The Mountain View, Calif.-based accounting software giant has expanded into the world of employee benefits. While it might seem like a unusual step for Intuit, founder Scott Cooks tells us the company is aiming to be a low-cost benefits provider for small companies.
Here's the gist: Intuit has officially begun offering a 401(k) service that starts at $75 per month, per employee, for a company of fewer than 10 employees. No minimum investment is needed. The plan offers several matching savings options for employers.
Additionally, Intuit is now offering a health-care debit card plan that costs the employer $5 per month, per employee in administrative fees. Employers make tax-free contributions to a health reimbursement account and employees receive a professional-looking debit card they can use to pay for medical expenses.
Intuit manages the complicated details for an employer through an online portal. Think TurboTax, except for health-care and retirement management.
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We had a demo of Intuit's new offerings. Here are some takeaways for small-business owners:
The debit card plan is flexible.
The big upside is that Intuit's health-care debit card plan is flexible and can supplement an employee's group insurance. Or it can be offered as a standalone benefit.
Additionally, health reimbursement accounts, including Intuit's, can be an effective way to set aside untaxed money for employee health expenses while cutting paperwork, says Allan Roth, principal of Wealth Logic, a Colorado Springs, Colo.-based financial planning and investment advisory firm.
"Employers don't have to worry about reimbursement record keeping and submitting paper records," Roth says.
Skip the 401(k).
Small businesses might want to shop around before buying into Intuit's offering, Roth says.
Intuit says bigger retirement management companies have large minimums for managed assets to run such a plan, but Roth says there are comparable options for small firms that offer a better diversity of investment funds. For example, Mobile, Ala.-based Employee Fiduciary advertises a similarly low asset fee -- less than 0.2 percent.
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"I'm underwhelmed by Intuit's overall choice of funds," Roth says. The funds don't match the returns of other investment firms, he says.
Anu Sanghvi, who manages the 401(k) product for Intuit, says the investment options available in the plan will evolve over time as the service grows. Some business owners might want to wait until Intuit can produce better returns.
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