Providing a Flexible Spending Account (FSA) plan to your staff allows them to set aside pre-tax funds to pay for eligible health expenses. For many employees, this is a valued benefit. However, regulations have been set in place that prohibit the FSA plan from being skewed in favor of highly compensated employees. It is the employer’s responsibility to be conscious of the fairness of FSA plan eligibility and be prepared to provide evidence to the IRS that the plan is equally beneficial to all eligible employees, if requested. This is accomplished by performing Non-Discrimination Testing.
Keeping track of the non-discriminatory status of your FSA plan can be difficult, but the consequences of being non-compliant are costly. Call on BAS to guide you through the testing efficiently and accurately. BAS offers Non-Discrimination Testing as an add-on to your FSA benefits administration suite of services.
The process is straightforward: the BAS team will provide a questionnaire about your company and its FSA plans, and request demographic and salary data for your entire employee workforce. After running the tests, our team will provide a detailed report summarizing the status of your FSA plan. FSA non-discrimination testing should be performed at least annually and is typically completed early enough in the plan year so that if issues arise, contribution adjustments can be made so your plan retains compliance.
Contact your Account Manager to learn more about BAS’ thorough and effective Non-Discrimination Testing or email solutions@BASusa.com.