Glossary of Terms
Flexible Benefit Plan (Flex Plan or Cafeteria Plan) – Allows employee salary reduction options under IRS Code Section 125
Premium-Only-Plan (POP) - Allows pre-tax salary reduction for the employee’s share of group insurance premiums for health, dental, supplemental health and vision plans. Individual health premium reimbursement is allowed under Flexible Benefit Plan regulations, however, concerns regarding ERISA, HIPAA and state regulations apply.
Spending Accounts – Allows pre-tax dollars to be set aside through salary reduction for two options:
- Child/Dependent Care Expenses Necessary to Employment (up to $5,000 per year)
- Out-of-Pocket Medical, Dental and Vision Expenses for the entire family These dollars can then be claimed tax-free once eligible expenses have been incurred.
Health Reimbursement Arrangement (HRA) – An Employer-Sponsored Health Plan offered under IRS Code Section 105(h) which allows an employer to pay for health care expenses for the employee and or family as a tax-free company paid benefit; i.e. a portion of the insurance deductible, dental expenses, vision expenses and/or any out-of-pocket health care expense as defined by the Employer in the HRA document.
Health Savings Account (HSA) – An individual Health Savings Account which allows individuals who own a qualifying High Deductible Health Insurance Plan to set aside tax-free dollars into an HSA Trust Account. Dollars in the account are then used tax-free to pay for out-of-pocket medical, dental and vision expenses for the entire family (spouse and tax dependents). HSA Trust Account contributions can also be made through pre-tax salary reduction under a Flexible Benefit Plan.
Third-Party Administration Services (TPA) – This service allows an employer to out-source the administration of the Flexible Benefit Plan or Health Reimbursement Arrangement for claims review and claims payment.. FlexMagic Consulting, Inc. will be the recipient of all claims for reimbursement from the Spending Accounts and / or HRA Plan to ensure confidentiality and accuracy of claims review. Debit Card option are available.
Debit Card - A Debit Card is like a credit card with a limit established by the employee’s election in the Dependent Care or Health Care Spending Account of the Flexible Benefit Plan. The debit card can be used to pay for certain items without any claims adjudication requirement. This is a real convenience to Plan participants. Debit cards can also be used with certain HRA Plan Designs.