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Products - Flexible Benefits Plan EmployeeEnjoying More of Your Money This YearSometimes referred to as a Section 125 plan, a cafeteria plan or a flex plan, a Flexible Benefits Plan lets you set aside a certain amount of your paycheck into designated accounts before paying income taxes. During the year, you have access to this money for reimbursement of out-of-pocket expenses such as health care and dependent day care. When you use tax-free dollars to pay for these expenses, you realize an increase in your spending power and substantial tax savings. To learn more, Employee Savings Example (pdf 15 kb) What Benefits Are Included in a Flexible Benefits Plan?Depending of the plan design adopted by your employer, you may be able to participate in one (1) or more of the following Flexible Benefit Plan components: • Premium Conversion. This component allows you to pay employer-provided health and other insurance premiums with tax-free dollars. Generally, if you are covered under employer-provided coverage, you automatically will be enrolled in this component. •
Health Care Flexible Spending Account. This component allows you to reimburse yourself for health
care expenses not covered by insurance. You set aside money, tax-free, through regular payroll
deduction. During the year, you can be reimbursed for those qualified health care expenses
incurred that are not covered by insurance, even if you have not contributed enough to cover those expenses.
For a list of qualified expenses,
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Dependent Care Flexible Spending Account. This component allows you to reimburse yourself for
daycare expenses for eligible children and adults. Through regular payroll deductions, you set
aside part of your income to pay for these expenses on a tax-free basis. To qualify, your
dependents generally must be either (a) under the age of thirteen (13) or (b) a child, spouse or other
dependent who is physically or mentally incapable of self-care and spends at least eight (8)
hours per day in your household. For a list of qualified expenses,
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Please be aware that a dependent care credit is available on your annual tax return. Whether or not
to participate in this component of a Flexible Benefits Plan depends on your income, filing status,
number of dependents and annual day care expenses. You will receive your tax savings throughout the
year, rather than once a year when filing your tax return.
• Adoption Assistance Flexible Spending Account. This component allows you to reimburse yourself for eligible expenses incurred in the adoption of a qualified child. These expenses include reasonable and necessary legal adoption fees, court costs and attorney fees. • Health Savings Account. Although this account generally is established with a bank or other institution, this component allows you to contribute to a health savings account through the plan on a pre-tax basis. Frequently Asked QuestionsWhy should I participate in a Health Care Flexible Spending Account?
This account is used to pay for expenses not covered by insurance. For example, non-covered expenses may
include co-payments, eye exams, glasses, orthodontics, prescription and over-the-counter drugs and medications,
to name a few.
If I set aside part of my pay, won’t I make less money?
No. Typically, your take-home pay will increase by the amount of taxes you did not pay.
Can I change my contributions during the year? Flexible Spending Accounts. Only if you experience a "change-in-family-status" event, such as marriage, birth, adoption, death or a change in your, your spouse's or your dependent's employment status.
Health Savings Accounts. Generally, you may increase, decrease, start or cease contributions at any time during the plan year.
What if I currently take the dependent care credit on my annual tax return?
Whether or not to participate in the Dependent Care Flexible Spending Account component of a Flexible
Benefits Plan depends on your income, filing status, number of dependents and annual day care expenses.
The amount you redirect to this account reduces the amount dollar-for-dollar that you may claim as a credit
on your tax return. How do I get reimbursed for my expenses? Once you have completed an enrollment form and you are a plan participant, there are three (3) ways of filing a reimbursement request. You may complete a hard copy reimbursement request form, attach a copy of the health care or dependent day care bill, receipt, EOB, etc., and mail or fax the form to us. You may file your claim online, save/submit/print/sign your claim form, and mail or fax the form to us with the health care or dependent day care bill, receipt, EOB, etc. And, if your employer provides this option, you may use a debit card. If you file a claim by Tuesday afternoon, you generally will receive a check or direct deposit by Friday. Do I have to wait for the money to be deposited in my account before I make a claim? The annual amount you have elected for your Health Care Flexible Spending Account, less earlier reimbursements, is available to you at any time throughout the plan year. The amount available to you from your Dependent Care Flexible Spending Account or Adoption Assistance Flexible Spending Account is the amount you have contributed to date, less earlier reimbursements. How do I know how much is available in my account(s)? Each time you are reimbursed, your check will include a statement indicating the dollar amount you have set aside, as well as the amount you have been paid to date. Also, you may access your account via the Internet at any time. What happens to my account(s) if I terminate employment? Generally, you will be able to request reimbursement for health care and day care expenses for services provided prior to your termination. You should check your Summary Plan Description for any additional rights or benefits provided by your plan. What if I don’t use all the money I set aside? Carefully review your estimated expenses prior to making the decision to participate. Generally, any contributions not used during the plan year may not be paid to you in cash or used in a later plan year. However, depending on plan design, you may have an additional period following the end of the plan year in which to incur expenses and request reimbursement. What if I am not covered under my employer's health insurance plan? As long as you are eligible for insurance coverage under your employer's plan, even if you decline coverage, you and your family may still participate in the flexible spending account components of a Flexible Benefits Plan. How do I benefit from participation? Your greatest benefit is the tax savings. Every dollar you set aside reduces your income taxes and you can be reimbursed tax-free for qualified expenses that have already been paid. Are there any negatives that I should know about? Yes. Because you are not paying social security taxes on that portion of your income that has been redirected, your social security benefits may be reduced slightly. Nevertheless, you likely will receive a greater benefit through participation in these pre-tax benefits |
