If the answer to either question is yes, the fsafeds.com Web site could be of assistance.

The site alphabetically lists an array of common medical and dependent care expenses and indicates whether related claims are FSA-eligible. It also provides specific examples of situations in which borderline claims are eligible for reimbursement.

https://www.fsafeds.com/fsafeds/eligibleexpenses.asp

Here are three reasons why employees should only dip into their retirement savings as a last resort.

1. It’s very hard to make up the lost savings

Many people are able to repay their 401(k) loans without incurring penalties. Even so, the lost opportunity for account growth is very tough to make up in other ways.  An employee who earns $40,000 a year and takes just a modest $2,500 loan will cost himself nearly $15,000 –  even if the loan is repaid in full without penalties.

Another problem: Employees who take out 401(k) loans get taxed twice. Tthe loan itself isn’t taxed, but the repayments come from regular taxed payroll dollars. And unless the employee has a Roth 401(k), the account will be taxed when it’s cashed out upon retirement. But either way, employees end up paying Uncle Sam twice for the same money.

2.  Built-in disincentives

While the interest rate on a 401(k) loan may be reasonable, there are often other sorts of fees that jack up the cost of borrowing against the account. Some plans charge fees for processing the loan.

In addition, some employers’ plans disqualify the employee from further 401(k) participation until the loan is paid off in full. This further depletes the employee’s final account balance — often by huge sums of money.

Alternatively, some employees reduce their contributions in order to afford to repay the loan. While this works in the short-term, over the long haul it depletes the value of the 401(k) account.

3.  Repayment schedule can change

The repayment schedule on a 401(k) is set as long as the employee remains at the company and eligible to participate in the plan. But if employee loses his or her eligibility to participate in the plan (e.g., a permanent switch from full-time to part-time status, voluntary or involuntary termination), the repayment schedule is out the window.  Typically the full repayment is due within 60 days. 

What happens if the employee can’t repay? The IRS treats the remaining  balance like a cash-out. Now the employee gets clobbered with a 10% penalty and owes income tax on the money.

Education is crucial

While you can’t stop employees from taking 401(k) loans, you can make a priority of drumming home the message that just because 401(k) loans are available doesn’t make it a good option.  As a matter of fact, only in case of severe hardship should a plan participant even entertain the thought of a loan. It’s simply not worth all the potential risk and damage to long-term savings.

The percentage of employees for whom English is a second language continues to rise. How do you communicate with such employees about their benefits?

In particular,  is it a smart business practice to translate your benefits manuals and employee handbooks to the native language of foreign born employees?  An ever-growing number of employers would say yes. But some legal analysts says no.

 Reason: Even small discrepancies in the translation can open the door to lawsuits. It’s a classic case of no good deed going unpunished.

Legalese is hard to translate

Think about how hard it is to verbally explain the legalese of your benefit plan documents to English-speaking employees. While simplifying the terms helps employees understand, it also sacrifices a certain degree of accuracy.

That’s no problem when you’re speaking to an employee, but it gets messy when you expect employees to rely on written documents that may contain inaccuracies.

To make matters worse, many smaller employers opt for amateur translations (usually done by bilingual employees) of their benefits materials.

It’s very easy for the key terminology to become misleading: For instance, it’s very difficult to directly translate the English definitions – and exceptions – for coverage of pre-existing conditions.

Even if you’re bilingual, it’s quite difficult to come up with equivalent terms in a foreign language.  Apart from causing confusion among the employees you’re trying to help, companies unwittingly increase their own legal liability if an employee sues for benefits discrimination.

Professionally written, specialized translations can be cost-prohibitive. You may get more bang for the buck by offering foreign-born employees educational benefits (e.g., English-as-a-second-language classes).

 Reason: Some employees want these benefits more than the other ones described in your manuals.

In addition, when it comes to benefits education, there may be cultural issues at work that go beyond the language barrier. For instance, retirement is a foreign cultural concept to some foreign-born employees. In many countries people work their entire lives. It’s tough to convince these workers to participate in a 401(k) plan.

In a similar vein, some foreign-born employees hold the erroneous belief that the they won’t get back the money in their 401(k) account if they leave the company.

No matter how much you invest in translating your benefits materials, it takes time to build trust and open the lines of communication. In most cases, trust is your ultimate ROI.

Here are four proven techniques for getting non-talkers involved in discussing their benefits.

1. Re-direct questions

When only a few people ask questions about the material, give a brief reply and then turn the question over to the rest of the group.

Example: Ask attendees to name some situations where they’d use a flexible spending account.

2. Use role-playing scenarios

Role-playing scenarios boost participation two ways. They enliven discussions of otherwise dry topics. And, by dramatizing issues, you get the group involved emotionally.

For instance, this technique is extremely effective in discussing FMLA and HIPAA privacy with supervisors at your firm.

3. Write comments down

You may want to write down participants’ comments on a marker board or chalkboard.

This validates people’s contributions and subtly pressures other attendees to offer insights or questions of their own.

4. Turn silence to your advantage

Many presenters rush to break silences in the room. But filling the silence with your own response robs the group of a chance to take over the discussion. The silence may seem uncomfortable, but you don’t always have to be the one to let attendees off the hook.
 

People often just need time to consider their comments. If no one responds after about 30 seconds, rephrase the question.

The statements can easily backfire – or contain inaccuracies. Here’s how to find and fix two common trouble spots:

1. Avoiding incorrect info

Accidental math errors are the most common – and damaging – problem with total comp statements.
They’re also the toughest for you to spot and correct before the firm sends out the statements, since you aren’t the one who crunches the numbers.

But there are two ways to minimize the risk:

• Make a list of the data sources you use, such as Payroll, your 401(k) provider and health plan carrier, and
• Ask each source to pull and review a few random samples. If they’re OK, chances are the rest will also be fine. But if they contain errors, you can be pretty sure others will have mistakes.

A related problem: Some statements are arranged as a single list of costs, one line after another. To cut the risk of putting something on the wrong line, break the statement down into small sections (e.g., salary, healthcare and retirement). Bonus: This helps make statements easier for employees to follow.

2. ‘Just increase my salary’ syndrome

Sometimes, total compensation statements can actually decrease salary satisfaction, rather than boost morale. A handful of employees may gripe, “Why can’t you just increase my salary instead?” That’s especially true for legally required benefits (like workers’ compensation) and low-profile benefits such as term life insurance. Two fixes that work:

• List “government-required benefits” as a section of the statement. Avoid the term “mandated,” since many employees are unfamiliar with it, and
• Consider adding a section that shows employees how much it’d cost them to line up their own coverage instead.