Through our partnership with Benefit Planning Consultants (BPC), ECI offers a comprehensive suite of services that help employees and employers save tax dollars, and to manage the challenges of COBRA.
ECI's web based software solution Empower seamlessly integrates with the services offered by BPC. With Empower and BPC, it is now possible for even small businesses to affordably provide employee benefits programs that are competitive with those offered by large corporations.
With our proprietary integration, employee withholdings are automatically communicated to BPC. In addition, employee information is efficiently communicated to BPC to ensure that all new enrollees and changes are being handled without duplication of work. This seamless process reduces manual intervention and improves quality control.
Premium Only Plans (POP)
POPs allow employees to have their health insurance premiums withheld from their paychecks on a pre-tax basis (before taxes are calculated). When employees do this, it reduces their taxable income, which in turn puts more money back into their pockets! In addition, employers reap the payroll tax savings on any election the employee makes because they don't have to match FICA and Medicare on the withheld amounts.
Flexible Spending Accounts (FSA)
FSAs are another popular way for an employee to save more tax dollars and for the employer to save the payroll tax on any election the employees make. FSAs are authorized by Section 125 of the Internal Revenue Code (IRC). They enable Employers and Employees to avoid taxation on certain eligible out-of-pocket medical expenses, such as deductibles, co-pays, coinsurance, vision, and dental care, prescriptions, and over-the-counter medications.
FSAs are funded by the participant via per-tax payroll deductions. The participant incurs an eligible out-of-pocket medical expense - defined under IRC 213(d) - then submits a claim for reimbursement. FSAs are usually part of a Cafeteria plan with a DCAP, or Dependent Care Assistance Program as a second component. DCAP covers day care, home care or preschool expenses for qualifying individuals such as children under 13 or a disabled spouse, child or parent who lives with you.
Health Reimbursement Arrangements (HRA)
HRAs are Defined Contribution health care programs, also called Defined Contribution (DC) health plans. HRAs are solely an employer-funded pan, and HRAs cannot be funded by Employee dollars. These plans became popular after the 2002 IRS guidance which essentially created the option we now know as an HRA. HRAs and consumer-driven health care have been adopted by numerous employers eager to control cost increases for group health care.
An HRA is a Group Health and Welfare Plan, subject to several legal requirements. A Plan Document is required and all eligible employees must receive a Summary Plan Description. HRAs are subject to the nondiscrimination rules of IRC 105(h).
Medical expenses reimbursed by an HRA must be substantiated. Having BPC administer your HRA makes this process easy. HRAs can be designed as a standalone benefit or may be coupled with a health plan. The employer can choose the amount to fund (no maximum), the qualified expenses covered and if the account balance will be carried over to the next year (carryover). Employers will find HRAs much more flexible than HSAs.
Health Savings Accounts (HSA)
HSAs link with a Qualifying High Deductible Health Plan (QHDHP) to save employers and employees money through lower premiums. HSAs are favored IRA-type trust accounts that "eligible individuals" covered by a qualified HDHP can establish to pay for certain out-of-pocket medical expenses. HSAs can be funded by the employer, employee, or other individuals, but only up to the statutory limit. BPC currently partners with several national providers. BPC can also integrate a HSA with a limited health FSA, bringing your maximum savings.
COBRA
Staying compliant with COBRA laws is a challenge for many employers. Your focus is on your business, not or IRS rules and regulations that change frequently. For employers that are subject to the rules and regulations set forth by the Federal COBRA legislation, BPC can provide the following services:
- General notice of COBRA rights to every employee that enrolls in benefits.
- Upon termination, COBRA Continuation Coverage Election form is sent.
- Receive and remit funds to participants.
- Administer COBRA compliance.
- Provide support services for clients and participants.
Managing COBRA administration, COBRA eligibility, and COBRA election rules and regulations can be time-consuming. Outsourcing COBRA administration makes sense and relieves your compliance headache. ECI's comprehensive COBRA administration, eligibility, and election process alleviates those concerns giving you a greater peace of mind.
Transportation Plans
Transportation plans are another way to gain tax savings. IRC 132 allows for employers to offer employees the opportunity to set aside a portion of their salaries to pay for certain employment-related transportation expenses. Similar to FSAs, the employee will not be taxed on the amounts that are set aside and sued for qualified transportation expenses. Qualified transportation expenses generally include payments for parking fees and for the use of mass transportation. Unlike FSAs, there is no "use it or lose it" penalty.