Your Flexible Benefit Plan -- Premium Conversion and the Flexible Spending Accounts Updated: April 2015
YOUR FLEXIBLE BENEFIT PLAN PREMIUM CONVERSION AND THE FLEXIBLE SPENDING ACCOUNTS Introduction The Flexible Benefit Plan is authorized by Section 125 of the Internal Revenue Code. The Flexible Benefit Plan consists of three components; Premium Conversion, a Health Care Flexible Spending Account and a Dependent Care Flexible Spending Account. Each component allows participating employees to avoid paying federal income tax, FICA tax on the money contributed to the plan for qualified expenses. State and local income taxes are also reduced in most jurisdictions (if applicable). Each participant's savings depends on their personal tax situation. PREMIUM CONVERSION Premium Conversion allows employees to pay their share of medical, dental, vision and any other qualified insurance premiums with tax-free income. Participation is automatic. You do not have to enroll to participate. FLEXIBLE SPENDING ACCOUNTS (FSAS) There are two types of Flexible Spending Accounts (FSAs): The Health Care FSA allows participants to pay certain qualified medical, dental and vision expenses with tax-free income, and The Dependent Care FSA allows participants to pay certain work-related dependent (day care) expenses with tax-free income. You may elect to contribute a portion of your before-tax income each pay period to either or both of the accounts. This tax-free money is used to reimburse participants for eligible expenses incurred during the plan year by the participant and qualified family members. The plan year runs from July 1 through June 30. Participants have an additional three months after the plan year (until September 30) to submit claims for reimbursement for expenses incurred within the plan year. 1
The following table summarizes the two types of Flexible Spending Accounts. FLEXIBLE SPENDING ACCOUNTS Health Care FSA Dependent Care FSA Purpose To pay for qualified health To pay for qualified dependent care expenses. care expenses (day care). Covered Medical, dental and vision Expenses for the care of dependent Expenses expenses that qualify as child(ren) under age 13, parent or IRS deductions and are not disabled adult, so that you and your reimbursed by any other spouse can work (or actively look plan. for paid work), or while your spouse attends school full-time. Maximum per year: $2,550 Maximum per year: $5,000* * The maximum annual contribution is the lesser of $2,500 if you are married and you and your spouse file separate income tax returns, your income, or your spouse s income. ELIGIBILITY If you are eligible to participate in the medical insurance program you are also eligible to participate in the Flexible Benefit Plan. You are not required to participate in the medical insurance program to participate in the Flexible Spending Accounts. ENROLLMENT If you pay qualified premiums by payroll deduction, you will be automatically enrolled in Premium Conversion. You enroll for the FSAs by completing the appropriate Enrollment Form provided to you by the Payroll Department. You may elect to contribute to one or both of the FSAs. IF YOU DO NOT ENROLL WHEN FIRST ELIGIBLE If you do not elect to participate in the FSAs when you are first eligible, you will not be able to elect to participate in either account during that plan year (July 1 through June 30), unless you experience a qualified status change that allows you to elect to participate. Unless you have a qualified status change, you must wait until the next open enrollment period to enroll. 2
WHEN PARTICIPATION BEGINS Your participation in the Premium Conversion Plan begins when coverage under a qualified insurance plan begins. As long as you enroll when you are first eligible (normally within 30 days from your date of hire), your FSA participation will begin on your date of hire, however reimbursement of any eligible expenses will not be possible until the first deduction of your plan participation has occurred. If you wait to enroll during a subsequent open enrollment period, participation begins on the next July 1. QUALIFIED STATUS CHANGES Generally, once you are enrolled, your participation in Premium Conversion and the FSAs must remain in effect through the following June 30 -- meaning you may not start or stop contributions or change your contribution amount under any circumstances -- unless you experience a qualified change in status that permits a change in your participation under Section 125 of the Internal Revenue Code. Examples of qualified status changes include marriage or divorce, loss of a dependent, birth or adoption of a child, changes in employment status, or unpaid leave of absence. An additional set of rules applies to the Dependent Care FSA. If you begin using workrelated day care, stop using