrimination rules and-information that may be required each year by the IRS and the Department of Labor regarding the Plan.

Health Reimbursement Arrangements (HRAs)

We have been administering multiple choice, defined contribution plans for more than 20 years and in January of 2005, we began administering Health Reimbursement Arrangements (HRAs).

The HRA—and our other tax-favored vehicles—can compliment our well-designed, carefully administered Consumer Driven Health Plans (CDHP). EBMS experts will help educate and empower our members to become better consumers of healthcare, with the goal of controlling their health plan costs. This assistance will ultimately result in savings for individual members, as well as the Plan.

Health Savings Accounts (HSAs)

Beginning in January 2005, EBMS partnered with First Interstate Bank to offer a Health Savings Account product. This tax-favored account can be used to save money for future medical expenses for you, your spouse and your qualified tax dependents.

Features include:

•    Complete High Deductible Health Plan (HDHP) administration

•    Multiple investment options, including ability to change investment election on quarterly basis

•    Account summary provided quarterly (contributions, disbursements and investment analysis)

•    Detailed account statement provided with each disbursement

•    Web access to account balances

•    Access to WorldDoc