SECTION 125/ Flexible Spending Account (FSA)

Section 125

An IRS Section 125 Premium Only Plan is also often referred to as a POP Plan. In a nutshell, it makes it possible for employees to use tax-free or pre-tax income to pay for qualified health insurance premiums. These pretax dollars are subtracted from your gross earnings before taxes are taken out, thus lowering your taxable income and increasing your take home pay.

With a Premium Only Plan:

• Your benefits are more affordable.
• Your spendable income increases.
• You pay less in taxes.

When can I enroll or make a change to my POP enrollment?

You may enroll or make a change in your election only at the beginning of each plan year. To make a change during the plan year, a change in status such marriage, divorce, birth of a child, the death of your spouse or a dependent, your spouse’s ending or beginning employment, when you or your spouse switch from part-time to full-time employment or full-time to part-time, or when you or your spouse take an unpaid leave of absence which impacts your benefits. The change must be reported within 31 days and your election change must be consistent with the change in status.

 

How will pre-taxing impact my Social Security benefits?

The Social Security benefit is based on total wages accumulated during your lifetime, and the government has a formula it uses to calculate these benefits that is always subject to change. Any reduction in your taxable pay may also lead to a reduction in your Social Security benefits; however, for most employees, the reduction in Social Security benefits is insignificant when compared to the value of paying lower taxes now.

Flexible Spending Account (FSA)

A Flexible Spending Account (FSA) allows you to have money deducted from your pay on a pre-tax basis and put into an account that you can use to pay for eligible expenses. There are two types of accounts, Medical and Dependent Day Care.

How Does It Work?

If you participate, you will elect to have a specified amount of pre-tax money deducted from your paycheck each pay period. These dollars are subtracted from your gross earnings before taxes and put into a flexible spending account. Once enrolled, you will be issued a debit card to access funds in your Flexible Spending Account. Present your card at the time of payment to make qualified purchases for medical goods and services, as well as dependent day-care services.  Alternatively, you may submit a receipt for a qualified expense, and be reimbursed from this account.

Contributing money to a FSA can save you money.  For the Flex Facts FSA Overview Brochure - Click Here.

FSA Open Enrollment

Each spring eligible employees will be given the opportunity to enroll in the school district’s Flexible Spending Account (FSA).  Anyone wishing to participate (even if you already participated last year) must complete an enrollment form and turn it into the Business Office by the designated deadline.

FSA Enrollment Benefit Packet – Click Here

FSA Enrollment Form – Click Here

FSA Benefit UPDATE!

The Medical Flexible Spending Account plan limit will be increased from $2,600 to $2,650 for 7/1/2018 so that members may elect the full amount approved by the IRS!

How Much Can I Contribute?

The maximum you can contribute to the Medical Flexible Spending Account in 2018/2019 is $2,650.

For a Dependent Care Flexible Spending Account:

• $5,000 for a single parent
• $5,000 for a married couple filing jointly
• $2,500 for a married person filing separately

Who Administers Our Flexible Spending Plan?

Flex Facts will be the administrator for the Flexible Spending Plan. 

Website: www.flexfacts.com

Member Services: 877-94-FACTS (877-943-2287)

FSA Plan Document: For a copy of the Summary Plan Document - Click Here

For a copy of your Flexible Spending Account Benefit information - Click Here

FSA Rollover Feature

For the new plan year, employees can contribute up to a maximum of $2,650 this plan year.  A participant will also be allowed to carryover up to a maximum of $500 of unused funds into the following plan year. This Rollover Feature applies to the Medical FSA only.  Any remaining balance in your account after the $500 is rolled over will be lost. This rule exists because the IRS has established strict guidelines for plans with tax advantages. Estimate carefully the amount you want to contribute to your FSA, and only contribute dollars you’re confident will be used before the end of the eligible claims period.  If you need assistance, representatives are available to help you in determining what amount you should contribute.

Here are some examples of how the FSA rollover feature will work:

Example 1: A participant elected to contribute $2,000 to their Medical FSA for the 7/1/17-6/30/18 plan year.  By June 30th of 2018, the participant only used $1,600 of their elected amount.  This participant can then carryover the unused amount of $400 into the next plan year, 7/1/18-6/30/19.

For the 7/1/18-6/30/19 plan year, the participant elects to contribute $2,650 to their Medical FSA.  Therefore, on July 1, 2018, the participant would have $3,050 of available medical FSA funds (the new election of $2,650 plus the $400 that was carried over from the previous plan year).   

Example 2: A participant elected to contribute $2,500 to their Medical FSA for the 7/1/17-6/30/18 plan year.  By June 30, 2017, the participant only used $1,800 of their elected amount.  This participant can then carryover $500 of unused funds into the next plan year, 7/1/18-6/30/19. (Even though the participant had $700 in unused funds at the end of the plan year, the IRS only allows a maximum of $500 to be carried over to the next plan year). The participant would forfeit the additional $200 left over for that plan year.

For the 7/1/18-6/30/19 plan year, the participant elects to contribute $2,650 to their Medical FSA again.  Therefore, on July 1, 2018, the participant would have $3,150 of available Medical FSA funds (the new election of $2,650 plus the $500 that was carried over).