day care, or if your costs for day care change during a plan year, you may make a corresponding change to your participation in the Dependent Care. You have 30 days from the date of a qualified status change to make allowable changes in your participation in insurance coverages under the Premium Conversion Plan or your FSAs, if any, by contacting the Payroll Department and completing the required form. Your new election must be on account of, and consistent with your qualified status change. If you do not notify the Payroll Department of a qualified status change, and your intent to make a corresponding change in benefits, within 30 days after the event, you will not be permitted to change your benefits until the earlier of the date of your next qualifying status change or beginning of the next plan year. Requests for changes submitted before the date of a qualified status change must be confirmed in writing within 30 days after the event. Failure to follow these rules imposed by the Internal Revenue Code could cause you to continue to make contributions beyond the date you have eligible expenses, but no longer than through the remainder of the plan year. This applies to both Premium Conversion and the FSAs. 3
BEFORE-TAX CONTRIBUTIONS Contributions under the Flexible Benefit Plan are made by payroll deduction from your salary before federal income and Social Security (FICA) taxes are withheld. State and local tax laws vary as to their treatment of tax-free contributions. Your Premium Conversion contribution is equal to your share of the premiums. Flexible Spending Account contributions are limited: MINIMUM AND MAXIMUM CONTRIBUTIONS Health Care FSA Dependent Care FSA Annual Minimum Contribution $200 $200 Annual Maximum Contribution $2,550 $5,000 The IRS imposes special limits on contributions to dependent care accounts. These limits are described later in the certificate. ESTIMATE EXPENSES CAREFULLY It is important to estimate expenses carefully before you decide how much to contribute to a Flexible Spending Account. UNEXPENDED BALANCES Health Care FSA Historically, unused funds were forfeited under the use-it-or-lose-it rule. Our plan has adopted an amendment that will allow employees participating in the Health Care FSA to carry forward up to $500.00 in unused funds into the next plan year. You have until September 30 th to file claims for expenses incurred during the current plan year or July 1 st through June 30 th. If after the final accounting you have leftover (unused) money available, up to $500.00 can be added to your available balance for the new plan year. You must be enrolled in the FSA for the new plan year for the money to roll forward. For example, if you contribute $600 to your Health Care FSA and incur eligible claims totaling only $500, the remaining $100 will be added to your new year balance after the three month claim filing grace period following the plan year end, usually in October. There would be no forfeitures unless your unused amount exceeds $500. Dependent Care FSA - You will forfeit any account balance that is not used to pay eligible expenses incurred during the plan year, which runs from July 1 through June 30. Under IRS rules, you cannot receive a refund of any unused balance, transfer amounts between accounts, or carry funds over from one year to the next. Forfeited amounts are applied toward the Flexible Spending Accounts administrative costs. 4
You have until September 30 following the end of the plan year to submit requests for reimbursement (claims) to the Flexible Spending Account administrator. CONTRIBUTION IN EFFECT FOR THE ENTIRE PLAN YEAR During the plan year, you cannot change the annual amount you decide to contribute to a Flexible Spending Account (unless you experience a qualified status change). The Flexible Spending Account Worksheet at the end of this certificate will help you figure out how much you might want to contribute. 5
EXAMPLE OF HOW FLEXIBLE SPENDING ACCOUNTS SAVE YOU TAX DOLLARS * An employee with a salary of $45,000 a year has coverage for herself and her two children under the medical plan. She contributes annually: $700 to the Health Care FSA to pay for her family s health care expenses not covered by the medical plan. $3,000 to the Dependent Care FSA to help pay for day care for her children. Here is how this employee saves $831 by using the Flexible Spending Accounts: Without With FSAs FSAs Annual Salary $45,000 $45,000 Health Care FSA contribution 0-700 Dependent Care FSA contribution 0-3,000 Taxable income $45,000 $41,300 Federal income taxes 1-3,011-2,464 Social Security taxes (FICA) 2-3,443-3,159 Expenses eligible for reimbursement: a) Family medical and dental expenses - 700-700 b) Dependent day care expenses - 3,000-3,000 Reimbursement from: a) Health Care FSA 0 + 700 b) Dependent Care FSA 0 +3,000 Net Annual Income $34,846 $35,677 Tax Savings $ 831 * This example excludes state and local taxes. Your total tax savings will depend on your family income, your actual tax bracket, and how much you contribute to the Flexible Spending Accounts. 1 Standard head of household deduction and three personal exemptions at 2013 IRS rates. 2 Because contributions to the Flexible Benefit Plan are not subject to FICA withholding, future Social Security benefits may be reduced for those employees who pay less than the Social Security maximum. There is no reduction in Social Security benefits for employees who pay the maximum Social Security taxes. 6
