2. 1 Flexible Spending Accounts to Include Dependent Care San Mateo County Paul Hackleman

3. 2 What is a Dependent Care FSA? n An IRS Regulated Employer Sponsored Benefit that allows Employee and Spouse to Work n Allows Participants to Recover Out-of- Pocket Payments for eligible Day Care Expenses n Accounts Are Funded from the Participant’s Pre-Tax Payroll Deductions

4. 3 How Does a Dependent Care FSA Work? n Participant Determines Payroll Deduction n Employer Takes Deductions to Fund Selected FSA Accounts n Participant Submits Eligible Claims and Documentation to Mangrove for Reimbursement

5. 4 How Do Dependent Care FSAs Work? n Mangrove Reviews / Processes Claims n Mails / Directly Deposits Bi-Weekly Check n Use of Debit Card –County pays for first two cards –Additional cards are $5 each n Customer Service Representative available 8AM-7PM EST n 24 hour online access to FSA account – up to the minute information

6. 5 How Will a Dependent Care FSA Benefit You? n Pre-Tax Payroll Deductions Reduce Your Taxable Income n Increases Your Spendable Income Since Services Are Paid For from Pre- Tax Dollars

7. 6 A True Pre-Tax Deduction n Contributions are tax free including: –Federal –FICA –State

8. 7 No FSA FSA Gross Monthly Income$5,000$5,000 Pre-Tax Med. Expenses 0 100 Taxable Income$5,000$4,900 Federal Tax (28%) 1,400 1,372 State Tax (7.3%) 365 358 FICA Tax (7.65%) 383 375 After-Tax Healthcare Expenses 100 0 Monthly Spendable Income$2,752 $2,795 FSA SAVINGS TOTAL $43 mo./$516 yr. Example - $60,000 Income

9. 8 Who is Eligible? n Regular Employees 20+ Hours per Week n Participation Begins: –Current Employees – January 1 (enroll during open enrollment) –New Employees – First of a Month Following 28 Days of Employment

10. 9 Reimbursement Account n Reimburses Out-of-Pocket Day Care Expenses for an Eligible Dependent n Eligible Dependents must be claimed as an exemption on your tax return n Incurred by Employee to Allow the Employee to Work n Benefit Is Reimbursed Up To Your Year-to-Date Payroll Deductions

11. 10 How Much Can I Contribute? n Dependent Care Account –Minimum $25 per year –Maximum $5,000 annually –$2500 if Married Filing Separately

12. 11 What are Dependent Care Eligible Expenses? n Au Pair Services n Nannies n Nursery School n Private Pre School n Before and After Care n Summer Day Camp

13. 12 Eligible Dependent Care Expenses n Fees for – Sick Child Center – Day Camps – Licensed Day Care Centers – Baby sitters – Daycare for an Elderly Dependent – Day care for a Disabled Dependent

14. 13 Ineligible Expenses  Dependent Care FSA is Strictly for the “Well Being of the Child” –Overnight Camps –Registration Fees –Babysitting for “Social Events” –Tuition Expenses –Leave of Absence of Vacation

15. 14 Ineligible Expenses n Any Day Care Expense with a Future Date of Service n Food Expenses if Separate from the Day Care Expenses n Expenses for Transportation, Books, Clothing, or Entertainment n Expenses incurred prior to the start date of the FSA plan – or incurred after your termination from the FSA plan.

16. 15 Termination of Employment n Once an employee terminates employment: –No more incurred expenses are eligible –Need to submit receipts within 60 days

17. 16 Benny  Makes Them EASY to Use! Introducing The Benny  Debit Visa  Card for All Your Qualified FSA Expenses

18. 17 Benny Debit Card n VISA Benny Card Can be Used if the Day Care Provider accepts VISA n VISA Benny Card is used as a “Credit” Card n VISA Benny Card Accrues a Balance as Your Payroll Deductions Occur

19. 18 How Does It Work? n At the time of payment for Day Care… The Card gets SWIPED... And, payment is automatically deducted from your FSA account, provided you have a balance Then, save your receipts in an envelope. It’s that EASY!

20. 19 Benny Debit Card n For Current Participants –Your Benny Card will not expire for 5 years –Funds will be loaded on your Benny Card as the payroll deduction occurs –Same Benny Card can be used for both Healthcare FSA and Dependent Care FSA

21. 20 Benny Debit Card You Need to ACTIVATE and SIGN the Cards   To activate call the number on the sticker on the Card or log onto www.benefitone.comwww.benefitone.com   Customer Service Representatives are Available 8AM – 7PM EST   Each eligible user signs his or her name.

22. 21 Plan Rules for Dependent Care FSA n Expenses Must Be Incurred (Services Rendered) While An Active Participant n Funds Accrue only as Payroll Deductions Occur n Run Out Period (90 days) n Reduction in Taxable Income May Result in Reduced Social Security Benefits

23. 22 Plan Rules n Cannot Change Deduction Unless You Experience a Family Status Change: (must be reported within 30 days of the event) –Marriage or Divorce –Birth or Adoption –Death of Spouse/Dependent –Change in Employment Status of Spouse or Self –Increase or Decrease in Day Care Provider Fees –FMLA or Non-FMLA Leave

24. 23 How Do I Enroll? n Complete the Estimated Expenses Worksheet n Return a Completed Election Form to Human Resources - Pony HRD-133* *Current Participants – Re-enrollment Process

25. 24 The Better You Plan The More You Will Save!