8 Ways Modern Pre-Tax Spending Accounts Improve the Employee Experience

Pre-tax benefits are a crucial part of any employee's compensation package. They allow employees to save money by reducing their taxable income so they have more take-home pay. 

For this process to run smoothly, benefits administration teams must select the right vendors and plans, as well as educate employees about their options. Modern pre-tax vendors offer the following eight selling points that streamline these tasks and improve the overall employee experience. 

1. Intuitive, accessible benefits 

Employees can only use their benefits if they understand what they are and how to access them. Traditional vendors have struggled here, often building clunky systems that may work fine on the back-end if you've received dedicated training but are unintuitive for most people. 

Modern pre-tax spending accounts are a step above, offering: 

• Robust mobile apps so users can manage their pre-tax benefits on the go 
• Simplified user experience from a single, consolidated platform, so employees can manage their benefits from one place, eliminating multiple logins and interfaces
• Streamlined reimbursements using automated processes. This reduces delays and frustration, allowing employees to focus on their needs.

2. Easier administration for benefits teams 

Traditional benefits offerings are synonymous with repetitive manual workflows. Often, administrators will type the same information into multiple platforms, sometimes resulting in errors. Modern platforms integrate seamlessly with other core systems, such as payroll or your HRIS, ensuring data flows from one to another. 

For example, retail company On struggled to manage a particularly burdensome pre-tax program; one of the main problems was its benefit product didn’t integrate correctly with On’s payroll provider, ADP. On’s in-house team were forced to manually enroll employees in their benefits—a process that took hours. By switching to Benepass, On saves three to five hours of admin time every week. 

3. Improved customer service 

In an ideal world, there would be no need for customer service. Benefits programs would run like clockwork, with no queries or escalations. The reality? Issues arise, whether during setup and implementation, open enrollment, or any other time of year if an employee has a question about a declined claim or just wants to know where their reimbursement is. 

Unfortunately, traditional vendors suffer from slow response times and inconsistent issue resolution, leading to frustration. For example, employees at Sikich, a technology service provider, struggled to access their benefits with their previous pre-tax provider, whose customer service team was far from responsive. It was the norm for employees to sit on the phone for two to three hours, waiting for their benefits accounts to be set up. 

Shanda Brown, Senior Director of Total Rewards and HR Operations at Sikich, explained, “People couldn’t get their accounts unfrozen or open because of the hurdles they had to go through with this prior organization. I had people’s money just sitting there that they couldn’t use because they couldn’t work with them to get their accounts open.”

Sikich wanted a modern pre-tax platform, so they switched to Benepass, where they received a superior support experience, including:

• Fast, reliable responses: We offer average resolution times within six hours for non-live inquiries and guaranteed availability within one business day.
• First-touch resolution: Our knowledgeable teams resolve 68% of issues in a single interaction, leading to a 94% customer satisfaction score. 
• Proactive education: Webinars, videos, and in-app guidance give employees the resources to use their benefits effectively.
• Enhanced transaction approvals: Our systems auto-authorize transactions to minimize unnecessary declines. 

4. Better benefits participation rates 

Employers don’t just offer employees their benefits because it’s the right thing to do. They want these benefits to move the needle on people initiatives like employee engagement, retention, wellness, and productivity. 

But you'll only make real progress in these areas if your employees are engaged in their benefits. And from a financial perspective, employers can only keep their payroll taxes low if their employees actively participate in these pre-tax plans. 

Employees who have previously had a poor experience with a traditional pre-tax vendor or project may be less likely to enroll again. Modern benefits providers can help here by: 

• Delivering an intuitive and engaging enrollment process that helps employees choose the best benefits for their needs. 
• Providing ongoing education throughout the year to keep benefits top-of-mind.
• Offering personalized recommendations based on employee demographics and utilization data.

5. Faster employee reimbursements 

Lengthy reimbursements are a common pain point for employees. In the current economic climate, where 57% of Americans live paycheck to paycheck, staff simply can't afford to pay for their benefits out of pocket. Some will go into debt, either using a credit card, personal loan, or overdraft, while they wait for the expense to be approved and will pay interest on the amount borrowed. 

