Employee Benefits Outline of Presentation What is a Flexible Spending Account (FSA)? Two Types –Medical –Dependent Care Examples of Eligible/Ineligible Expenses Reimbursement Enrollment Information Questions
Employee Benefits What is an FSA? A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows you to pay for eligible medical and/or dependent care expenses on a pre-tax basis. You direct a part of your pay into a special, tax-free account that you use to reimburse yourself for eligible out-of-pocket medical and dependent care expenses. Contributions used for FSAs are taken out of your salary before federal/state income taxes, FICA (Social Security and Medicare) taxes are applied.
Employee Benefits AN EXAMPLE John earns $35,000/year. Medical Spending Account: $240/year ($10.00/pay) July 2009- Eyeglasses ($240) –Debit Card –Manuel Claim
Employee Benefits WHAT ADVANTAGES DID THIS GIVE JOHN? REDUCTION IN W2 EARNINGS REPORTABLE W2 EARNINGS WITH JOHN’S SPENDING ACCOUNT ELECTION ARE NOW $34,760.
Employee Benefits INCREASE IN TAKE HOME PAY W/OUT SPEND. ACCOUNT WITH SPEND. ACCOUNT EARNINGS $ 35,000.00 $ 34,760.00 S.S. TAX (7.65%) - $2677.50- $2659.14 F.I.T. TAX (20%) - $7,000.00- $6952.00 STATE TAX (3%) - $1,050.00- $1,042.80 $24,272.50 $24,106.06 MEDICAL EXPENSE - $ 240.00- $0 TAKE HOME PAY$24,032.50$24,106.06
Employee Benefits Two Types of FSAs Medical Spending Accounts –$3,000/Plan Year –Use It Or Lose It Provision Dependent Care Spending Accounts –$5,000/Plan Year –Use It Or Lose It Provision
Employee Benefits Ineligible Expenses (Medical FSA) Cosmetic Surgery Dancing Lessons Diaper Service Electrolysis or Hair Removal Funeral Expenses Future Medical Care Hair Transplant Health Club Dues Household Help Insurance Premiums Maternity Clothes Swimming Lessons Teeth Whitening Veterinary Fees
Employee Benefits Eligible Expenses (Dependent Care FSA) Adult Daycare After-School Care Babysitter (work-related) Before-School Care Day Camp Daycare Room and Board (Nanny) Tuition (Nursery and Preschool)
Employee Benefits Reimbursement PY 2008-2009 Deadline for claims submission to Loomis is 05/31/09. Claim must be incurred prior to 06/01/09. 06/01/09 – 08/31/09 –Complete Loomis Claim Form –Submit form to Human Resources –Checks will be run every Thursday
Employee Benefits Reimbursement PY 2009-2010 Administer by AmeriFlex MBI Card and/or Claim Forms Check or Direct Deposit
Employee Benefits Enrollment Information Complete the AmeriFlex Application If you are currently enrolled in a Flexible Spending Account, you must re-enroll for the new plan year. You will not be automatically enrolled. Deadline: Friday, May 1 st