Hi, all. I am new to the forum, and am hoping someone can help with a question. In advance, I apologize if this issue has already been addressed elsewhere. I didn't see it. So here's my question:
I am a part owner of small business. A friend, who owns a separate small business, has told me that (i) his company eliminated its group health plan, (ii) his company now provides each employee a pay increase of $400 per month, and (iii) employees buy their own health insurance on the private market. Importantly, he also informed me that his employees set up FSAs, into which they deposit pre-tax dollars, and that employees simply reimburse themselves from the FSA, on a pre-tax basis, for their healthcare premiums.
Is this permitted? If it is, I think my business wants to move in this direction, as it would likely be a win-win for both the company (as employer) and the employees.
Any help would be GREATLY appreciated. Thank you.
