Section 125 Flexible Spending Account Plans: Dependent Care, Medical Premium & Unreimbursed Medical Expenses.

Transcription

1 Section 125 Flexible Spending Account Plans: Dependent Care, Medical Premium & Unreimbursed Medical Expenses Employee Briefing 1

2 Key Features Tax freedom from Medical premium, dependent care, unreimbursed medical expenses Plan administrator: BenefitsAssist Debit Card for Health FSA plan Paper claims paid by BenefitsAssist Non-debit card payments made every 2 weeks Annual Maximum (Plan year ): $5,000 * Pre-tax Medical premium automatic re-enrollment Dependent care paper claims Plan year: July 1 June 30 Annual claims deadline: June days *Plan year Annual Maximum will reduce to $2,500 to comply with Patient Protection & Affordable Care Act (PPACA) 2

3 WHAT ARE FLEXIBLE SPENDING ACCOUNTS? Flexible Spending Account (FSA) Employee elects on an annual basis an amount to be deducted from payroll on a pre-tax basis Unused funds revert to the employer if not used in the current plan year Health FSA: Funds used to pay for eligible medical expenses not covered under other insurance: Doctor s office and prescription drug co-pays Medical deductibles and co-insurance Over-the-counter medications require a prescription to be eligible for reimbursement Vision and dental costs Chiropractic services 3

4 WHAT ARE FLEXIBLE SPENDING ACCOUNTS? Flexible Spending Account (FSA) Dependent Care FSA: Funds used to pay for eligible childcare and other dependent expenses: Daycare Nursery school Before and after school care Summer day camp Care for mentally or physically handicapped over age 13 4

5 A KEY VALUE OF FLEXIBLE BENEFIT PLANS IS THAT EMPLOYEES SAVE ON TAXES Employee tax savings for Health FSA, Dependent Care FSA: FICA of 7.65% of payroll deducted contributions Reduced federal, state, local income taxes Eligible disbursements are not taxed 5

6 THE SCENARIO BELOW IS AN EXAMPLE OF POTENTIAL SAVINGS Assumptions: Health FSA election of $2000/year Combined Federal/State/FICA tax rate of 22% Employee savings: Pre-tax Health FSA contribution ($2000) X (.22) = $440 annual employee savings 6

7 THE DEBIT CARD OPTION AVOIDS DELAY IN REIMBURSEMENT Debit card can be tied to Health FSA Card is used as credit card at point-of-sale System checks cardholder status, account balance, and vendor merchant category code If all three pass the check, funds come off of card Additionally, if swiped amount matches the pharmacy, medical, dental, vision co-pay NO receipts are required. Otherwise BenefitsAssist follows up with receipt request. Card can be turned off if misused. Card is reloaded and reused each year DO NOT DISPOSE OF CARD. 7

8 THE DEBIT CARD OPTION AVOIDS DELAY IN REIMBURSEMENT You must report any loss or fraudulent use of the card within 30 days of such transactions. Otherwise you may lose those funds. You must use the card only to pay for expenses incurred after enrollment but during the plan year. Even if you are billed for a service or pay for it after enrollment, the service itself must have taken place after enrollment. You may only use the card to pay for expenses incurred, i.e. you cannot pre-pay for future services. 8

9 Enrollment and Renewal Employees must actively enroll in the plan(s). Eligible employees include Full-Time Regular (FTR), Part-Time Regular (PTR), and Full-Time Temporary (FTT) Enroll in Unreimbursed Medical and/or Dependent Care via enrollment form located at Pre-tax monthly Medical premiums 125 plan (only): re-enrollment will be automatic Employees submit claims via US mail, , fax or by using debit card BenefitsAssist, Inc. reimburses claims via check or direct deposit every other week 9

10 PY PLAN SCHEDULE Event/Action Date Enrollment/Reenrollment Announcement Monday, May 16, 2011 Enrollment forms submitted: for Debit cards by 7/1/11 Friday, June 10, 2011 Last day to enroll Friday, June 24, st paycheck reduction Friday, July 15, 2011 Plan year ends Saturday, June 30, 2012 Last day to file claims: Year Wednesday, Sept. 28, 2011 Last day to file claims: Year Friday, Sept. 28,

11 Information Enrollment: Send enrollment forms only to: Tammy Leonhardt, , Claims: Send all claims to: Shawn Adams, BenefitsAssist,

12 QUESTIONS? CALL BenefitsAssist, inc. Call BenefitsAssist, inc for questions regarding the Flexible Benefit Plan Consultoría en español 13

13 14