The Benefits of
2005 Plan Year
February 1 – January 31
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Introduce the Concept of Pre Tax
Eligible Benefits: POP & FSA’s
How the Plan Works
Your Responsibilities at Open
Common Q & A’s
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Tax Free Benefits
A quick review of how taxes affect your
Your gross pay is taxed first, then your
costs of benefits are withheld. You’re
taxed on your entire pay.
Section 125 allows benefit costs to be
Your benefit costs are deducted from
your gross pay first, then you’ll be taxed
on the remaining amount.
Bottom line: You’ll save money with flex!
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Your Flex Plan Benefit
Premium Only Plan (POP)
Flexible Spending Accounts (FSA)
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Premium Only Plan
Your cost of eligible benefit
premiums can be withheld pre-tax,
Group health, dental and vision
Certain voluntary insurance
You’ll immediately benefit by
having more take home pay due to
lower taxable wages.
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Child/Dependent Care FSA
Expenses you incur for the care of
your child or dependent that allows
you to work.
Health Care FSA
Out of pocket expenses for you
and your family such as co-pays,
deductibles, glasses, prescriptions,
chiropractic and dental care.
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Child care expenses up to age 13;
Or, care of a dependent that is
physically/mentally incapable of caring
The expense must be work related;
Maximum exclusion is $5000 per year for
one or more dependent;
Remember that you can not claim the
child care credit if you pre tax the
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Health Care FSA
You can include expenses for you and
your family, regardless of the health plan
they may be enrolled in.
Estimate the typical out of pocket
expenses you will incur during the plan
year. Maximum exclusion is $3000.
Do not include expenses that would be
for cosmetic purposes (face lifts or teeth
New in 2004, you can include many of
the over-the-counter drugs/medicines
(vitamins and supplements are ineligible)
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How the Plan Works
Once a year you determine the
amount you would like to elect for
each Flexible Spending Account.
The amount you elect is divided by
the number of pay cycles you
have, and withheld in equal
amounts throughout the plan year.
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As you incur eligible expenses for
services that have been rendered,
submit a copy of the bill, invoice, EOB or
other statement in the voucher
Reimbursement requests should be
processed within a few days of the
following payroll cycle.
Your flex check can be a “direct deposit”
(form on back of enrollment form) or
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The Dependent Care FSA will
reimburse you up to the balance in
The Health Care FSA will
reimburse you up to the amount
you’ve elected for the plan year,
regardless of account balance.
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You may only enroll during open
enrollment, or upon initial benefits
You are enrolling for the plan year, all
expenses must be incurred within the
Once you’ve enrolled, your election
amounts can not be stopped or changed
unless you experience a qualifying
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Use it or lose it – unused amounts
are forfeited, so consider your
election amounts carefully.
By taking advantage of the plan,
you’ll pay less in payroll taxes.
This may result in a nominal
reduction in your eventual Social
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Review the packets provided –
they provide full details and
worksheets to assist you.
Complete and submit your
If you are already on the plan and
are re-enrolling, a custom form will
be provided to you to make
enrollment even easier.
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The plan recordkeeper is Pacific
Administrators. They can be
Please call if we can answer any
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Q & A’s
Will I be taxed on reimbursements?
No. Reimbursements are tax free!
Can I include expenses for my family?
Yes, expenses for your spouse and
dependents are qualified under the plan.
Can I enroll in the plan now and stop later in
Generally no. When you enroll in the plan, it is
for the entire plan year. You are not permitted
to stop or change election amounts unless you
experience a qualifying “change in status.”
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Q & A’s
How do I know what my account balance is?
You’ll receive a statement with each
reimbursement and at the end of each month.
What if I change employment?
You may submit expenses for an extended
period of time. See plan documents for details.
For full details and plan information, please refer
to the Plan Documents and Summary Plan
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