Agenda Open Enrollment Overview Flexible Spending Account (FSA) – Overview – Eligibility – Types of Accounts – Savings Example – Plan Year – Payroll Deductions – Important Considerations – How to Plan – Next Steps

Open Enrollment Overview Open Enrollment Period – August 19 th through September 15 st All changes / enrollments are effective October 1, 2013 through September 30, Open Enrollment Packet – All employees can access a packet containing some very important documents that requires a response if you’re participating in the FSA program.

Flexible Spending Account (FSA) Overview

How Does a Flexible Spending Account Work? A Flexible Spending Account (FSA) is an employer-sponsored plan that lets you deduct dollars from your paycheck and put them into a special account that’s protected from taxes. The money in an FSA account can be used for eligible health care and dependent care expenses incurred by you, your spouse and your dependents. FSA accounts are exempt from federal taxes, Social Security (FICA) taxes and, in most cases, state income taxes. Depending on your tax bracket, you may save up to 30% or more in taxes.

Who Can Participate? Any employee eligible for district medical insurance as defined in the union contract.

Health Care Reimbursement Account Dependent Care Reimbursement Account There are two types of accounts:

Flexible Spending Account Health Care Reimbursement: $2,500 Maximum Dependent Care Reimbursement: $5,000 Maximum

As you know, health care and daycare expenses can really add up.

* give you a way to pay for these expenses with tax-free dollars. * often referred to as Flexible Spending Accounts (FSA’s) Reimbursement Accounts

You may choose to participate in one or both of these options, depending on your individual needs.

You save money because your contributions to the accounts are deducted from your pay before taxes are calculated.

will depend on your individual tax bracket and the amount of money that is withheld from your paycheck on a tax-free basis. The amount of savings you will enjoy by participating in a Reimbursement Account

For example: Let’s assume you earn $32,000 annually and you have out-of-pocket health care expenses of $1,000 and daycare expenses of $3,000 WITHOUT participating in the Reimbursement Accounts

Federal Tax (15%)-$4,800 Annual Salary$32,000 Social Security Tax (7.65%)-$2,448 State Tax (4.35%)-$1,392 Net Income$23,360 Health Care Expenses -$1,000 Daycare Expenses -$3,000 Leaves you with $19,360

Now: Let’s look at the same set of circumstances WITH the use of the Reimbursement Accounts This time expenses BEFORE Taxes $

Daycare Expenses-$ 3,000 Annual Salary $32,000 Health Care Expenses-$1,000 State Tax (4.35%) -$1,218 Adjusted Gross Income $28,000 Social Security Tax (7.65%) -$2,142 Federal Tax (15%) -$4,200 Leaves you with $20,440

Let’s Compare Those Totals Take Home Pay Without Reimbursement Accounts $19,360 Take Home Pay With Reimbursement Accounts $20,440 That’s a tax savings of $ 1,080 !

FSA Plan Year Annual Election – 10/1/13 through 9/30/14 – Unless you experience a Family Change of Status your election will remain throughout the plan year. Plan Year – October 1, 2013 – September 30, 2014 – All eligible expenses must be incurred by September 30, 2014 IRS Use It or Lose It Rule – Unused dollars at the end of the plan year will be lost if eligible expenses are not submitted within 30 days of the end of the plan year (10/30/14). Payroll Deductions – Your pay period deduction amount is calculated by dividing your annual election by the number of paydays between October and June. This fiscal year there are 20 paydays in those months. Elective deductions for health and dependent care will begin with the 10/4/2013 paycheck and end with the 6/27/2013 paycheck.

Methods of Reimbursement 1.Debit Card 2.Direct Deposit 3.Hard Copy Check

Debit Card Requirements Debit Card NOT Accepted Merchant is NOT an Inventory Information Approval System (IIAS) EX: Patterson’s Pharmacy Debit Card Accepted Merchant is an Inventory Information Approval System (IIAS) EX: CVS or Walgreens Recommendation – Segment your purchases; FSA Eligible Purchase and Non-FSA Eligible Purchase Reminder – You are still responsible to keep your receipts.

Important Considerations Health Care Account Advanced Reimbursement – allows you to reimburse your full election amount for the plan year prior to making your full year payroll contribution. Maximum Amount is $2,500. Dependent Care Account You can not take a federal income tax deduction for expenses that are reimbursed from a Dependent Care Account. No Advanced Reimbursement The maximum amount any one family can contribute during a calendar year is $5,000. Over the Counter Medications Effective January 1, 2011 will NO longer be an eligible FSA expense due to Healthcare Reform.

How to Plan… Review the NGE Flexible Spending Account Packet Understand the Eligible Expenses Estimate your eligible expenses for the plan year by using the NGE worksheet

NGE Flexible Spending Account (FSA) Packet

FSA Next Steps Must Enroll by September 21 st 1. Paper Enrollment Form – Complete Flexible Spending Account Election Form 2. Online Electronic Enrollment -

FSA Questions Please contact NGE at

Thank You!