Pre-tax benefits are growing in popularity amongst employers and employees alike. This is because they offer a great way to save on taxes while still being able to use funds for medical, dependent care, and other expenses. In the last year alone, we’ve learned a lot about pre-tax benefits and how to maximize their potential. Let’s look back at some of the important things we’ve learned about pre-tax benefits in 2022.
HOW TO AVOID PENALTIES ON AN HSA WITHDRAWAL
An HSA (Health Savings Account) is a great way to save up money tax-free for future medical expenses. However, it is important to be mindful of the penalties associated with ineligible withdrawals or those under the age of 65. Taking a withdrawal before age 65 comes with a 20% penalty tax without an exemption, meaning that 20% of the withdrawn amount is taxed as income. It’s also essential to ensure that any HSA withdrawals are used towards eligible expenses to avoid additional tax penalties. After reaching 65 years of age you can withdraw from your HSA without incurring one-time or recurring taxes; however, if you plan on using the funds for non-medical expenses, it’s important to note that those funds will still be taxed as income.
DIFFERENT WAYS TO SPEND DEPENDENT CARE FUNDS
Dependent Care often presents a unique challenge for busy families. From day camps to home care, Dependent Care funds offer an answer to this problem that can often outweigh the time and cost associated with the traditional solutions. Dependent Care funds can be used to pay for registration fees, membership in before and after school programs, as well as funding of day camps so on hectic days you don’t have to worry about looking for alternate sources of childcare. Dependent Care provides more than just convenience; it offers peace of mind when parents and guardians need it most.
Submitting claims and receipts and checking balances
When it comes to accessing the funds in your pre-tax benefit plan, the primary concern for most participants is “how difficult is this going to be?” Whether you are submitting a claim through the BRIMOBILE app or by using the BRIWEB secure participant portal, the process is very simple and easy to follow.
If you’ve ever wondered “What is substantiation and why is it required?” you’re not alone. But knowing is only half the battle – you still need to submit your documentation. Thankfully, BRI has a process that is very simple and easy to follow. Let’s take a look at the steps required to submit a receipt.
CHECKING A BALANCE
As the year comes to a close many are evaluating their financial state and are preparing for open enrollment. Checking a year-end balance is part of the preparation. Everyone can easily check their balance on either BRIMOBILE or BRIWEB. Take a quick walk through the process of checking an account balance.
Choosing between an FSA and an HSA
Choosing between a Health Savings Account (HSA) and a Flexible Spending Account (FSA) can be overwhelming. Both accounts have their own unique features and benefits, but understanding when each is most appropriate can help simplify the choice. HSAs are available to only certain high-deductible health plan participants while FSAs offer funds that stay with you through life’s milestones so that you’ll always have extra coverage if needed. It is important to weigh the pros and cons of both types of accounts before deciding between an FSA and an HSA.
To learn more about FSAs and HSAs, view our account comparison chart.
Surprising Ways to Use Medical FSA Funds
Flexible Spending Accounts, or FSAs for short, are widely known as a great way to save up and use pre-tax funds for medical expenses. However, their use isn’t just limited to doctor’s appointments or medication – they can be used in more inventive ways. Many people forget that certain FSA Funds can be used for items such as contact lens solutions, first aid supplies, and even sunscreen and sunburn relief creams! Learn more about the surprising ways to use FSA Funds for medical purposes.
The Importance of Customized Benefits
Attracting and retaining reliable, talented employees is key for businesses to succeed. Specialty Accounts offer a lifestyle-focused approach to employee benefits that will help set your company apart from the competition. These accounts provide a customizable solution to physical, mental, social, and career needs through one comprehensive package. Setting up benefit programs like these empowers individuals and causes them to feel appreciated, while also diversifying the support they receive on both a personal and professional level.
Stay Up to Date with Pre-Tax Benefits
In the last year, we’ve learned a lot about pre-tax benefits and how to make the most of them. Pre-tax benefits are a great way for employers to save on taxes while still being able to offer employees funds for medical, dependent care, and other expenses. We’ve also learned that it’s important to review pre-tax benefit plans regularly to ensure they meet your needs. If you’re interested in learning more about pre-tax benefits or want to find out how you can maximize their potential, visit our blog page. We regularly write articles on this topic and would be happy to help you learn more about how pre-tax benefits can save you money.