News Release

Tax-Free ‘Flex’ Accounts Help Workers Spend Less on Health Care Premiums

December 20, 2004

News of rate increases from Excellus BlueCross BlueShield, Rochester Region, may be bad news for local residents. But there’s good news from benefits administrator Resource Benefit, Inc. Money-saving news!

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“Employees can actually cut their health care premiums, increase their take-home pay and maintain quality medical care by making wise use of tax-free flexible spending accounts,” says Tony DiBarnaba, president, Benefit Resource, Inc. Benefit Resource, based in Brighton, is a nationally recognized leader in the administration of tax-free benefit accounts.

Many consumers use flexible spending accounts, often called flex accounts, to pay for health care with pre-tax dollars, saving 30 to 40 percent on out-of-pocket expenses for doctor’s visits, prescriptions and more. Now, in the face of rising health care premiums, consumers can also leverage their flex accounts to lower their medical premiums.

“Instead of choosing the same health plan they’ve always chosen, employees should take a second look at plans that may offer a slightly lower level of coverage, thus lowering their monthly premiums,” says Tom Guiler, vice president, Benefit Resource. “Less-expensive plans may not cover all the services covered by the more expensive plans and they may require higher co-pays, but employees can pay for these additional services and higher co-pays using tax-free dollars from their flex accounts – and still see savings.

“A typical family choosing between two popular health care plans in the Rochester region may save $1,800 a year in premiums by choosing the less-expensive plan. If they put half of that savings – $900 – into a flexible spending account, they’ll pocket an extra $900 for the year. If they pay health care premiums through a payroll deduction plan, they can increase their take-home pay by nearly $40 every two weeks.”

Employees need to review policies carefully, Guiler adds. The less-expensive plan may require higher co-pays – perhaps $20 or $25 per visit for health services and hospital visits, compared to $15 per visit required by more expensive plans. And the cheaper plans may not cover some services such as substance abuse treatments. But employees can pay for the higher co-pays and uncovered services by using funds from their tax-free flexible spending accounts, which further reduce the out-of-pocket costs of those services by 30 percent to 40 percent. “It’s a double savings,” Guiler says.

For employees who don’t like paperwork, there’s the FLEX Card.

It works like a debit card, automatically reducing a flex account balance as an employee uses the card to pay for health services – no vouchers, no reimbursement forms, no cash.

“The approach puts more money in the hands of employees and broadens their choice in health care services,” DiBarnaba says. “And the FLEX card eliminates the paperwork.”

Employees can find out more about tax-free flexible spending accounts for health care by visiting the Benefit Resource web site at www.BenefitResource.com.

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Benefit Resource, Inc. (www.BenefitResource.com) administers pre-tax employee benefit plans for more than 100,000 employees and 1,000 employers in Upstate New York, New York City, Boston, Chicago, Philadelphia and Washington, D.C. Unlike payroll or human resource companies, Benefit Resource focuses solely on administration of tax-free benefits. When there’s a question about pre-tax benefits – for health care, dependent care or transportation, Benefit Resource is the expert.