Flexible Spending Account Columbia County Board of Education

Introduction

Columbia County Board of Education sponsors a Flexible Benefit Plan designed to save you money. The purpose of this notice is to solicit your interest and inform you of an innovative way to save money.

Under this Flexible Benefit Plan you may establish a Flexible Spending Account (FSA) that allows you to have a portion of your income set aside on a pretax basis for the payment of: 

• Expenses that are not reimbursed by the Medical and Dental plans. (Coverages are limited to a combined maximum of $5,000.00)
• Dependent/Child Care as defined under Section 129 of the Internal Revenue Code, up to $5,000.00 annually ($2,500.00 if you file separately) for the care of children up to the age of thirteen or for the care of a mentally or physically disabled qualifying dependent.

The following information provides a general outline of your benefits under this Plan. The wording is designed to be easily understood.

By setting aside amounts of money from your gross income, your actual taxable income will decrease by as much as 40% because taxes for federal withholdings, state withholding (excluding NJ residents), and FICA (social security/Medicare) will be applied to a reduced gross income. You have the option to decide exactly how your benefit dollars are spent. For example, you might elect to withhold $100 a week to fund the payment of a day-care center to care for your child while you work.

Example #1: Salary $30,000.00
Employee with Two Dependent Children

This employee faces orthodontia expenses on both children that will be paid by the Dental Plan at 50%. The dentist has estimated the initial annual costs for this procedure at $1,000.00 for each child (total $2,000.00) and the dental work will be performed during the plan year. Because the dentist's fee will total $2,000.00 and the dental plan will pay a total of $1,000.00, there will be an estimated out-of-pocket cost of $1,000.00. This employee will consider enrolling for the $1,000.00 that is not covered by the Dental Plan. The employee has both a schedule and an estimate of expenses from the dentist and, therefore, knows the dental expenses. As this expense is to be incurred this year, forfeiture (see below) is not a concern.

The Dental expenses not reimbursed, shown in the example above, may consist of any expenses that are eligible for tax deduction as defined by the Internal Revenue Service, as long as they aren't payable under any Dental Plan. These would be expenses that fall into the deductible area, or dental expenses that you know in advance will be in excess of the plan's maximum. But, you must select the amounts very carefully, because the law governing this benefit requires all unused amounts to be forfeited.

Example #2: Salary $30,000.00
Employee with Two Dependent Children

This employee must pay to have two children in day school during working hours. The day-care center charges $97.00 for the first child, but only $10.00 for the second. The weekly total for this service is $107.00. Annually, this amounts to $5,564.00. Therefore, this employee will consider setting aside $5,000.00, which is the IRS maximum for Child Care deductions (see below). As this expense is to be incurred throughout the year, forfeiture is not a concern.

The Child Care expenses not reimbursed, shown in the example above total $5,564.00. The IRS will allow a maximum deduction of $2,500.00 or $5,000.00, depending on whether income taxes are filed jointly or separately. As this employee is single, this concern doesn't apply. The $5,000.00 maximum is allowable. To be considered an eligible expense, the person or institution performing the service must report this income when filing a tax return.

* The amount you can claim under the dependent care tax credit is reduced for every dollar that is contributed.

Medical & Dependent Flexible Spending Accounts (FSAs)
General Questions & Answers

What is an FSA?
Medical & Dependent Care Flexible Spending Accounts (FSAs) are great ways to reduce your cost significantly for those medical services and supplies that are not covered by insurance or those expenses for which you have no insurance coverage.

Why is an FSA better than paying for my Medical Expenses out of my own pocket?
The reason is simple TAXES! By Federal and State law, the dollars you deposit into your FSA are free of Federal Income, State Income (except for NJ residents), and Social Security/Medicare Taxes. For example, if your Federal tax rate is 20% and you incur a $100.00 uninsured medical expense, you would have to earn $138.22 just to pay the $100.00 expense. However, if you elect to use an FSA, you can have the $100.00 deducted from your paycheck, free of Income Taxes. As a result, you will have an extra income of $27.35.

Can't I deduct Medical Expenses on my tax return?
Medical expenses that are not reimbursed can be deducted on your Federal Income Tax Return, but (1) only if you itemize deductions and (2) only those expenses that are in excess of 7.5% of your adjusted gross income (AGI) may be deducted. For example, if your adjusted gross income is $25,000, then only those expenses in excess of $1,875.00 may be deducted. Thus, in most cases, the MFSA will be the only way to pay for medical expenses that are not reimbursed without also paying Federal income taxes.

What kind of expenses can I pay through my FSA?
As long as you have not been reimbursed for the expense from any other source, you can be reimbursed for any medical, vision, or dental bills that you have paid for yourself, your spouse, or your dependents. Examples of expenses that can be paid through your FSA include:

For a complete list of eligible expenses click here.

This is only a partial list. In fact, any item that is treated as a medical expense for Federal income tax purposes can be reimbursed through your FSA.

How does an FSA work?
Each FSA is similar to a checking account. To fund your accounts, contributions will be deducted from your paycheck automatically throughout the year according to the amount you elect during your annual enrollment period.

How do I get reimbursed from my accounts?
For non-debit card claims, just ask your Benefits Coordinator for a claim form , or get one from our website at www.flex125.com, fill it out, enclose a copy of the bills for each expense, and mail or fax to the offices of AmeriFlex. Remember to keep a copy of the claim form/voucher for your records.

You can include several different expenses for each account on one claim form, but you must send us a copy of the bill/receipt for each expense.

If you are submitting expenses that were denied or only partially reimbursed under an insurance plan, you should also include a copy of the Explanation of Benefits (EOB) statement from that plan.

If your expense is approved, you can expect payment no later than 10 business days from the date that the claim was submitted. Checks will be mailed directly to your home address.

What if, at the end of the year, I still have money left in my account?
IRS Regulations force you to forfeit any unused FSA balances at the end of each plan year. We cannot convert these funds into cash, or transfer them to your next years account. The intent of the IRS regulation is clear: Use it or lose it.

I am covered under my spouses health insurance plan, and my spouse does not work here. May we still participate as a family in an FSA?

Yes, you can still participate in a Medical and/or Dependent Care FSA Program even if your health coverage is through another employer.

When can I change my FSA election?
Each plan year you will have the opportunity to make new choices for the following year. NO CHANGES ARE ALLOWED during your plan year unless you have a life event commonly known as a Change in Family Status.

If you choose to participate in the medical and dental plan AmeriFlex will provide you a credit card to pay qualifying medical and dental expenses or you can choose to send in a paper claim form for reimbursement. If you choose to participate in the dependent care plan you must send in the paper claim form for reimbursement. You can choose to have your reimbursement directly deposited into your account vs. receiving a check by completing the direct deposit form.

The plan year starts on January 1st and ends on December 31st.  You have until March 15th of the following year to exhaust funds from the prior year.  Remember unused funds are not reimbursable to you. Use it or lose it.

You can go to this web site www.theflexcard.com for additional information and check your paid benefits and balance at anytime or contact AmeriFlex at 1-888-868-FLEX.