What Expenses Can I Submit for Reimbursement Through the Medical FSA?

Common expenses that are eligible include; co-pays, deductibles, prescriptions, vision and dental expenses. To be eligible, the expenses must:

1. Be for medical care.
2. Be incurred by you, your spouse or your eligible dependents.
3. Be incurred during the period of coverage.
4. Not be reimbursed by any other source. (Per IRS regulations, qualified medical expenses   are not paid for or reimbursed for under any other health plan coverage.)

For an overview of eligible Health Care Expenses - Click Here.

For a Complete Listing of Eligible Expenses:

• Go to-  http://www.flexfacts.com/
• At the bottom of the page, click on FSA Eligible Expense Table
• Enter code: flex2011

What Expenses Fall Under the Dependent Day Care FSA?

The Dependent Care Assistance account allows you to pay for employment related expenses that enable you and your spouse to be gainfully employed, seek employment, and/or be a full-time student. In general, expenses must be for the care of a qualifying individual. Reimbursement may also include eligible expenses for children or elder dependents that rely on you for their care.

Expenses for services provided outside the employee’s home by dependent care centers must comply with state and local laws. Your care provider must report day care income on their taxes to be considered as eligible. Dependent Care FSA must be for children under 13 years of age, unless they meet the qualifications of physically or mentally incapable of self-care.

What is Our Plan Year and When Would I Need to Use the Money in my Account By?

The plan year is July 1, 2018 through June 30, 2019.  All funds must be used by June 30, 2019.

For the Medical Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year. For the Dependent Care Flexible Spending Account, you must submit claims no later than 90 days after the end of the Plan Year.

FSA FAQ’s

A Flexible Spending Account (FSA) allows you to have money deducted from your pay on a pre-tax basis and put into an account that you can use to pay for eligible expenses. There are two types of accounts, Medical and Dependent Day Care.

Who Is Eligible to Participate?

Anyone who is eligible for health benefits is eligible to enroll in the FSA plan.  Even if you decide not to elect health benefits, you may still enroll in the Flexible Spending Plan.

How Do I Enroll?

To enroll in either the Medical or Dependent Care Flexible Spending Accounts, you must make an election during the Open Enrollment period.  Open Enrollment will be held every Spring.  Elections made during the Open Enrollment period become effective on July 1st.

 

To print a Flex Facts FSA Enrollment Form – Click Here.

 

When Do the Contributions Begin? 

Contributions will begin your first pay period in July.  Contributions will be divided among the number of pays you receive throughout the year, 20 pays for 10-month employees and 24 pays for 12-month employees.

What About Over the Counter Medications?

Beginning January 1, 2011, participants are no longer able to use money from their Flexible Spending Account for reimbursement for over-the-counter drugs that are not prescribed by a doctor. To be reimbursed for over the counter medications, you must submit your claim with a prescription from your doctor. This new rule does not apply to reimbursements for the cost of insulin, which will continue to be permitted, even if purchased without a prescription.

What Expenses Fall Under the Dependent Day Care FSA?

Common expenses that are eligible include; daycare facilities, after school programs, summer day camp, and in-home babysitters.  To be eligible, the expenses must:

• Be for employment related expenses.
• Be incurred to allow you and your spouse (if applicable) to be gainfully employed.
• Be for your child who is under the age of 13 or for your spouse or tax dependent who lives in your home and is incapable of self-care.

How Do I Get Reimbursed for Expenses?

The easiest way to use your funds is by using your Flex Facts debit card at the point of service. The card can be used at any medical or dependent care facility that accepts MasterCard. You can also use your card at most pharmacies. When you use your card, funds are automatically deducted from your account to pay for eligible expenses.

Please note that you should retain all of your receipts. The IRS requires that the administrator request copies of receipts for certain claims. If you are required to send in receipts an e-mail or letter will be sent to you the business day after you use your card. If you are not able to use your card at the point of service you can file a claim online, by fax or by mail.

To file electronically log into your Flex Facts FSA account, click on the Request Reimbursement link under My Accounts on the top left-hand side of the screen then follow the on-line instructions.

To file via fax or mail complete a Claim Form and send it along with a copy of the EOB to:

Flex Facts Claims Department, 7 Grant Avenue, Lakewood, NJ 08701, Fax 877-747-8564

 Manual claims are reimbursed via direct deposit or manual check. To speed up the reimbursement process please sign up for direct deposit by logging into your account as described below.

Accessing Your Account On-Line

Once your enrollment is received and entered into the system you will be able to access your account information on-line:

1. Go to www.flexfacts.com

 

2.Click on the Participant Login button on the top right-hand side of the screen.

3. Your first-time logging into your account you will have to click on the Create Account button.

4. Enter in the information requested. You will need the following information:

• Your Employee ID which is your Social Security Number
• Your Moorestown Board of Education Employer ID number: GBSMOTBOE

5. Set up your username and password.  Note that your password must be at least 7 characters long and include at least one number and one letter.  Once you log into your account you can access your account information including balances and claims history.

You can also access your account information between 8:30 AM and 8:30 PM by calling 877-94-FACTS (877-943-2287).