EXPENSE-REIMBURSEMENT-ACCOUNTS-newton

Document Sample
EXPENSE-REIMBURSEMENT-ACCOUNTS-newton Powered By Docstoc
					EXPENSE REIMBURSEMENT ACCOUNTS
If available as a plan benefit option, expense reimbursement accounts allow you to establish an
account to reimburse certain types of expenses on a tax exempt basis. There are two types of
reimbursement accounts which may be elected. The first is the Medical Expense Reimbursement
Account to reimburse uninsured out-of-pocket medical expenses, and the second is the
Dependent Care Expense Reimbursement Account to reimburse dependent day care expenses.


              HOW DO THE REIMBURSEMENT ACCOUNTS WORK?
Each month, pre-tax payments are made to an account set up in your name. As one of your
Section 125 Flexible Benefit Plan elections, you can specify the payment amount to be set aside
on a tax-free basis for one or both of the reimbursement accounts. As you incur qualified medical
expenses or dependent day care expenses, you can submit a voucher form for reimbursement
from the proper account.


                        HOW DO I GET REIMBURSED FOR MY
                             QUALIFIED EXPENSES?
Each month in which you incur an expense, you may submit a voucher form for reimbursement.
This voucher form must be accompanied by your original receipts or, in the case of a dependent
day care expense, a dependent care provider acknowledgment form. These forms will be
provided to you.

The voucher will be processed and you will be sent a reimbursement check for your expense(s).
The medical expense reimbursement check will be for the expenses claimed up to the maximum
benefit amount you elected for the year less expenses previously reimbursed. The dependent
care expense check will be for the expense you claimed up to the amount you have in your
account.


                       WHAT HAPPENS IF MY EXPENSES ARE
                       LESS THAN THE AMOUNT SET ASIDE?




                              “USE IT OR LOSE IT”
      Any expense dollars not used for expenses are forfeited. It is very
    important that you be conservative and accurate when estimating your
                         expenses for the plan year.
                 IMPORTANT GUIDELINES FOR ENROLLMENT IN
                       REIMBURSEMENT ACCOUNTS
1.     Be sure that the amount set aside is conservative – amounts not used for qualified
       expenses cannot be carried over or returned to you.

2.     You cannot be reimbursed for these expenses from any other source.

3.     All expenses to be reimbursed must be incurred in the plan year in which your
       contributions are made.

4.     Expenses reimbursed under the Plan may not be used when calculating your medical
       expense deduction or the dependent care tax credit.

5.     You have a 90-day grace period at the end of the plan year to request reimbursement of
       expenses you incurred during the plan year.

6.     You should consult with your tax advisor concerning participation in the reimbursement
       accounts.



               MEDICAL EXPENSE REIMBURSEMENT ACCOUNTS
The Medical Expense Reimbursement Account can benefit you if you have any predictable out-of-
pocket medical, dental or vision care expenses. Only expenses incurred for you or your
dependents during the plan year may be reimbursed. For the Medical Expense Reimbursement
Account, you will only be allowed to change your benefit election due to termination of your
employment.



               HOW MUCH IS AVAILABLE FOR REIMBURSEMENT?

The total amount of a qualified expense is available for reimbursement upon receipt of a voucher
and original bill or receipt. The amount of the reimbursement, however, will not exceed the total
contribution for the plan year less any reimbursements paid to date. Total reimbursements for the
plan year will not exceed the contribution amount for the plan year.


                         IS THERE A CONTRIBUTION LIMIT?
Maximum amount available under the Medical Expense Reimbursement Account is $3000 per
plan year.
                               MEDICAL EXPENSE REIMBURSEMENT
                               WHAT TYPES OF EXPENSES ARE ELIGIBLE?

