Flexible Spending Account Plan
The college sponsors a flexible spending plan that allows employees to allocate specific, pre-tax amounts of each paycheck for medical/dental premiums and for the reimbursement of certain medical/dental/vision care and/or dependent care. This means that you can have your taxable earnings reduced by the amount of your health plan contributions and amounts you elect to set aside in your dependent care and/or medical care flex account (subject to certain maximums), and you pay federal, state, and FICA taxes on the reduced salary. Your wages remain the same, but your taxable earnings are reduced.
Dependent Care Assistance Once each year you elect the amount you wish to have your paycheck reduced by for dependent care expenses (subject to certain maximums). You submit a claim for dependent care expenses actually incurred with a receipt for service. As your dependent care plan account balance allows, you will be issued a check for those expenses. By paying these expenses in this manner, you are paying them with before-tax dollars.
Medical Reimbursement Expenses Your co-payments, deductibles, and non-covered medical expenses under your health, dental services, and vision services plans may also be paid with before-tax dollars (subject to certain maximums and restrictions) by using the FSA. You can only utilize money in your FSA for out of pocket health care expenses for which you are not reimbursed under the plans.
Participating in the FSA gives you an opportunity to gain substantial savings. However, if you contribute too much money to your flexible spending account and you do not incur enough expenses to use the entire amount, you must forfeit the unused portion according to the IRS regulations. If you terminate employment during the plan year, deductions would cease. However, you would be entitled to reimbursement of expenses, which are incurred prior to the termination, if you submit claims within 60 days of termination. Any money remaining would revert to your employer.
Your medical care reimbursement account will be paid in full up to the annual amount you have elected withheld for the plan year. Your dependent care reimbursement account claims will be processed and paid up to the balance of your account. A grace period exists for qualified medical expenses through March 1st of the following year. Expenses must be submitted by March 31st in order to be reimbursed against the prior year’s election.