HEALTH CARE FSA This account is for eligible medical, dental and vision expenses that are not reimbursed by any other plan. For Health Care FSA purposes, your eligible family members are your spouse, your children or any individual you claim on your tax return as a dependent. ELIGIBLE HEALTH CARE EXPENSES As a general rule, any health expense that would qualify as a deduction on your federal income tax return -- other than insurance premiums and long-term care expenses -- qualifies as an eligible expense under the Flexible Spending Account. Examples of eligible expenses are listed later in this section. By submitting an expense for reimbursement from your Health Care FSA, you are certifying that the expense was not reimbursed by any other plan or insurance and will not be used as deductions on your federal tax return. An expense must be properly documented. WHEN HEALTH CARE EXPENSES MUST BE INCURRED Eligible health care expenses must be incurred during the same plan year (July 1 - June 30) for which you make your contribution to the Health Care FSA. Expenses incurred before your participation began or after the close of the plan year are not eligible for reimbursement from that year s contribution. Expenses are "incurred" when services are rendered, not when you pay the expense. In most cases, if your participation ends during the plan year, expenses incurred after your participation ends cannot be reimbursed through the Health Care FSA. EXAMPLES OF ELIGIBLE HEALTH CARE EXPENSES The following list of health care expenses eligible for reimbursement is based on current tax law interpretations. To be sure that an expense is eligible, check the current Internal Revenue Service guidelines or call the Payroll Department for additional clarification. Eligible health care expenses include: Medical services provided by medical practitioners; Charges for medically necessary services not reimbursed by medical, dental or vision plans, including but not limited to the following: Deductibles, Copayments, Coinsurance, 7
Charges exceeding reasonable and customary levels, and Charges exceeding plan limits; All medically necessary prescription drugs (including contraceptives and pre-natal vitamins); Eye exams, glasses (frames and lenses), contact lenses and related solutions; Dental implants; Hearing exams, hearing aids; Cost differences between semi-private and private hospital rooms; Costs for special medical equipment installed in your home, or for home improvement for purposes of medical care, e.g. ramps, support bars, railings, etc.; Fees for special schools on the recommendation of a physician, including schools for the mentally impaired, physically disabled or individuals with severe learning disabilities; Transportation (amounts paid for travel primarily for, and essential to, medical care); Personal use items if primarily used to prevent or alleviate a physical or mental defect or illness, e.g., wigs for cancer patients, Braille books, hearing aids; and Nursing service in a hospital, nursing home or your home. Over the Counter Medication with a Doctor s Prescription Certain expenses are eligible with a doctor s note explaining the medical reason for the OTC drug (Must have a diagnosis to be covered). These are for the treatment of a condition that is deemed medically necessary. Such expenses include, but are not limited to: Acne Treatment Dietary Supplements Herbal Supplements Pads for Shoes Sunscreen Vitamins Weight-loss Drugs Ineligible expenses include, but are not limited to: Cosmetics Medicated Shampoo Sunscreen Toiletries Toothpaste Vitamins (for general health) 8
INELIGIBLE HEALTH CARE EXPENSES Expenses that may not be paid through the Health Care FSA include: Contributions to insurance plans (contributions to qualified plans are already made on a tax-free basis through Premium Conversion); Costs you deduct as health care expenses on your federal income tax return; Expenses not eligible to be deducted from your federal income tax return; Expenses reimbursed by any other plan; Health club membership dues; Cosmetic procedures (electrolysis, hair removal or transplants, liposuction, face lifts, etc.); Vitamins; Prescription drugs that are not medically necessary (such as Rogaine, and Retin-A); Cosmetic dental work (such as bleaching, bonding, and veneers); Undocumented travel to and from your physician s office or other medical facility; Weight loss programs unless for treatment of a specific condition; Smoking cessation programs; and Long term care services. 9
