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Flexible Spending Account Plan
As a result of the Revenue Act of 1978, Congress created Section 125 and added it to the Internal Revenue Code. A Flexible Spending Account Plan (also known as a form of Cafeteria Plan or a Section 125 Plan) is a plan that employs the principle of elective compensation for the advantage of the employee. This plan enables you, as an eligible employee, to elect that a portion of your income be used to pay for expenses you know you will incur during the plan year which runs January 1 through December 31. On October 31, 2013, The U.S. Department of Treasury has modified the "Use or Lose It" rule to allow Medical Reimbursement Account participants to have what is called a "Carryover Provision". The Carryover Provision allows up to $500 of unused HealthCare FSA account funds to be carried over to the next plan year. If you elect to participate, the amounts contributed to the plan are not subject to federal and state income tax or FICA and Medicare tax. Therefore, you recognize the tax savings for incurred expenses and an increase in your spendable income.
WHO IS ELIGIBLE?
All active, full-time, non-student employees, if the most recent appointment period is continuous for a minimum of one year (nine or twelve months as appropriate to the appointment), and any other employee who is eligible by virtue of his/her specific job assignment. The effective date for the beginning of this election is the first payday after January 1 and it will continue through the end of the plan year. Newly hired employees have 30 days from their date of hire to elect to participate in the plan. The effective date of the initial enrollment for a newly hired employee will be the first payroll processing period after receipt of the election form by the plan administrator and will last until the end of the plan year. A new election form must be executed each year during November for the next plan year.
WHAT DOES IT COST TO PARTICIPATE?
Nothing! The University pays all fees.
HOW WILL THIS BENEFIT ME?
By having a specified amount of your gross income redirected to pay for eligible expenses during the plan year, you pay for these expenses with BEFORE-TAX dollars. Since your taxable income is lowered, you pay less federal and state income tax and FICA and Medicare tax. Therefore, your total take home pay (paycheck plus tax-free reimbursement) is more.
HOW DOES THE PLAN WORK? MEDICAL REIMBURSEMENT ACCOUNT:
Medical reimbursement elections will be capped at $2,500 per year, per employee, (this does not include any Carryover amounts). You can use your account to pay (using WageWorks Health Care debit card) or reimburse you for eligible medical expenses incurred during the plan year which are not paid by your insurance plan. This includes co-payments, deductibles, and other non-covered expenses, such as prescription, dental and vision services not reimbursed to you from any other medical, prescription, dental or vision care plan. You may be reimbursed for medical expenses for spouse and children. Each of your children is now eligible for coverage through the end of the Plan Year in which he or she attains age 26 (See website for examples of tax deductible medical expenses and certain over-the-counter medication).
DEPENDENT CARE REIMBURSEMENT ACCOUNT:
You can deposit into your own personal dependent care account up to a maximum of $5,000 per plan year per household if your tax filing status is "married filing jointly" or "single head of household" or $2,500.00 per plan year if your tax filing status is "married filing separate return". You can use this account to reimburse you for dependent care expenses if incurred solely for the purpose of allowing you or if you are married, you and your spouse to work outside the home. These expenses apply to dependents that are under the age of 13. If a dependent is 13 or older, he/she must be physically or mentally unable to care for him or herself for the expense to qualify as a deduction. You can submit a completed "Dependent Care Claim" form to WageWorks for reimbursement of your eligible dependent care expenses. A debit card will not be issued for this plan.
HOW WILL I KNOW THE STATUS OF MY ACCOUNT?
You can manage and check your account through WageWorks online or over the phone. The "Claims and Activity" page online details all your account activity and will even alert you if any Card transactions are in need of verification. For the latest information, visit www.wageworks.com and select the "Register First Time User" link. To Register enter your first and last name, your date of birth, your home zip code and the last 4 digits of your EMPLOYEE ID NUMBER (90...####). You will be able to log into your account 24/7 and review your most recent FSA activity. By accessing www.wageworks.com you will be able to:
CAN I CHANGE MY CONTRIBUTIONS?
The amount of your contributions to the plan must be determined prior to the beginning of the plan year and cannot be changed unless you have a change in your family status (marriage, divorce, spouse employment change, childbirth, adoption, death of spouse or dependent), you terminate employment with the University, or a change occurs in your dependent care payments which is beyond your control. If you have a change in family status during the plan year, you have 45 days in which to change your deduction. Please call the Payroll & Employee Benefits Office (844-4183) to request a Mid-Year change form.
HOW ARE CLAIMS PAID?
1. For the current plan year, you may submit a claim for an eligible expense at any time during the plan year to WageWorks. WageWorks Health and Dependent Care reimbursement forms are available in the Payroll and Employee Benefits Office for your use when submitting claims, can be downloaded or submitted online by accessing www.wageworks.com. You may also fax to 877-353-9236, or US mail: CLAIMS ADMINISTRATOR, P.O. Box 14053, Lexington, KY 40512. 2. With your claim form, you must include an itemized receipt or Explanation of Benefits (EOBs), especially if your insurance paid a portion of the expense. Itemized receipts must contain the five pieces of information required to help ensure the approval of your claim. They are: