1. 1 LOGICAL DEDUCTIONS, LLC 167 Cherry St. Suite 159 Milford, CT 06460 Keith Weindling 203-268-9295

2. 2 Flexible Spending : Flexible Spending : Health Care Dependent Care Transit Benefits

3. 3 FLEXIBLE BENEFIT EXAMPLES Medical Co-Pays Prescription Co-Pays Dental Co-Pays Eye Glasses Contact Lenses Chiropractor Dependent Care Day Care Expense Transit Expense (Train) Parking Expense Hearing Aid Counseling

4. 4 A Flexible Spending Account is an easy way for participants to pay for health care, dependent care, and transit expenses that are not covered by another benefits plan through payroll deductions on a pre-tax basis. The program is governed by the IRS. What is a Flexible Spending Account?

5. 5 Why Offer Flexible Spending Accounts? Saves participants and clients money –FSA deposits are made on a pre-tax basis –EMPLOYERS save on matching FICA contributions and offer an excellent fringe benefit to all employees. –PARTICIPANTS save on Federal, State, and local income taxes, as well as FICA Taxes. –Encourages participants to make appropriate health care spending decisions

6. 6 With FSAs Without FSAs Gross Salary$35,000$35,000 Health, Dependent, and Transit Expenses Paid Through the FSAs $ 5,000 -0- Taxable Salary$30,000$35,000 Taxes (30%)$ 9,000$10,500 Health, Dependent, and Transit Expenses Not Paid Though the FSAs -0- $ 5,000 Take-home Pay$21,000$19,500 Employee Savings$1,500 FSA Tax Savings Example

7. 7 With FSAs Without FSAs Gross Salary$35,000$35,000 Health, Dependent Care, and Transit Expenses Paid Through the FSAs $ 5,000 -0- Taxable Salary$30,000$35,000 Taxes (30%)$ 9,000$10,500 Health and Dependent Care Expenses Not Paid Though the FSAs -0- $ 5,000 Take-home Pay$21,000$19,500 Employer Savings$382.50 per employee FSA Tax Savings Example

8. 8 Medical, dental and other expenses not covered by participant’s health plan Deductibles and co-payments, if applicable for participant’s plan or participant’s spouse’s plan Vision expenses (contact lenses, lasik surgery, eyeglasses, eye exams, etc.) Hearing expenses (hearing exams, aids) Psychotherapy, counseling Health Care Reimbursable Expenses

9. 9 Licensed nursery schools, day camps, day care centers Services from individuals who provide care inside or outside participant’s home (care provider may not be participant’s dependent or a child age 13 or younger). Dependent Care Reimbursable Expenses

10. 10 Qualified transportation expenses generally include payments for the use of mass transportation (train, subway, bus fares are typical examples). Parking expenses include the costs of parking a vehicle in a facility that is near the employee’s place of work or parking at a location from where the employee commutes to work. (for example, the cost of parking in a lot at the train station so that the employee can continue their commute on the train) Transit and Parking Expenses

11. 11 Health Care FSA Plan Maximum is set by employer Dependent Care FSA Plan Maximum is $5000 Transit Expense Guidelines Parking: Transit: FSA Contribution Amounts

12. 12 Use it or lose it (national forfeiture rate is only 5%) Uniform coverage Limited opportunity to revoke or make new elections IRS Limitations

13. 13  marriage or divorce  birth or adoption of a child  death of a dependent or spouse  loss of a dependent child’s eligibility  commencement or termination of your spouse’s employment  change in employment status (from full-time to part-time or vice versa)  unpaid leave of absence taken by you or your spouse Family Status Changes

14. 14 FSA Plan Fees One Time Plan Setup:$ 350.00 Annual Renewal :$ N/C Monthly: $ 35.00 Base $ 3.50 per participant All checks sent directly to each employee. Reimbursements may be submitted monthly.

15. 15 Employer Savings Example: # of Employees:____10____ Health Care Contribution :___$6,000___ Dependent Care Contribution :___$10,000__ Total Employee Contributions:___$16,000__ Annual Employer Savings (FICA 7.65% x total contributions):___$1,224___ Estimated Annual Fees:____$840____ TOTAL EMPLOYER SAVINGS:___$384___ Flexible Savings Plans are an excellent benefit to all employees !! In this example, each employee is also saving over $450 ($1600 in pre-tax contributions times FICA + FIT +SIT )