REIMBURSEMENT FROM THE HEALTH CARE FSA To receive a reimbursement, you must submit a Flexible Benefits Reimbursement Claim Form. SUBMITTING A FLEXIBLE BENEFITS REIMBURSEMENT CLAIM FORM: IF YOU HAVE INSURANCE COVERAGE OFFERED BY THE DISTRICT: All medical receipts first must be filed with your primary insurance company, and if applicable with your secondary insurance coverage. The insurance company(s) will then provide you with an Explanation of Benefits (EOB), which will be necessary for the submission and subsequent reimbursement of the expenses you incurred. The original EOB will be necessary to receive reimbursement. Pharmacy receipts received from local pharmacies will also need to be sent to the Blue Cross Blue Shield Insurance Company or other if applicable, in order to obtain the Explanation of Benefits (EOB) form. These receipts are applied to your deductible if it has not been met, or if all deductible has been applied then you may receive additional payment from BCBS on the prescription cost. The original EOB is the document necessary for reimbursement from your flex account. For the 90 day prescriptions, you would submit the statement that you are provided. Upon the proper submission, you will be reimbursed the patient responsibility amount. If you have Dental Insurance, an Explanation of Benefits (EOB) will also be necessary to receive reimbursement. For the Vision Insurance, the statement received from the carrier will be the only documentation that is received, this will be the required information for the reimbursement of these expenses. IF YOU HAVE OTHER INSURANCE: The insurance company will provide you with an Explanation of Benefits (EOB), which will be necessary for the submission and subsequent reimbursement of the expenses you incurred. The original EOB is the only documentation required to obtain reimbursement. Turn in the original receipt that you obtain from the pharmacy to 10
receive reimbursement for prescriptions. (This should reveal the price, date and the description of the prescription). IF YOU DO NOT HAVE INSURANCE COVERAGE: To receive reimbursement for eligible health care expenses that are not covered by an insurance company, it will require the filing of a Reimbursement Claim Form, accompanied by an original receipt as proof of payment, and you will be reimbursed the amount you paid, from your Flex Account balance. Write on the receipt, not covered by insurance. The receipt should include the following: Name of the Provider (Doctor, company, etc.) Date of Service Services rendered (Eye glasses, contact lenses, dental treatment, etc.) Amount charged Amount Paid To obtain reimbursement for eligible Over-the-Counter Medications, simply submit a claim form with an original cash register receipt showing the name of the item, the date of purchase and the amount paid. Please circle the item in pen for which you are requesting a reimbursement and provide a description of the item if it is not fully described on the receipt. Include the required doctor s note. If the cash register receipt does not clearly reflect the name of the item, it will be necessary to include the UPC and packaging to verify the item for reimbursement. Do not submit Over the Counter items to the medical insurance company. Photocopies of the Explanation of Benefits or cash register receipts will not be accepted. Reimbursement Claim Forms are available on the Bay District School Web Site. Only one Reimbursement Claim Form is necessary for submission of receipts. Only expenses which are adequately documented will be processed for reimbursement. 11
AMOUNT OF YOUR REIMBURSEMENT The Health Care FSA will reimburse your eligible expenses up to your anticipated contributions for the plan year. The minimum check amount is $25; therefore, you should wait until your expenses total $25 before requesting reimbursement. Claim submissions of less than $25 may be held until the accumulated reimbursement is at least $25 or until June of each plan year. LAST DATE FOR REQUESTING REIMBURSEMENT You have until September 30 of the year following the plan year to request FSA reimbursement of eligible expenses incurred during the plan year. Claims submitted during the three months following the plan year will not be subject to the $25 minimum. 12
DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT You may use the Dependent Care FSA to pay for qualified dependent care expenses that enable you (and your spouse if you are married) to work or actively look for paid work. You may also qualify if your spouse is disabled or a full-time student. DEPENDENT CARE FSA VERSUS CHILD CARE TAX CREDIT If you are responsible for the care of a dependent child or adult, you may save more by using the Child Care Tax Credit instead of the Dependent Care FSA. (You may not use the FSA and the tax credit for the same expenses.) Your tax bracket and the amount of expenses you incur will determine which tax-saving approach is best for you. Generally, if your family income is less than $25,000, the federal tax credit may be more beneficial. You should consult your personal tax advisor for more information. IRS LIMITS ON DEPENDENT CARE FSA CONTRIBUTIONS IRS regulations state that the maximum you may contribute to a Dependent Care FSA in a calendar year is the lesser of: $5,000 if you are married and you and your spouse file a joint tax returns $2,500 if you are married and you and your spouse file separate tax returns; Your taxable annual taxable income; or Your spouse s annual taxable income. If your spouse is a full-time student for at least 5 months of the year or is disabled, the guidelines consider your spouse s income to be $200 per month if you have one dependent and $400 per month if you have two or more dependents. This is applicable during the period in which your spouse attends school. IRS regulations also state that the maximum any one family can contribute to a Dependent Care FSA in a year is $5,000. If both you and your spouse have access to a Dependent Care FSA, your combined contributions to both plans must not exceed $5,000 per calendar year. In addition, any amount that you have contributed to a Dependent Care FSA with a former employer counts towards the $5,000 annual maximum. 13
ELIGIBLE DEPENDENT CARE EXPENSES To qualify for reimbursement from the dependent care account, expenses must be incurred in caring for individuals you claim as dependents on your federal tax return including: Children under 13 years of age whom you may claim as dependents; Your spouse or any other person of any age who is physically or mentally unable to care for himself or herself and whom you are entitled to claim as a dependent. Examples of eligible expenses are listed later in this section. WHEN DEPENDENT CARE EXPENSES MUST BE INCURRED Eligible dependent care expenses must be incurred during the same plan year (July 1 - June 30) for which you make your contribution to the Dependent Care FSA. Expenses incurred before your participation began or after the close of the plan year are not eligible for reimbursement from that year s contribution. If your participation ends during the plan year, you may continue to be reimbursed from the remaining balance of your dependent care account for expenses incurred through the end of the Plan year. EXAMPLES OF ELIGIBLE DEPENDENT CARE EXPENSES The following list of dependent care expenses eligible for reimbursement is based on current tax law interpretations. To be sure that an expense is eligible, check the current IRS Publication 503, Child and Dependent Care Expenses, or call the Payroll Department. Please note: The Dependent Care FSA cannot be used for health care expenses incurred by your dependents. However, dependent s health care expenses may be eligible for reimbursement through the Health Care FSA. Eligible dependent care expenses include: Care at licensed nursery schools, day camps (not overnight camps), pre-school (not kindergarten), after-school programs at first grade and beyond, and day care centers for dependent adults or children. To qualify, the school or center must comply with state and local laws and receive a fee for its services; Care provided inside or outside the home by individuals. These individuals cannot be dependent children under age 19; Household services related to the care of eligible dependents who live with you; or Any other qualified dependent care expense as defined by the Internal Revenue Code. 14
INELIGIBLE DEPENDENT CARE EXPENSES The following expenses do not qualify for reimbursement through the Dependent Care FSA: Tuition; Baby-sitting; Overnight camp; Kindergarten; Boarding School; Care provided by your children under age 19; or Expenses for a non-working spouse who is neither disabled nor a full-time student. REIMBURSEMENT FROM THE DEPENDENT CARE FSA For reimbursement from your Dependent Care FSA, submit a bill for qualified services along with a Flexible Benefits Reimbursement Claim Form to the Payroll Department. By submitting an expense for Flexible Spending Account reimbursement, you are certifying that the expense was not reimbursable by any other plan and will not be used as deductions or credits on your federal income tax return. AMOUNT OF YOUR REIMBURSEMENT You will be reimbursed for the eligible