Flex Administration?

[Guest Mary Jo]

Trying to decide whether or not to outsource our flex administration. Curious as to what the practical pro and cons might be to either approach. If we decide to outsource, there doesn't seem to be many flex administrators. Any recommendations? We are in Seattle.

[Sheila K]

We have always outsourced our flexible administration. We have used two different companies. We started with Insurers Administrative Corporation here in Phoenix. We changed to Great West in Denver two years ago, due to pricing, and had two of the most painful years because of it. We learned our lesson that you definitely get what you pay for and have returned to IAC. If you want contact information for IAC, e-mail (smkarizona@techie.com) or call me and I'll be happy to provide it to you. We are in Arizona.

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Good Luck!!!

Sheila K 8^)

602 683-1013

[Kirk Maldonado]

I'm not in your area, but extremely few of my clients outsource that work. This is true, even though most of them have had their plans in effect for many years.

[Lisa Hand]

From a TPAs view, there are a number of reasons to outsource a cafeteria plan especially those which include flexible spending accounts. Compliance, testing, proper education of employees and minimizing the administrative impact on the employer are some of them. One of the most important reasons to outsource if your plan includes a medical FSA is that the employer really does not want the possible liability of reviewing medical claims. The review must be done to insure proper processing of the account, but most employers simply do not want to be in the position to see this type of imformation for legal reasons. Additionally having the employer reviewing claims could have a chilling effect on employee usage of the account for the same reason.

There are a number of TPAs listed in the BenefitsLink yellow pages.

[Guest kgerten]

Self administration can work, it depends on the number of employees enrolled in the plan and the time commitment from the HR dept. Outsourcing can be expensive. There were not any administrators in our area that were cost effective so we bought the software to do it ourselves. In 1997, when we began this little did we know we were actually starting a new business!

We now also do it for other small businesses (less than 50 employees). If you need assistance let us know. We would be happy to refer you to the software comany or can talk about administering it for you.

Kim

[Guest Pat Cook]

Outsourcing can be done and it does NOT have to mean outrageous cost. What you need is an independent broker who does your marketing for you as we do. The brokers do the leg work for you and the broker fee can either be a flat fee or a per/head fee, depending on your demographics. What's more, even including the broker cost, you could put the package together for roughly the equivalent of doing it in-house, but at a greatly reduced liability. Further, a good broker provides on-going support, so problems are resolved by them and you can go back to your other duties. If you have more questions or need more infor, please feel free to contact me.

[SLuskin]

We have been doing Section 125 administration for other small (10-400 ees) companies for 11 years. Since it is a turnkey operation, we think that we can provide the service to the employer much less expensively than having an in-house person do it. A big plus is that when the answer is "no", we say it, instead of someone at the client company that the participant has to see every day. We are in the South Florida area.

[Guest lduplechin]

I AM INTERESTED IN STARTING MY OWN BUSINESS OF CAFETERIA PLAN ADMINISTRATION. I AM CURRENTLY IN THIS BUSINESS AND HAVE THE SOFTWARE AND THE EXPERIENCE TO DO THIS OUT OF MY HOME. HOWEVER I DO NOT KNOW ABOUT THE LEGALITIES AND LIABILITY ISSUES THAT GO ALONG WITH THIS BUSINESS. CONSIDERING THE

RESPONSIBILITY I WILL BE TAKING ON I WOULD LIKE AS MUCH INFORMATION ON THIS AS I CAN GET

BEFORE MAKING ANY DECISIONS. PLEASE SEND ME

ANY INFORMATION YOU WISH TO OFFER ON THIS ISSUE. THANKS!