CAFETERIA PLAN AND FLEXIBLE SPENDING ACCOUNTS PARTICIPANT HANDBOOK

Transcription

1 CAFETERIA PLAN AND FLEXIBLE SPENDING ACCOUNTS PARTICIPANT HANDBOOK PROVIDED BY MID- AMERICAN BENEFITS, INC.

2 EXAMPLE OF TAX ADVANTAGE AVAILABLE THROUGH THE FLEX PLAN Under current tax law, yu may establish a tax-free Flexible Spending Accunt with a prtin f yur salary, and use these dllars t pay fr particular kinds f medical and dependent care expenses. Estimate nly thse reasnably, predictable expenses yu plan t incur during the cntract year. Use the list f Expenses Eligible fr Reimbursement. Be cnservative. Under current IRS law, yu frfeit any remaining balance in yur accunt. Withut Flex Plan With Flex Plan Grss Mnthly Pay Pre-tax Ins. Prem. (Health, Dental, Life, Disability, Cancer) Estimated Mnthly Medical Expenses nt cvered under yur health plan Estimated Mnthly Dependent Care Expenses Ttal amunt subject t tax Less: Federal Tax (15%) State Tax (5%) FICA (7.65%) After Tax Incme After Tax Expenses: Ins. Prem Medical Dependent Care Actual Mnthly spendable incme Saving: $ /mnth x 12 = $

3 SUMMARY BENEFITS DESCRIPTION v A cafeteria plan is a type f flexible benefit plan that permits yu t determine hw yur emplyer s and yur wn cntributins will be allcated amng the benefits ffered. If yur plan is a simple health insurance premium plan, it has nly ne bjective: t permit yu t pay fr yur share f the cst f insurance premiums with pre-tax dllars. Yu elect t reduce yur salary each mnth in an amunt equal t yur share f the insurance premium, and yur emplyer, in return, agrees t prvide yu with health insurance. Because health plan premiums are deducted n befre-tax basis, special IRS rules apply: v Yu may enrll in this plan nly nce each plan year during pen enrllment. v Yu cannt change yur decisin until the next plan year, except fr a change in family status: Marriage r divrce Birth r adptin f a child Invluntary lss f spuse s health cverage Emplyment status change t full-time r part-time fr yu r yur spuse Death f spuse r a cvered dependent Yur dependent satisfying r ceasing t satisfy an eligibility requirement fr benefits T change yur cntributin, cntact the Payrll Dept. Yu must change yur cntributin within ne mnth frm the date f yur family status change. If yur plan prvides Flexible Spending Accunts, it is a benefit allwing yu t pay ut-f- pcket medical, visin, dental and dependent care expenses with tax-free dllars. Under current tax law, yu may establish a tax-free accunt with a prtin f yur salary and use these dllars t pay fr particular kinds f medical and dependent care expenses. v The amunt yu chse is depsited by payrll int yur flex accunts befre federal, state, and scial security taxes are calculated. This reduces yur taxes s yu have mre spendable incme. v Yur Scial Security benefits may be affected. Scial Security benefits are based n the taxes yu pay, therefre, yur scial security benefits culd be slightly less. EXPENSES THAT QUALIFY: Tw brad categries f expenses qualify fr this prgram: Unreimbursed medical-related expenses fr yu, yur spuse and dependents, including medical, dental, visin, and drug expenses that are NOT cvered by yur health plan and incurred during perid f cverage. Perid f cverage is a perid during which yu are eligible t participate in the Plan (frm yur effective day n the Plan t the end f Plan Year r if yu are terminated t the last day f emplyment). If the Plan is terminated, credits t yur medical FSA will be used t prvide benefits thrugh the end f plan year in which terminatin ccurs. List f eligible medical expenses are enclsed. Dependent care expenses incurred while yu and yur spuse are at wrk, such as daycare, babysitting, after schl care, and summer day camp fr children under 12 and care fr disabled dependent adults. Dependent care expenses cvered frm yur effective day n the Plan thrugh the end f Plan Year even thugh yu terminate yur emplyment. Nte: If yur tax bracket is 15% r less, yu will mst likely prfit by claiming credits fr dependent care n yur tax return. Yu have t decide what is mre prfitable fr yu, but yu cannt d bth. It is nly Dependent Care Assistance Prgram thrugh Cafeteria Plan, r Dependent Care Credit n yur tax return. Yu may establish a flex accunt fr either r bth types f expenses. The accunts must be kept separate.

