If you have a small company, it can be hard to attract top talent. Not only is your business name relatively unknown among applicants, but you also might not have the buying power that major corporations do when it comes to matching salary demands. That’s why it’s important to emphasize the other benefits your company can offer. If your business is required to offer health insurance to your employees, one of the best tools at your disposal is an FSA.
What is an FSA?
An FSA, or Flexible Spending Account, is an account that augments health insurance plans. Employees can set aside a fixed amount of money every month or paycheck. It’s a tax-advantaged account, which saves them money on income taxes, and the money can only be used on approved medical purchases as allowed by the IRS. This helps offset medical costs that your employees have to pay out-of-pocket.
How can you help employees get the most out of FSAs?
High-quality HR administration is one of the best ways to have employees stay with you even when they could get a bigger paycheck somewhere else. FSA funds run out at the end of every calendar year; if your employees don’t spend every dollar in the account, the leftover money is lost to them. So set up reminders in the last quarter of the year so employees remember to use the money. Make a concerted effort to make using the funds easy and give flexible scheduling so employees can go to the doctor or dentist.
How do FSAs also benefit your business?
Those unused funds are left in the employer’s hands to use. You can disperse the money back to the employees, though you can’t directly return individual pools of money to participants. You can also use those funds to help offset the costs of administering health insurance. Benefits are a major company expense, so creating policies that help both your employees and your company in terms of overall health and low spending should be a priority. Go to Tangram for more workplace health ideas and tips.