Transcript NEW! FLEXIBLE SPENDING ACCCOUNTS IN 2008

NEW!
FLEXIBLE SPENDING
ACCOUNTS IN 2008
FOR TRUST FUND EMPLOYEES
FLEXIBLE SPENDING
ACCOUNTS
 A Flexible
Spending Account (FSA) allows
you to set aside a portion of your salary to
be used to reimburse yourself for qualified
health care and dependent care expenses.
Your taxable salary is reduced by the
amount deducted from your paycheck to
fund your account(s), resulting in lower
income and Social Security taxes.
FLEXIBLE SPENDING
ACCOUNTS
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Two types of FSAs will be available as of
January 1, 2008
1. Health Care FSA
2. Dependent Care FSA
FLEXIBLE SPENDING
ACCOUNTS

HEALTH CARE FSA
Allows you to set aside a
specified amount of
pretax dollars to be used
for reimbursement of
eligible unreimbursed
medical expenses
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DEPENDENT CARE FSA
Allows you to elect a
specified amount of
pretax dollars for the
reimbursement of
employment-related
dependent care expenses
that you and/or your
spouse (if married) incur
due to your need to work,
look for work, or attend
school full-time
FLEXIBLE SPENDING
ACCOUNTS
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ELIGIBILITY FOR PARTICIPATION
Active indefinite Trust employees who work at
least 40 hours per pay period, or active
temporary employees with appointments of at
least 90 days whose work schedule is at least
40 hours per pay period.
FLEXIBLE SPENDING
ACCOUNTS
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OPEN SEASON ENROLLMENT
NOVEMBER 12 THROUGH DECEMBER 10
 Open
Season enrollment will be online
through CONEXIS at www.conexis.org
 Follow the instructions in the handout –
CONEXIS ~ Online, It’s as easy as 1,2,3 !
FLEXIBLE SPENDING
ACCOUNTS
 2008
annual minimum for either plan:
$250.00
 2008
annual maximum for either plan:
$5,000.00
FLEXIBLE SPENDING
ACCOUNTS
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HOW ACCOUNTS ARE FUNDED
Pre-tax payroll deductions
Funding may have an impact on your cash flow, i.e.,
you essentially “pay twice” for your eligible expenses,
once via pre-tax payroll deduction to fund your
account, and again when you actually incur and pay
the expense. You will realize the FSA’s full benefit
when you receive your tax-free reimbursement.
You cannot transfer funds between the HCFSA and
DCFSA
FLEXIBLE SPENDING
ACCOUNTS
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IMPACT ON YOUR PAY AND OTHER
BENEFITS
Pre-tax FSA contributions will reduce your
taxable wages for income tax purposes
Pay-related benefits (employer-sponsored life,
disability insurance and retirement benefits)
are not reduced
Social Security (FICA) taxes are based on
your reduced pay – future Social Security
benefits may be slightly lower.
FLEXIBLE SPENDING
ACCOUNTS
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The Plan Year begins January 1, 2008
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May incur claims until March 15, 2009
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Must submit claims for reimbursement by April
30, 2009
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You must complete a new election each year
during Open Season.
FLEXIBLE SPENDING
ACCOUNTS
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“QUALIFYING LIFE EVENTS” PERMIT CHANGE
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Birth or adoption of a child
Military deployment
Change in legal marital status
Death of a dependent
Change in dependent eligibility
Change in employment
Change in child/elder care provider or significant cost
change
Change in employment affecting eligibility for benefits.
FLEXIBLE SPENDING
ACCOUNTS
HEALTH CARE FLEXIBLE SPENDING
ACCOUNTS (HCFSA)
 Allows
you to set aside a specified amount
of pretax dollars to be used for
reimbursement of eligible unreimbursed
medical expenses.
HCFSA
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ELIGIBLE DEPENDENTS
HCFSA expenses must be for you, your
spouse, your child or a tax-qualified
dependent.
A tax-qualified dependent is someone for
whom you can claim a federal tax exemption.
HCFSA
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COST SAVINGS EXAMPLE:
Estimated Eligible Expenses
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Prescription Drug Copays
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Doctor Visit Copays
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Annual Dental Deductible
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Prescription Eyeglasses
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Prescription Sunglasses
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Chiropractor Visits
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Unreimbursed dental expenses
Total
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Est. 30% tax bracket
SAVINGS
Example
$400.00
30.00
50.00
250.00
150.00
300.00
1,000.00
$2,180.00
x .30
$654.00
HCFSA
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EXAMPLES OF HCFSA ELIGIBLE EXPENSES
Over-the-counter medicines (allergy, antacid, aspirin, etc.)
