Flexible Spending Accounts “Bank on a Tax Break Flexible Spending Accounts “Bank on a Tax Break” Administered by CBIZ Payroll

Section 125 of IRC allows “tax-free” savings with Flexible Spending Accounts 1. Health Care FSA 2. Dependent Care FSA

IS THERE ANY RISK? “USE OR LOSE RULE” You must use all the money in your FSA during the plan year or risk forfeiting it after the end of the plan year

How do I get reimbursed from my FSA? Complete and sign a claim form List expenses, and attach itemized bills or receipts Mail or Fax your claim to CBIZ –Reimbursement Checks mailed to your home address –or Direct Deposited to your bank account

Or you may use the Take Care Card… An easy way to get reimbursed from your FSA!  Each participant receives a Take Care Card  You may use the Take Care card to pay for medical, dental, vision & dependent care  Funds moved from your FSA to pay provider No Out-Of-Pocket!!

Where can the Take Care Card be used? Doctor or Dentist Office Pharmacy or Drug Store Vision Care Provider Hospital, Lab & X-ray Facilities Dependent Care Providers The Card is “smart” and only works with eligible providers

What else should I know about using the Take Care card? Important: The process is not 100% paperless! YOU MUST SAVE ALL YOUR RECEIPTS! The IRS requires you to submit copies of your receipts whenever your expense is not a “co-pay match” with health plan You will be informed in your monthly statement about any purchases “pending” approval—Be sure to submit documentation within 30-days to avoid having your Take Care Card deactivated Your card limit is your annual election

What happens when you use the card? Employees pay expenses with the take care card  Monthly statement noting “approved” and any “pending” debit card transactions  Go to the myflex online website to view pending transactions and to reconcile account  FAX documentation for “pending” approval  Repay “ineligible” by credit card or bank debit via website or mail check to repay  Card is “turned-off” if documentation not sent within 30-days of statement date  Card is “turned-on” when “pending” issue is cleared

What happens if you don’t use the card?  Pay expense from personal funds  FAX or mail claim form with copies of itemized bills or receipts  Reimbursed weekly - Every Friday  Check or Direct Deposit

The Health Care FSA

Expenses eligible for reimbursement from the Health Care FSA Deductibles/Co-payments Acupuncture Alcoholism & Drug Abuse Treatments Childbirth Classes Chiropractor Contact Lenses & Solutions Dental Expenses Eye Exams & Eye Glasses Hearing Aides & Batteries Laser Surgery for Vision OTC Drugs (Pain Relievers, Antacids, Cold & Allergy) Orthodontia Prescription Sunglasses Psychiatric Care Smoking Cessation Programs Medical Related Transit Exp. Weight Loss Programs-Doctor Prescribed for Obesity

Why use the Healthcare FSA? Provides a tax break you could not get otherwise Most of us don’t have enough “deductible” expenses To deduct expenses total must exceed 7.5% of Annual Gross Income (on personal income tax) Remember not all “medical” expenses are tax deductible –Cosmetic surgery, teeth whitening procedures –Health club expenses, exercise equipment for general health –Vitamins and supplements taken for general health

How much can I save by using the Health Care FSA? When you add your savings from Federal, State and FICA, you save around 30% by “pre- taxing”

What else should I know about the Health Care FSA? Maximum annual contribution limit is $______ All expenses must be incurred during plan year “Date of Service” is key—the actual date you received the service--not when you paid the bill You may only claim reimbursement after the expense has been incurred—not in advance

The Dependent Care FSA For Dependent Child Care & Senior / Elder Care Expenses

Qualifying expenses Include costs you pay for dependent care which allow you (and your spouse if you are married) to work and earn income Expenses for Children under 13 years of age –Baby-sitting Expenses –Day Care Centers & Preschool (pre-K only) –Summer Day Camp (no over-night camp) Care for Adult Dependent*(over age 13) –Care for disabled dependent, in-home nursing care –Senior day care & Eldercare expenses *Dependent must qualify as your dependent for Federal income tax purposes

How much can I save using the Dependent Care FSA? Lets assume for example you have $5,000 annual Dependent Care costs Your tax savings would be about $1,500 if in the lowest tax bracket, over $2,000 in the higher brackets!

What else should I know about the Dependent Care FSA? Maximum Annual Contribution limit $5,000 $5,000 is the limit “Per Family” $2,500 if married filing separately Your spouse must also be working, a FT student, or disabled to qualify Must report Tax ID# or SS# of care provider Compare the Dependent Care FSA vs. Tax Credit

What else do I need to know? To control your risk-Be conservative--Only calculate expenses you know you will incur Annual election-no changes allowed unless you have a qualifying family status change Save your itemized bills and receipts for all purchases You will have online access to your

QUESTIONS?