            Examples of eligible medical expenses may include, but are not limited to:
Acupuncture                                           Medical examinations
Alcohol and Drug Rehabilitation Expenses              Medical monitoring and testing devices
  (inpatient treatment only)                            (ex. blood pressure and glucose monitors)
Ambulance                                             Obstetrics
Anesthetist                                           Orthodontia expenses as treatment is provided*
Artificial limbs and teeth                            Over the counter drugs and medications for
Blood pressure monitor                                  treatment of a medical condition (see next page)
Certain corrective surgery                            Over the counter items for smoking cessation
Contraceptives                                        Physical therapy provided by licensed therapist
Chiropractor                                          Physician
Dental treatment                                      Prescription drugs
Diabetic supplies                                     Rental or purchase of portable medical equipment
Eye exam, prescription eyeglasses, and                Stop smoking program
  contact lenses, contact lens solution and           Support or corrective devices
  enzyme cleaners                                     Transportation expenses relative to medical
Gynecologist                                            care, including medical mileage at the rate
Hearing aids and batteries                              allowed by the tax code
Hospital and skilled nursing facility                 Weight Loss Program for obesity**
Laboratory fees                                         (excludes food, exercise equipment and
Laser eye surgery                                       exercise classes)
Massage for medical reasons                           X-rays


      *        Orthodontia claims cannot be accepted for the entire contracted amount. Claims will be
      accepted for the initial down payment usually associated with the appliances. Monthly payments
      will also be accepted as the charge for the medical services rendered for that month.

      **      You will be required to submit a Dr’s Prescription outlining the diagnosis and medical
              necessity in order to claim these types of expenses.




                          Examples of ineligible over the counter
                       medications may include, but are not limited to:

           ALL OVER THE COUNTER MEDICATIONS ARE INELIGIBLE
                  EFFECTIVE JANUARY 1, 2011( see memo)
                 DEPENDENT CARE EXPENSE REIMBURSEMENT
If you incur dependent day care expenses so that you and your spouse can work, the dependent
day care expense reimbursement portion of the plan will allow you to submit dependent day care
expenses reimbursement for a qualifying dependent. Remember that to be eligible for this
program, your spouse (if you are married) must work, go to school full time, or must be incapable
of self-care.


                          WHO IS A QUALIFIED DEPENDENT?
A qualifying dependent lives in your home and is:

       1.      Your dependent under age 13 for whom you may claim an exemption deduction, or
               for whom you are the custodial parent, if separated or divorced;

       2.      Your dependent who is physically or mentally not able to care for himself or
               herself, and spends at least 8 hours daily in your home; or

       3.      Your spouse who is physically or mentally not able to care for himself or herself,
               and spends at least 8 hours daily in your home.



                           WHAT ARE ELIGIBLE EXPENSES?

You may be reimbursed for dependent care for a qualified dependent provided either inside or
outside of your home. If provided outside the home, the dependent care center or provider must
comply with all federal, state and local regulations, if applicable.

In addition, the center or provider must be willing to complete the dependent care provider
acknowledgment form and to provide the name, address and social security number or tax
identification number of the care provider.

Expenses may not be reimbursed if care is provided by one of the following:


       1.      Someone you may claim as a dependent for federal income tax purposes;

       2.      Your child unless the child is age 19 or older by the end of the year.
                   WHAT IS THE MAXIMUM I CAN CONTRIBUTE?

In most cases, you may contribute up to $5,000 per year; however, that amount may be reduced
if:


       1.      You are married and file a separate tax return, the maximum contribution is
               $2,500.

       2.      You or your spouse earns less than $5,000 a year, the maximum contribution is
               equal to the lesser income amount.




                   WHAT IS AVAILABLE FOR REIMBURSEMENT?

Upon receipt of the voucher and acknowledgement form, you will be reimbursed for the expense
you claimed up to the amount you have in your account. If your voucher is for an amount in
excess of the amount in your account, the balance of the expense will be carried forward to future
months as additional payments are received for your account.



                               TAX CREDIT ALTERNATIVE

You should be aware that you may be able to take a federal tax credit on the amount you pay for
dependent care expenses instead of participating in the dependent care expense reimbursement
account. You cannot claim the tax credit for expenses that have been reimbursed through the
plan. Please consult you tax advisor to determine which plan may be most advantageous to you.