Copayments, coinsurance, and deductibles (not insurance premiums)
Dental care and orthodontia (children and adults)
Vision care (including eyeglasses, contact lenses, saline solution, etc.)
Laser vision correction
Chiropractic care
Diagnostic services
Diabetic supplies
Immunizations
Hearing aids
Orthopedic shoes and inserts
Durable medical equipment … and more
HCFSA
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EXAMPLES OF INELIGIBLE HEALTH CARE
EXPENSES
Expenses that are not deductible on your federal income tax
return
Controlled substances
Cosmetic dental work
Cosmetic surgery
Diaper service
Electrolysis
Health care plan contributions
Health club dues
Vitamins or weight loss aids
HCFSA
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WHEN TO FILE CLAIMS
Claims for unreimbursed medical expenses
can be submitted at any time throughout the
year, regardless of the funding available in
your HCFSA account.
HCFSA
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The request for reimbursement (claim form) is on the
CONEXIS website, www.conexis.org
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HOW TO SUBMIT A HCFSA CLAIM
INCLUDE ONE OF THE FOLLOWING:
Itemized statement from the service provider
Insurance explanation of benefits (EOB)
Pharmacy statement for prescription drugs
Itemized cash register receipt for eligible OTC
medications.
HCFSA
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ITEMIZED STATEMENT MUST INCLUDE:
Nature of the expense (e.g. type of service or
treatment provided), or if an OTC drug, the
receipt must indicate the name of the drug
Date of service
Name of provider
Amount of the expense
Patient’s name
HCFSA
QUESTIONS?
FLEXIBLE SPENDING
ACCOUNTS
DEPENDENT CARE FSA
 Allows
you to elect a specific amount of
pretax dollars for the reimbursement of
employment-related dependent care
expenses that you and/or your spouse (if
married) incur due to your need to work,
look for work, or attend school full-time.
DCFSA
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“QUALIFYING CHILD” DEFINITION
An individual who is a qualifying child of the
employee, (including brother, sister, stepsibling) or descendant of the child (niece,
nephew, grandchild) who shares the same
principal place of abode with the employee for
over half the year and does not provide over
half of his/her support.
DCFSA
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EXAMPLES OF DCFSA ELIGIBLE EXPENSES
 Before and after school care
 Care for a child under age 13
 Care for disabled or elderly dependent
 Care given by a nanny
 Care at a sick child facility
 Summer day camp
 Tuition for pre-kindergarten or nursery school
DCFSA
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IRS LIMITATIONS IF YOUR SPOUSE ALSO
CONTRIBUTES TO A DCFSA
You are limited to a combined DCFSA contribution of
$5,000 in a calendar year
If you and your spouse file separate federal tax
returns, the most you can contribute is $2,500 a year
If you file a joint return, you can’t contribute more than
you earn (or what your spouse earns, if it is less than
what you earn for the year), with a limit of $5,000.
DCFSA
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COST SAVINGS EXAMPLE
Estimated Eligible Expenses
 Before/after school programs
 Summer day camp
Total
 Est. 30% tax bracket
SAVINGS
Example
$3,000.00
2,000.00
$5,000.00
x .30
$1,500.00
DCFSA
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DEPENDENT CARE CLAIMS
Must be fully completed and signed, including
provider certification.
Dependent care claims without provider
signature/certification must include itemized
statement with:
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Date(s) of service
Dependent’s name and date of birth
Itemization of charges
Provider’s name, address and tax ID/SSN
Note: cancelled checks, cash register receipts and credit
card receipts are not acceptable.
DCFSA
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WHEN TO FILE CLAIMS
Claims for dependent care expenses can be
submitted at any time throughout the year, but
your dependent care account balance must
be sufficient to cover the claimed amount at
the time of your claim submission.
DCFSA
QUESTIONS?
FLEXIBLE SPENDING
ACCOUNTS
REMINDER!
CAREFULLY CALCULATE THE AMOUNT YOU ELECT
TO CONTRIBUTE TO YOUR FSA ACCOUNTS.
THE IRS IMPOSES A “USE IT OR LOSE IT” RULE –
YOU FORFEIT ANY REMAINING MONEY IN YOUR
ACCOUNT AFTER REIMBURSEMENT OF ELIGIBLE
EXPENSES FOR THE YEAR.
FLEXIBLE SPENDING
ACCOUNTS
 Estimate
your annual unreimbursed
medical and/or dependent care expenses.
 Follow
the step-by-step instructions to
enroll online at www.conexis.org between
November 12 and December 10, 2007
 FSA Customer
Service: (866) 279-8385
 [email protected]