4 SPECIAL RULES: In additin t the previusly utlined rules fr insurance premiums that apply t flex accunts, the fllwing rules als apply: Only custdial parent can be a Participant in Dependent Care Assistant Prgram. The maximum allwable tax-free amunt fr dependent care (ne r mre children): ü $ per year if yu are married and file jint return r if yu are single r head f husehld fr tax purpses. If bth parents participate in the plan the ttal cmbined cntributin cannt exceed this IRS maximum. ü $ per year if yu are married and file separate federal incme tax returns. Any balance remaining in yur accunt at the clsing f the plan year will be frfeited. It is imprtant that yu carefully estimate yur needs t avid frfeiture. Yu may file plan year claims up t the clsing perid fr the plan year (3 mnths after the end f plan year). OBTAINING BENEFITS: As yu incur eligible expenses, submit a signed FSA claim frm with attached dcuments t Mid- American Benefits Inc.: 5310 N 99th St. Omaha, NE Fr medical expenses: the full annual amunt f cverage yu have elected, less any prir reimbursements during the Plan Year, can be used at any time during the Plan Year. Fr dependent care expenses: n expenses can be reimbursed that exceed the payments yu have made up t that date. If yur claim exceeds yur current accunt balance, the excess part f the claim will be carried ver int the fllwing pay cycles t be paid as yur balance can cver it. Yur dependent care prvider can be anyne yu d nt claim as a dependent fr Federal incme tax purpse. Als, yu cannt claim expenses if the service prvider is yur child r stepchild under age 19. Required attached dcuments: Fr medical expenses: c-pay receipts, EOBs r itemized bills /statements with the date f service, recipient f service, and prvider f service (yu may keep riginal dcuments and send cpies with yur claim). If yur medical expense is nt cvered by insurance, write it n the bill. If expense is cvered by yur plan, send a cpy f EOB (Explanatin f Benefits). Keep a cpy f claim and stub f check fr yur references. When submitting yur claim; 1. Fill ut yur claim frm as cmpletely as pssible. Frms withut signatures cannt be accepted and will be returned. 2. Submit valid prfs f service Receipts Bills

5 EOB's (Explanatin f Benefits) frm yur insurance cmpany They must shw; Date f service r expense Type f service r expense Fr whm the service r expense was incurred. The cst f the service r expense that was incurred. IRS Regulatins d nt allw us t accept the fllwing as prf f service; Bankcard receipts r statements Canceled checks Estimates Statement balances r balance frwards 3. Make cpies f yur receipts and include them with yur claim frm 4. Either fax r mail yur claim frm with the cpies f yur receipts t Mid-American Benefits, Inc. Please dn't d bth. Fr dependent care expenses: receipts with the name f the prvider and their tax identificatin number (scial security number fr individual prviders), the dates f care and the amunt paid.

6 EXAMPLES OF EXPENSES ELIGIBLE FOR REIMBURSEMENT THROUGH YOUR MEDICAL FSA Treatments Acupuncture Alchlism r drug dependency treatment Ambulance service Artificial limbs Birth cntrl pills Braces Braille bks and magazines Car adaptatins and cntrls fr the handicapped Chirpractrs Christian Science practitiner's fee C-insurance amunt yu pay Cntact lenses Cntact lens slutins and cleaners Csmetic surgery as necessary t crrect cngenial abnrmality r repair required by accident Cst f peratins and related treatments Crutches Deductible yu pay fr health care Dental fees Dentures Diagnstic fees Dctr's fees Eye examinatins Eye glasses, including prescriptin sunglasses Fees f healing services Hearing devices and batteries Hme imprvements necessary due t medical reasns. Hspital bills Hypnsis fr treatment f an illness Insulin Labratry fees Laetrile by prescriptin Life fee t retirement hme fr medical care Mentally impaired care including treatment, training, and special hmes. Nursing hme care fr medical treatment Nursing services including Nurses' bard and FICA tax where paid by taxpayer. Obstetrical expenses Operatins Optmetrist Orthdntia Orthpedic shes Ostepath fees Limited Over-the- Cunter items Oxygen Physician-recmmended swimming pl r spa equipment and maintenance Prescriptin and ver the cunter drug and medicines. Psychiatric care Psychlgist fees Rutine physicals and ther nn-diagnstic services r treatments Seeing-eye dg and its upkeep Smking cessatin prgram Special educatin fr the visually impaired Special plumbing fr the physically impaired Sterilizatin fees Surgical fees Syringes, needles, injectins, and ther medical supplies Telephne fr hearing impaired Televisin and audi display equipment fr hearing impaired Therapy treatments Transplants Transprtatin expenses Primarily in the rendering f medical service i.e., railrad fare t hspital r t recuperatin hme, cab fare in bstetrical case Tuitin at special schl r tutring fr the learning disabled and handicapped Vitamins by prescriptin Wheelchair Wigs, if prescribed by a dctr X-rays NOTE: This is a representative list f medically related expenses that qualify under current IRS guidelines. This list may change. The expenses yu claim must nt be paid under insurance plicies r any ther surce.