service only up to the amount actually in your account at the time the Payroll Department receives your request. If your request exceeds your current balance, The Payroll Department will initially reimburse the amount of your balance (if any). Then, as additional money is contributed to your account through payroll deductions, you will continue to be reimbursed automatically for the amount in your account until the entire request is paid (up to the total amount of contributions made during the plan year). When you submit a Flexible Benefits Reimbursement Claim Form, please follow these guidelines: The minimum check amount is $25; therefore, you should wait until your expenses total $25 before submitting a claim. Claim submissions of less than $25 will be held until the accumulated reimbursement requested is at least $25 or until June of the plan year. You must show that payment has been made by submitting a bill or receipt with your caregiver s name, address, tax identification number, dates and cost of services rendered. If you wish, a properly completed Flexible Benefits Reimbursement Claim Form with the above information and the caregiver s signature is acceptable. A canceled check is not acceptable documentation of your expense. 15
Send the Flexible Benefits Reimbursement Claim Form along with appropriate documentation to the address on the form. LAST DATE FOR REQUESTING REIMBURSEMENT You have until September 30 of the year following the plan year to request Flexible Spending Account reimbursement of eligible expenses incurred during the plan year. Claims submitted during the three month following the plan year will not be subject to the $25 minimum. REPORTING YOUR DEPENDENT CARE FSA PARTICIPATION Currently, IRS rules affect how your taxes are reported if you use before-tax FSA money to pay for dependent care expenses. Basically, IRS rules require the following: Your annual W-2 statement must report any before-tax salary amounts you contribute to the Dependent Care FSA for that calendar year. You must file the name, address and taxpayer I.D. or Social Security number of your dependent care provider with your federal tax returns. CONTINUATION OF PARTICIPATION IF YOU BECOME DISABLED Your before-tax Flexible Benefit Plan contributions will continue if you are covered by a salary continuation program. If you are not eligible to participate in a salary continuation program or you don t return to work once your salary continuation ceases, your before-tax contributions will cease (unless you prepay contributions under Family and Medical Leave Act provisions as described below), and: If you have a Health Care FSA, you may receive reimbursement for your total annual amount for expenses incurred before your contributions ceased (less any reimbursement already made). You or your qualified beneficiaries may be eligible to continue your Health Care FSA on an after-tax basis for the remainder of the plan year under Consolidated Omnibus Budget Reconciliation Act (COBRA). If you have a Dependent Care FSA, you may continue receiving reimbursement for the remaining balance for eligible expenses incurred before your contributions ceased. 16
FAMILY AND MEDICAL LEAVE ACT (FMLA) If you are covered by the FMLA, you may elect to continue your before-tax contributions for qualified insurance premiums or the Health Care FSA by prepaying them for the period of your absence. You receive reimbursement for eligible expenses incurred during your absence. If you prepay before-tax contributions, you must authorize a lump-sum payroll deduction before your salary continuation period ends. Call the Payroll Department for details. WHEN PARTICIPATION ENDS Your Flexible Benefit Plan participation will end in the situations described below: IF YOU DISCONTINUE CONTRIBUTIONS WHILE IN ACTIVE SERVICE If you discontinue contributions to an FSA as a result of a qualified status change but remain employed, only expenses incurred before contributions ceased are eligible for reimbursement for both the Health Care and Dependent Care FSAs. If you have a Health Care FSA, you may receive reimbursements up to your elected amount (less any prior reimbursements). If you have a Dependent Care FSA, you may receive up to your remaining balance. IF YOU TAKE AN AUTHORIZED UNPAID LEAVE OF ABSENCE Your before-tax contributions to a Flexible Spending Account will cease on the day you begin leave (unless you prepay Health Care FSA contributions under Family and Medical Leave Act provisions as described below), and: If you have a Health Care FSA, you may receive reimbursement up to your elected amount (less, of course, any amounts that have already been paid) only for expenses incurred before your leave began. However, you may choose to pay your Health Care contribution on an after-tax basis during your leave, and receive reimbursement for expenses incurred during the leave. If you make the required Health Care contributions, you can continue your Health Care FSA for the remainder of the plan year. If you have a Dependent Care FSA you may receive reimbursement up to your remaining balance for expenses incurred before your leave began. When you return to work in the same calendar year, your Flexible Spending Account participation will be reinstated automatically with the same before-tax contribution in effect before you left. 17
