Two things happened in 1986. Run-D.M.C released their hit song, “It’s Tricky,” and COBRA became effective. Thirty-two years later, Run-D.M.C.’s music is still popular, and COBRA administration is still tricky—especially when it comes to Flexible Spending Account (FSAs). Add FSA carryover to the mix, and it gets even trickier.
Flexible Spending Accounts (FSAs) are one of the few benefits an employer can provide that often pays for itself (and then some). While there are expenses that will be incurred by the employer when using a third-party administrator for the FSA, there are also payroll tax savings that will offset some or all of those expenses.
To offer an FSA, or not to offer an FSA, that is the question. Let’s just cut right to the chase. Flexible Spending Accounts (FSAs) are a great way for employees to save on taxes for medical and dependent care expenses, but employers also receive financial benefits by offering an FSA.