Flexible Benefits

Would you like to help your employees cut their medical bills and dependent care costs by up to 40 percent? Flexible Spending Accounts (FSA) can do just that and more. They can save you, the employer, tax dollars too. You save matching FICA contributions for every dollar deducted pre-tax.

NISI offers two FSAs to help you meet your employees’ specific needs.

  • A Medical Spending Account pays for medical expenses not covered by insurance.

  • A Dependent Care Account pays for dependent care for children and/or a disabled dependent.

The plan works like a personal expense account. Employees set aside a portion of their salary before taxes. The money is used to pay certain dependent care and medical expenses not covered by insurance, including prescription drugs and many over-the-counter medicines.

Since the money is set aside pre-tax, your employees save on federal, state, Social Security and Medicare taxes, and keep a lot more of their take-home pay. FSAs are a great way to help your employees save for big expenses that typically occur throughout the year.

Depending on your employees’ needs, they decide how much they want to contribute to each account. We’ll provide them with a simple worksheet to help them budget wisely.

Flexible Benefits Brochure

Health Savings Accounts

Health Savings Accounts (HSAs) can help employers control the rising cost of health care for employees. HSAs work hand-in-hand with high deductible health plans (HDHP) to lower your premium costs for employee health coverage.

Your contributions to an HSA are excluded from taxable income, and employment taxes do not apply, saving you matching Social Security and Medicare taxes. Contributions can be made through a cafeteria plan on a pre-tax basis.

HSA can help employees cut income taxes, grow savings tax-free and lower their health insurance premiums. HSAs are individually owned health reimbursement accounts that allow untaxed dollars to fund the account.

Simply put, an HSA works like an IRA. Employees invest money tax-free and it grows tax-free until it is used for health insurance costs and medical expenses. HSA money is tax-free if used for qualified medical expenses, including over-the-counter drugs, dental care and vision care, among others. When employees reach age 65, they can withdraw money without penalty and use it as they would like. If funds are used for non-medical purposes after age 65, funds will count as taxable income.

With an HSA, employees (account holders) can make tax-free withdrawals from the HSA for insurance premiums for Medicare (except Medicare Supplement policies), long-term care coverage, health coverage while receiving unemployment benefits or health care continuation coverage required by federal law (known as COBRA coverage).

The HSA is owned by the employee and not the employer, and accounts are completely portable regardless of employment status.

To open an HSA, an employee must be covered by an HDHP. The HDHP must satisfy minimum deductible amounts with certain out-of-pocket maximums. Employees with HSAs may not be covered by any other insurance plan that is not an HDHP or that covers benefits provided by the HDHP or below the deductible of the HDHP. There are exceptions for “permitted insurance” or “permitted coverage” products.

The money invested in HSAs rolls over year after year, so later in life it can be used for medical expenses after retirement, out-of-pocket expenses for Medicare and long-term care expenses.

An HSA is required to be set up with a qualified custodian or trustee. Discovery Benefits is the custodian of choice for NISI for HSAs.

Health Savings Accounts Brochure