LEAVE COVERED BY FAMILY AND MEDICAL LEAVE ACT (FMLA) If you take an authorized unpaid leave of absence that is covered by FMLA, you may elect to continue your before-tax contributions for premiums or the Health Care FSA by prepaying them for the period of the leave. If you prepay before-tax contributions, you may receive reimbursement for eligible expenses incurred during the leave. If you make the required Health Care contributions, you can continue your Health Care FSA for the remainder of the plan year. To prepay before-tax contributions, you must authorize a lump-sum payroll deduction prior to the start of your leave. Call the Payroll Department for details. IF YOU LEAVE EMPLOYMENT OR RETIRE Your before-tax contributions to an FSA will cease on the day you cease active employment and: If you have a Health Care FSA, you may receive reimbursement for eligible expenses incurred up to the date contributions cease. Any reimbursements will be limited to the elected amount less any reimbursements already made. You or your qualified beneficiaries may be eligible to continue your Health Care FSA on an aftertax basis under Consolidated Omnibus Budget Reconciliation Act (COBRA) through the end of the plan year. If you have a Dependent Care FSA, you may continue receiving reimbursement for the remaining balance for eligible expenses incurred before active employment ended. IF YOU LEAVE AND ARE REHIRED If you leave employment and are rehired within the calendar year, your participation will be reinstated automatically with the same before-tax contributions in effect before you left. IF YOU DIE Your before-tax contributions will end on the date of your death. Your family may receive reimbursement from the Health and/or Dependent Care FSA for eligible expenses incurred before your death. For the Health Care FSA, reimbursements may be made for eligible expenses incurred during the plan year up to the elected amount less any previous reimbursements. Your qualified beneficiaries may be eligible to continue your Health Care FSA on an after-tax basis under Consolidated Omnibus Budget Reconciliation Act (COBRA). For the Dependent Care FSA, expenses may be reimbursed up to the remaining balance. 18
ADDITIONAL INFORMATION QUARTERLY STATEMENT When you participate in a Flexible Spending Account, you will receive a statement each quarter informing you of the status of your account. The quarterly statement shows your balance as of the statement date, your total contributions, reimbursements and the dates on which reimbursements were made. IMPACT ON YOUR OTHER BENEFITS The before-tax salary amounts you contribute to an FSA do not affect your other salarybased benefits. For example, if your salary is $32,000 and you contribute $3,000 to an FSA, your other salary-based benefits (retirement, life insurance, disability insurance, etc.) are based on your full salary of $32,000. FLEXIBLE SPENDING ACCOUNT WORKSHEET The worksheet on the following page can help you estimate how much you might want to consider contributing to the accounts. Before using this worksheet, be sure to review the description of eligible health care and dependent care expenses. 19
FLEXIBLE SPENDING ACCOUNT WORKSHEET HEALTH CARE ACCOUNT 1. Your deductibles and/or copayments under the medical plan $ 2. Your deductibles and/or copayments under the dental plan $ 3. Other anticipated health care expenses not paid by the $ medical or dental plan or any other health plan. Total Health Care Expenses $ DEPENDENT CARE ACCOUNT If care is at your home: 1. Wages or salary paid to care provider. $ 2. FICA and other taxes paid on behalf of care provider. $ 3. Payments for household services related to care. $ Combined Expenses for In-Home Day Care: $ If care is outside your home: 1. Payments to qualified day care facility. $ 2. Payments to other care providers. $ Combined Expenses for Out-of-Home Day Care: Total Dependent Care Expenses: $ $ The totals are amounts you may want to consider putting in the accounts (up to the various limits on contributions). It may make sense to pay these expenses with beforetax dollars, since you will be paying them anyway. In estimating how much to contribute to each account, remember that amounts you put aside in a Flexible Spending Account but do not use are forfeited. 20