Some typical things that can extend the reimbursement process even further include: 

• Checks that take a long time to be issued then get lost in the mail 
• Insufficient documentation submitted
• Unclear eligibility rules leading to rejected claims 
• Inconsistent approvals across the benefits administration team 

All of this undermines trust in your benefits program, which can be reversed with a modern, streamlined platform like Benepass, offering: 

• Automated reimbursement systems delivering quick and reliable payments without the delays of manual checks 
• Intelligent, automated processes that minimize errors and ensure fairness

6. Greater transparency

It’s much easier for employees to engage in their benefits when they can see what’s happening in real time. Traditional vendors offer limited transparency, perhaps requiring employees to place a call or send an email to check their account balance. Modern software hooks employees up with their own profile, so they can log in at any time of day or night. 

From their personalized, customizable dashboard, they’ll see details such as: 

• Deductions taken to date: Employees can monitor their pre-tax contributions and plan expenditures, ensuring they stay within budget.
• Real-time account balances: With no need to call a customer service agent, employees can check how much they have left to spend in real time. 
• Detailed transaction histories: Employees know exactly when each claim was processed and for how much. 
• Claims statuses: Employees can see if their claim is still pending, approved, or declined. 
• Tax savings summaries: Modern platforms provide employees with a detailed breakdown of how much they’ve saved in taxes thanks to their pre-tax benefits. 
• Upcoming deadlines: Employees will never miss an important enrollment or deadline with regular reminders and notifications from their benefits platform. 

7. More diverse benefits offering 

Employees are individuals, but traditional benefits haven't treated them as such. Different demographics, lifestyles, and personal needs require different benefits offerings to feel satisfied at work. 

Traditional vendors may only offer a limited range of pre-tax benefits or charge excessive fees for adding new options. But modern platforms give employers more flexibility and affordability in assembling a diverse benefits package that includes: 

• Pre-tax commuter programs for employees who don’t have access to company parking or use public transportation.
• High-deductible health plan (HDHP) options that enable employees with major medical plans to participate in flexible spending accounts (FSAs).  
• Dependent care FSAs for employees with children or elderly dependents.
• Health savings accounts (HSAs) for employees with high-deductible health plans.
• Student loan repayment assistance programs to help employees pay off their student debt faster. 
• Health reimbursement arrangements (HRAs) to supplement or replace employees' major medical plans.

In the case of Sikich, they were so impressed with Benepass’s pre-tax program that they added a flexible lifestyle spending account to further accommodate their employees’ individual preferences. 

“We get so many positive emails and mentions about how great the LSA is. Employees are able to buy new running shoes, new Fitbits, or pay for gym memberships. That good feeling that employees are having, that they get their wellness needs taken care of has been the best ROI for us.” —Shanda Brown, Senior Director of Total Rewards and HR Operations, Sikich 

8. Secure employee data 

Benefits programs house a ton of highly sensitive data, including employees' full names, Social Security numbers, and medical information, making it essential to secure this confidential information. 

Modern benefits platforms employ the latest security and compliance best practices to safeguard employee data, including: 

• Secure data encryption. For example, Benepass uses enterprise-grade security, encrypting all information to prevent unauthorized access.
• Two-factor authentication, where employees verify their identity through a second form of identification before accessing their benefits account. 
• Regular security audits, including penetration testing, to identify any potential vulnerabilities in their systems.
• Compliance with industry regulations, including relevant federal and state data privacy and security regulations, to ensure employee information remains safe. 
• Data breach response plans to minimize damage and restore trust in worse-case scenarios. 

Elevate your pre-tax benefits offering with Benepass

Benepass offers a wide range of pre-tax (and post-tax) benefits designed to empower your employees with the ability to choose, use, and track their benefits all in one place. These include: 

• Health Savings Accounts: Employees can set aside pre-tax dollars for healthcare spending. 
• Health Reimbursement Arrangements: The Benepass HRA is an employer-funded way for employees to pay for high medical costs, such as fertility treatment, gender confirmation surgery, or health-related travel. 
• Flexible Spending Accounts: Employees receive both a physical and virtual card to make purchases with, and can manage their account via a web and mobile app. 
• Commuter Benefits: Pay for parking, public transportation, carpooling, scooters, etc. via an FSA or DCFSA. 

Ready to update your employee benefits? Move away from disjointed, antiquated systems and streamline your pre-tax benefits with a modern platform that employees will love. Book a free Benepass demo today or contact sales@getbenepass.com to connect with a benefits specialist.