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Glossary of Terms
Flexible Benefit Plan
(Flex Plan or Cafeteria Plan) – Allows 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.
Spending Accounts –
Allows pre-tax dollars to be set aside through salary reduction
for two options:
1) Child/Dependent Care Expenses Necessary to Employment (up to
$5,000 per year)
2) 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
purchase 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. HSA Trust Account contributions can
also be made through pre-tax salary reduction under an Employer’s
Flexible Benefit Plan.
Third Party Administration Services (TPA)
– This service allows you to out-source the administration
of your Flexible Benefit Plan or Health Reimbursement Arrangement
claims review. FlexMagic Consulting, Inc. will be the recipient
of all claims for reimbursement from the Spending Accounts and /
or HRA Plans to ensure confidentiality and accuracy of claims review.
Debit Card option available.
Debit Card -
A Debit Card is like a credit card with a limit established by the
employee’s election in the Child/Dependent Care or Health Care
Spending Accounts. The Card can be used to pay for certain items
without any claims adjudication requirement. This is a real convenience
to Plan participants.
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