BENEFLEX INC.

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BENEFLEX INC.

• Leading the way in FSAs

flexible spending accounts made simple
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THERE ARE TWO TYPES OF FLEXIBLE SPENDING ACCOUNTS

• Dependent care flexible spending accounts
• Medical flexible spending accounts

BOTH TYPES SAVE THE EMPLOYEE AND THE EMPLOYER
MONEY!
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THE BASICS
A Flexible Spending Account allows an employee
to convert a taxable benefit (their salary) into
nontaxable benefits. When an employee contributes
to a spending account, they lower their Federal,
Social Security and in some cases, State taxes
and increase their spendable take-home pay! The
higher the tax bracket, the more they can
potentially save.
By using TAX FREE dollars to pay for necessary
qualified expenses, employees increase their
spendable income and save taxes.
Lets start with the dependent care spending
account . . .
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The DEPENDENT CARE SPENDING ACCOUNT is governed
by a Federal tax law that allows employees who
require daycare for their dependents, in order to
work, to pay up to 5,000.00 of qualified
childcare or eldercare expenses with money from
their paychecks BEFORE any taxes are removed.
Eligible Dependents Include

• Your child age 12 or younger of whom you have
  custody and for whom you are entitled to claim as
  a deduction on your federal tax return. For
  children of divorced or separated parents, only
  the parent with custody can consider the child an
  eligible dependent under this plan.

• Your child of any age who is physically or
  mentally unable to care for him/herself.

• Your spouse who is physically or mentally
  unable to care for him/herself.

• The parents of you or your spouse who are tax
  dependents, reside in your home and are incapable
  of self care.

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So Why Choose Beneflex?
Because we keep it simple for both employers and
employees
You would think that employees would jump at the
chance to pay 5,000 worth of daycare or
eldercare expenses on a tax-free basis and have
1,800.00 or more spend able income per year.
Unfortunately, most dependent care spending
accounts are as much a burden on employees as
they are a benefit. The normal burden
associated with the plan creates a low
participation rate from employees.
Due to low participation rates by employees, due
to the hassle of saving receipts and waiting to
be reimbursed, EMPLOYERS often ignore dependent
care FSAs and fail to offer a benefit that
actually SAVES them money.
BENEFLEX is the FSA plan that simplifies
dependent care spending accounts, increases
employee participation and SAVES THE EMPLOYER
MONEY!
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THE PROBLEM
Parents usually live from paycheck to paycheck.
The typical plan requires that the money is
deducted from the employees check but before the
employee has access to their money they must pay
their provider, obtain a receipt, turn the
receipt into the administrator and wait to be
reimbursed. Reimbursement can take up 3 to 4
weeks. Meanwhile, the employee is paying double
daycare.
Where was the benefit in this?
We dont believe there was a benefit because the
typical employee simply can not afford to
participate.
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THE BENEFLEX SOLUTION
The Beneflex "IRS approved" direct-pay system
eliminates the hassles employees normally have to
commit to in order to participate. WE PAY THE
DAYCARES DIRECT!
Employees have no weekly checks to write to
daycares No Receipts to keep The same week money
is deducted from their paycheck, their
daycare is paid directly from Beneflex!
BEST OF ALL
THERE IS NO WAITING TO BE PAID BACK
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We can PRACTICALLY guarantee greater employee
participation.
Its as simple as 1 - 2 - 3

• The employee elects to participate and chooses
  the amount that their
• salary is reduced each pay period
• 2. The employer sends the funds to Beneflex
• Beneflex pays the daycare provider directly the
  same week the employees
• salary is reduced

Employees can now afford to participate !
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Beneflex pays daycare providers Weekly or Monthly
We prefer to pay via electronic funds transfer so
that the provider is guaranteed that their
payment is in their checking account Friday of
each week or if paid monthly, the 1st Friday of
the month.
We also pay by check if requested. Checks are
mailed on Friday of each week. However, this
method leaves the provider at the mercy of the
postal service.
The 5,000 breakdown

• Employee paid monthly pre-tax deduction
  416.66
• Employee paid semi-monthly pre-tax deduction
  208.33
• Employee paid bi-weekly pre-tax deduction
  192.30
• Employee paid weekly pre-tax deduction
  96.15

Often, an employees daycare exceeds 5000 per
year. Beneflex allows employers to deduct and
send the amount above 5000 on a post-tax basis.
This allows BENEFLEX to pay the daycare the total
amount required and saves the employee the
trouble of writing a check for any extra amounts
needed.
THERE IS NO CHARGE FOR THIS EXTRA FEATURE
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These new rules make losing money almost
impossible

• Your provider goes up on the cost (you can
  automatically increase your childcare deduction
  to the new amount if the care provider is not
  your relative). Your care provider reduces their
  charge (you can automatically decrease your
  childcare deduction to the new amount charged).
• You change care providers (you can adjust your
  childcare deduction up or down to the amount
  charged by the new care provider even if one of
  the providers is your relative).
• Your need of coverage changes (your school-age
  child who normally requires after-school care
  only needs full-time care during the summer (you
  can increase or decrease your childcare deduction
  to the new amount charged).

