Administrative Services

COBRA/HIPPA

F.W. Serra offers complete COBRA and HIPAA administration including:

  • Sending COBRA information packets and bills direct to the participant
  • Receiving COBRA payments for deposit to the plan’s account
  • Providing monthly monitoring of COBRA eligibility dates and reporting on all participants
  • Ensuring claims will not be paid unless the COBRA participant is active on the plan.

HIPAA Certificates are coordinated through the same system.

Section 125 Cafeteria Plan

Section 125 POP & FSA Plans. Section 125 of the Internal Revenue Code serves two functions; First, it allows for employees to contribute their portion of employer sponsored insurance costs on a pre-tax basis (also known as a Premium Conversion or Premium Only Plan).  Secondly, it can also serve to help employees pay for certain expenses in a tax advantaged manner.  In this form the plan is sometimes called a Flexible Spending Plan, because it allows employees to pay for certain unreimbursed medical expenses (i.e. office visit co-payments) or children's daycare on a pre-tax basis. By paying for these expenses before being taxed, employees lower their taxable income, pay less in taxes and increase their take-home pay. These expenses include:

  • Employee contributions toward medical-related insurance premiums.
  • Medical-related expenses such as deductibles, co-insurance, or uninsured medical expenses.
  • Dependent care expenses.

By offering a Section 125 Plan, Employers are able to realize a number of benefits including:

  • Reduced Payroll Costs - Social Security contributions are reduced for each dollar of employee participation!
  • Cost Control - An employer can control the company's share of medical costs, without limiting employee choices.
  • Address the Needs of a Diverse Work force - An employer can offer individually tailored benefits at little or no additional cost to the company.
  • Recruit and Retain Quality Employees - An employer is viewed in a positive light by current and prospective employees because a benefit package is being provided with the employee's interests in mind.

What are qualified expenses?
The expenses include employee contributions toward medical-related insurance premiums, medical-related expenses such as deductibles, co-insurance, or uninsured medical expenses and dependent care expenses. Medical related expenses include dental care, prescriptions, eyeglasses and out-of-pocket medical expenses that may not be covered by insurance premiums.

How does my company benefit from implementing a FS.A.?
Employers save 7.65 percent on every dollar employees run through a Section 125 Plan. Employers also benefit from increased employee loyalty and improved ability to recruit new employees.

Are there any risks? What are they?
There are basically two risks: 1) Under the Use-It-or-Lose-It Rule money not used by the end of the Plan Year (and if elected, a 2.5 month grace period immediately following the plan year) is retained by the company. 2) Under the Uniform Coverage Rule the employer is at risk if an employee quits with a negative balance. FNL can recommend steps to help reduce this minimal risk, and some vendors we utilize to provide F.S.A. services to our clientele will assist Employers with some of the cash flow issues associated with payments of such eligible expense reimbursements.  In Employee Benefit Research Institute's 2002 research, it was identified that 90% of companies with 15 to 508 employees offer FSA plans.