Employee benefits

Here is the forum question.  I need one 100 word reply to each of these forum replies.

1) Based upon the readings and the video, what are two major factors an employee must consider before enrolling?

2) In early December of 2013, the US Treasury and the IRS issued a formal notice to employers that employees may rollover up to $500 of the unused funds at the end of the 2013 plan year (Miller, 2013). With this significant change, how will this impact both the employee and employer that offers FSAs to their workforce?

3) As an HRM, would you recommend an FSA to your employees? Why or why not?

Here is what i need a reply to:

1.  It is important to consider how accurate an employee will be able to forecast their expenses that they will incur, which would be covered under either a medical care plan or dependent care plan, so that their contribution is accurate. If an employee contributes $2,000 into their flexible spending account, but only has $700 in expenses that are eligible to be reimbursed, they are losing the extra amount of money that they are unable to roll over into the next year. Another factor to consider, since funds are not eligible to be transferred, is that it is essential for an employee to understand the benefits/differences between the plans when choosing how much to contribute each year. Another factor to consider is that the

Rollover will affect employees positively because it can account for mistakes made the year before. For example, if an employee contributes $700 more to their FSA than they use, they can account for that overage in the coming year, while still having the eligibility to use $500 of the extra $700 without losing it. Conversely, the employer is able to retain less of the FSA money than they were before the formal notice was published. According to Kara Brandeisky, writer with Time Money, the employer assumes a risk when offering an FSA because the employee is not usually obligated to wait until they have contributed their money before using it (2015 para 6,7). Having a rollover period may reduce the funds that the employer is able to keep in order to offset aforementioned situations.

I would absolutely recommend FSA to employees as an HRM. As an HRM, I believe it would be my job to educate my employees on all of the benefits that my company offered that could improve their quality of life, and it seems that FSA offers a way to diversify paychecks, and get the most out of their money. By paying for healthcare expenses with pretax dollars, as well as saving for medical emergencies as well as routine care each month, employees are better off with an FSA than without.

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2. Per the reading and the video, the two major factors an employee must consider if they are to enroll in FSA is to decide how much they want to contribute monthly and what they would be using the money for whether it is healthcare or childcare reimbursement. 

My opinion, knowing what I have learned from the video and the reading, it is hard for me to see this being anything but positive. Unless there is something about FSA and how it works, which I am not understanding. The way I see it, if the employee can rollover $500 dollars of their own unused money, this means they could choose to not contribute as much monthly for the next year and this could help save them money.  As for the employer, since it is their responsibility to pay off any amount the employee uses towards medical bills even though they have not contributed the full amount, this could be used to help the amount the employer would have to pay. If the employee decided to have $100 dollars allotted from their paycheck and after 3 months accumulate $900 in medical bills, the employer must pay the remaining balance of $600. If the employee quits before they can contribute the full $900, the employer will have lost not just the employee, but $600 dollars as well.

From what I know, unless there is some gray area I might not be understanding, I believe I would offer this to my employees. I think it is very important to take care of those who work for you and make sure they can take care of their families. I believe this is a great incentive because the money comes right back to the employee. As a mother of 3, I know exactly how expensive childcare can be. I have seen the way finances can put stress on families especially when it comes to medical expenses. In my opinion, I think this would be an important benefit to offer.