Employees NEED this benefit!
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LACK OF EDUCATION EQUALS
LACK OF ENROLLMENTS
EZ explanation
The employee has 148.30 more spendable income
each month which is a yearly increase of
1,779.60
They earned itthey might as well keep it!
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Whats in it for the employer?
happy employees with more spendable income

The employer enjoys a savings equal to 2 of the
redirected amounts through reduced payroll taxes!
The employer does not have to pay the matching
FICA taxes on the Dependent Care Assistance
Program funds redirected by its employees. Since
our administrative cost is only 5.65, the
employer has a 2 savings of the funds redirected
by its employees.

• NO OTHER COSTS TO THE EMPLOYER
• NO MINIMUM NUMBER OF PARTICIPANTS REQUIRED

The benefit employers can no longer afford to
ignore !
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The Medical Flexible Spending Account
From the employee's point of view it's nearly
impossible to find a health plan that covers all
costs. There will undoubtedly be expenses that
are covered only partially or not at all.
Co-pays and deductibles add up fast !
These needs led to the birth of Medical Flexible
Spending Accounts (MedFSA's), established under
Section 125 of the Internal Revenue Service Code.
When an employee contributes to a MedFSA, they
lower their Federal, Social Security and in some
cases state taxes and increase their spendable
income
The higher the tax bracket, the more they can
potentially save.
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What kind of things does a MedFSA cover?
too many things to list on this presentation . . .

• Learning Disabilities (tuition or fees for
  special schools)
• Legal Fees (to authorize treatment for mental
  illness)
• Mental Nervous Disorder
• Nursing Services
• Obstetrical Expenses
• Operations if Medically Necessary
• Orthodontic Treatment
• Orthopedic Shoes
• Over-the-Counter reading Glasses
• Oxygen
• Periodontal Fees
• Prescription Drugs (drugs with RX)
• Psychiatric Care
• Psychoanalysis
• Radial keratotomy
• Surgery
• Telephone for the Deaf
• Transplants of Organs
• Vaccinations

• Acupuncture
  
• Alcoholism Treatment
  
• Ambulance Costs
  
• Artificial Limbs and Teeth
• Car Controls For Handicapped
  
• Chiropractors
  
• Contact Lens Solutions and Cleaners
• Contact Lenses
  
• Contact Lens Replacement Coverage
  
• Co-pays
  
• Crutches
• Deductibles
  
• Dental Exams and Cleaning
  
• Dentures
  
• Diagnostic Tests
  
• Drug and Alcoholism Treatment
  
• Experimental Medical Treatment
  
• Eye Examinations
• Eyeglasses
  

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How the MedFSA Works
The employer sets the minimum maximum limits
"Use it or lose it." This means that if an
employee elects 500 in the health FSA, for
example, and only uses 450 and does not use the
remaining 50, this is forfeited to the employer.
This is inherent in group insurance policies. If
you are enrolled in a medical policy and do not
use it in the policy year, you are not given a
refund. Why? For the price of the premium you
transferred your risk of illness to the
insurance company. So it is with a MedFSA. Your
election is your premium and any risk is shifted
to the employer. In reality there is little risk
of losing money if the employee sets aside money
for expenses that he is sure to use.
"Availability" rule. Example, when an employee
enrolls in a health FSA, in the amount of 600
and has a claim of 300 at the beginning of the
plan year, the employer is required to make
available" the 300. Since, the employer, by
offering a MedFSA is acting as an insurance
company by "fronting" these dollars, the employer
is also entitled to any forfeitures. Some
employers are concerned about this possible
exposure. Because, at the beginning of the plan
year several employees could draw down the
employee pool of MedFSA dollars and the employer
would have to make up the difference in the pool.
This is a temporary experience and is rapidly
made up by continuing payroll deductions.
The medical expenses only have to be incurred to
be reimbursed
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It Pays to Participate
A Flexible Spending Account allows an employee
to convert a taxable benefit (their salary) into
nontaxable benefits.
For every dollar the employees run through a
MedFSA plan, the employer saves the 7.65 FICA
tax (Social Security). For example, if after
enrolling in a MedFSA plan, the employees
collectively moved 100,000 pretax, the employer
would save 7,650.00 Since Beneflex only charges
5.00 per participant per month (reduced to 4.00
if they are offering the Dependent Care Benefit),
the FICA savings can easily be figured to cover
the fee by employers setting a minimum and
maximum contribution to the plan.
If your employees are paying too much in taxes,
then so is your company.
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Beneflexa step ahead
We are as paperless as the law allows

• Each time a non-insured qualified medical
  expense is incurred, the employee submits a
  Reimbursement Request Voucher along with copies
  of the charges.
• If the reimbursement request is received prior
  to Monday by 4 pm CST, the medical reimbursement
  is deposited directly into the employees
  designated bank account the following Friday.
• Each Monday, Beneflex processes all claims and
  notifies the employer of each participants claim
  and total of Thursdays MedFSA draft. Employer has
  until Wednesday noon to make modifications.
• Beneflex drafts the MedFSA account as needed
  each Thursday.
• Employers are sent a fee statement the 28th of
  each month.
• Employers are given a report each month showing
  year to date activity.
• Employees receive a quarterly statement of
  their account from Beneflex.

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beneflexinc.com
EASY
EFFECTIVE
EFFICIENT
Use Beneflex Flexible Spending Accounts
Youll Be Happy You Did !
Beneflex Inc. 800-925-4087 http//www.beneflexinc.
com