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Summary of Section 125 Cafeteria Plan Benefits Open Enrollment

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					                                       SAN ANGELO INDEPENDENT SCHOOL DISTRICT
                               Summary of Section 125 Cafeteria Plan Benefits
                              Open Enrollment October 16 – November 29, 2006

•   Cafeteria Plan – What is it?
    The Cafeteria Plan, otherwise known as Section 125 of the 1978 Federal Tax Reform Act, allows
    employees to deduct the premium paid for eligible benefits from their gross earnings before federal
    withholding taxes are calculated and deducted. Here’s how it works…
                       Without Section 125                        With Section 125
                        $1000 Gross Salary                       $1000 Gross Salary
                          - 100 Tax (10%)                         - 300 Benefits
                        $ 900 Subtotal                           $ 700 Subtotal
                         - 300 Benefits                           - 70 Tax (10%)
                        $ 600 Take Home Pay                      $ 630 Take Home Pay
                                              $30 Savings with Section 125
    There are two considerations:
    1. Plan Year – Elections are for one full year (January 1-December 31) and cannot be revoked or changed unless
       the employee has a change in family status (marriage, birth, adoption, divorce, loss of spouse’s job, etc.).
    2. Each employee must sign an election form every year, even if that employee does not select benefits or
       chooses not to make changes.

Section 125 Pre-Tax Payroll Deductions
•   Cancer Insurance – American Fidelity Assurance
    - Portable                                                 - Guaranteed renewable for life
    - Pays directly to you                                     - Cancer screening benefit of $50 or $75/calendar year
    - Coverage for radiation/chemotherapy                      - Experimental treatment benefit
    - Riders for ICU and specified diseases                    - Individual or family coverage available

•   Heart & Stroke Insurance – Allstate
    - Portable                                                 - Individual or family coverage available
    - Pays directly to you                                     - Travel & lodging benefit
    - Guaranteed renewable for life

•   Dental Insurance – LifeRe
    - Individual or family coverage available                  - You may use any dentist you choose
    - Preventive, basic, restorative, and major benefits

•   Vision Insurance – LifeRe
    - Individual or family coverage available                  - In-network and out-of-network providers

•   Flexible Spending Accounts – Medical and Dependent Care Reimbursement
                               ** Re-enrollment is required each year **
    - Payroll deducted before taxes                             - IRS plan for saving tax dollars
    - Used for medical and/or dependent care expenses           - Dollars must be used or they are forfeited
    - Reimbursement mailed to you or direct deposited           - Numerous eligible expenses may be reimbursed

After-Tax Payroll Deductions
•   Disability Insurance (Income Protection) – American Fidelity
    - Pays up to 70% of gross monthly salary                   - Flexible elimination periods
    - Doctor bill benefits                                     - Pays benefits until age 65
    - May be used for maternity leave

•   Permanent Life Insurance – Texas Life
    - Permanent & portable                                     - Covers self, spouse, children/grandchildren
    - A Met Life Company                                       - Amounts available from $10,000 to $100,000

•   Group Life Insurance – Met Life
    - Individual and spouse/dependent coverage                 - Affordable coverage