The Internal Revenue Service has issued a complete list of eligible expenses that can be funded through salary reduction and The Choice Account. These expenses fall into three major categories or sub-accounts:
                  1)  Tax-Free Health Insurance Premium Payment
                  2)  Tax-Free Health Expense Reimbursement
                  3)  FamilyCare Tax-Free Dependent Day Care Expense Reimbursement

To receive a reimbursement payment from an account, the employee completes a Claim Form (provided by LFS), attaches eligible bills or receipts which support the claim, and forwards this information to LFS Benefit Services. LFS then pays the claim from the employee's account, as long as money is available from the account. Employees will receive monthly and annual status reports of their individual plan accounts.

The Internal Revenue Service has approved salary reduction as a method of funding The Choice Account Flexible Spending plans. This means that insurance premiums for group life up to $50,000, medical, dental and many other coverages currently being made through payroll deductions can now be converted to the before tax salary reduction method. By using salary reduction, employees reduce their taxable income and, thus, reduce payroll taxes such as state and federal income tax and Social Security tax. In order to participate in The Choice Account, employees simply need to sign an agreement with their employer to reduce their salary by the amount of their eligible payroll deductions. The employer agrees to accept this reduction in taxable salary and pay the eligible premiums or expenses for the employee.

Employers save payroll taxes on employee money deferred through the plan, too! When an employee reduces his taxable salary in accordance with Section 125, employer payroll taxes such as FICAand FUTA are reduced. Workers' comp and some liability insurance premiums will also be reduced. The Salary Reduction Method is a simple way to use Section 125 to the benefit of the employer and employee.

When you select The Choice Account Flexible Spending plan, LFS handles all of the on-going adminitrative duties for you. All your staff needs to handle is forwarding completed employee enrollment applications to LFS, verifying the monthly list bill against payroll, and writing a check to LFS for employee deposits and fees. Then sit back and let LFS take care of the rest!
LFS Benefit Services will handle all admnistrative duties for your plan.

Our services include:
     Plan Implementation
          Plan design assistance
          Plan documentation and filing
          Summary plan descriptions
          Enrollment materials
     Monthly Administration
          Maintain employee records
          Maintain a separate checking account
          Directly receive claims from participants
          Verify and process claims
          Prepare participant statements and checks
          Mail statements and checks directly to participants
          Provide monthly list billing for company review
     Annual Reporting Services
          IRS Form 550O Preparation
          Required Non-Discrimination Testing
          Documentation ammendments as required