                            IMPORTANT TAX INFORMATION

Regardless of whether you participate in the dependent day care plan under Section 125 or claim
the credit on you income tax, you must provide the IRS with the name, address and taxpayer
identification number (TIN) of your dependent day care provider(s) by completing Schedule 2 of
Form 1040A or Form 2441 and attaching it to you annual income tax return. Failure to provide
this information to the IRS could result in loss of the pre-tax exemption for your dependent day
care expenses.
                                          Wellington Benefits
                                    EMPLOYEE EXPENSE WORKSHEET

EMPLOYER:
NAME OF EMPLOYEE:
SOCIAL SECURITY #:_____________________________DATE OF BIRTH:_____________
MARITAL STATUS: ________________ NUMBER OF DEPENDENTS:________________


ESTIMATED USE ONLY

I.OUT-OF-POCKET MEDICAL EXPENSES:                                          ANNUAL COST                 ELECTION
  Type of Expense                                             $
Health insurance Deductibles
Doctor Office Visits
Physicals
Prescription Drugs
Dental Costs (check-ups, cleaning, fillings)
Orthodontia Costs (braces, exams, etc.)
Vision & Eye Care (glasses, contacts)
Surgery
Other Health Related Expenses
Specify
                                                             TOTAL
         AVERAGE MONTHLY EXPENSE
         (divide total by 12 or number of
         months being paid if less than 12)



II. DEPENDENT OR CHILD CARE EXPENSES:
Child Care Expenses                   $
Other Employment Related DDC Costs
                                      TOTAL:                                                           _______

         AVERAGE MONTHLY EXPENSE
         (divide total by 12 or number of
         months being paid if less than 12)


This is a worksheet only and does not obligate you in any way. If you decide to participate in either of the expense
reimbursement accounts or in both of them, there may be a monthly administration fee to be payroll deducted.

Remember that you should review you tax situation carefully as to the tax advantage of the dependent care tax credit
compared with participation in the dependent care expense reimbursement portion of the Section 125 Flexible Benefit
Plan.
                                         Newton-Conover City Schools FLEX NUMBER: 75028




The Metavante Debit Card is now available for Medical Reimbursement Flexible
Spending Accounts. Cards can also be issued to dependents for no additional fee.
If the card is lost or stolen, replacement cost is $10.00 and will be deducted from
account balance. Claims can also be submitted directly for reimbursement. If
funds remain in your account after the end of the plan year, you may also use the
debit card during the 2½ month grace period. The system will deduct all
remaining funds from your old plan year and then deduct any balance from the
new plan year, if you continue to participate.
The IRS requires validation of most transactions – you must submit receipts for verification of
expenses, when requested. Claim forms can be found on our website, www.ffga.com. Copies can
either be mailed to First Financial Administrators, Inc. (P.O. Box 670329 Houston, TX 77267-0329) or
faxed to (800) 298-7785. Because of innovative coding of eligible medical items, receipts
from Walgreens, WalMart, Target, and Drugstore.com - for example - do not need to be
submitted; however, you must pay for non-eligible items separately.

  Where to use your debit card for eligible unreimbursed medical expenses:
     Pharmacies, always use your debit card at the pharmacy counter only!
     In-Store Pharmacies – If “merchant code” is programmed “pharmacy,” the expense will be
      authorized. However, if the MasterCard transaction code is programmed “grocery/retail,”
      THE TRANSACTION MAY BE DENIED! THE DEBIT CARD MAY NOT WORK AND THE EXPENSE
      MAY BE DECLINED IN SOME GROCERY/DISCOUNT STORES
     Physician Offices
     Specialist Physician Offices
     Dental Offices




   Vision Care Providers
   Medical Facilities
   Medical Clinics
   Hospitals, including Emergency Rooms
  First Financial Administrators, Inc. can provide you with a list of eligible expenses associated with
  your Medical Reimbursement Flexible Spending Account. This card is a signature debit card
  and does not require a PIN for use. Transactions must always be submitted as
  “credit.”

  Participants   may     always      review   Flexible    Spending   Account   balances    online   at
  www.ffga.com. Call (866) 853-FLEX for more information.

  **Card will deactivate upon termination of employment

				
DOCUMENT INFO