The Hartford Financial Services Group Inc. has announced easier access to a flexible spending account program available to customers for its group life, accident, and disability insurance.
The service, made available through Medical Group Insurance Services Inc., uses debit card technology to help customers interested in a convenient way to manage the costs of medical and dependent day care, the insurer said Thursday. Money deposited into an employee's flexible spending account is not subject to federal income tax and may be used to pay for qualified medical and dependent care expenses.
Flex Convenience also offers the potential for cost savings to employers who make it available to employees. Each dollar that employees contribute to a flexible savings account is exempt from employer FICA taxes, which may produce a net positive cash flow to a company's bottom line after administrative costs.
The share of companies offering flexible spending accounts to their employees is expected to rise to 93% by 2010, from 56%, according to Hewitt Associates. Though more than 90% of large employers already offer paper-based flexible spending accounts, many are switching to debit card programs to boost employee participation and tax savings.
