Two reimbursement plans are available to Brunswick School Department employees:
DEPENDENT/ELDER CARE REIMBURSEMENT
MEDICAL EXPENSE REIMBURSEMENT
Both are offered by H R Support & Consulting Services
159 Watkins Shores Road
Casco, ME 04015
Reimbursement Request Form
Reimbursement Account Benefit Election Form
EMPLOYEE QUESTIONS & ANSWERS ON REIMBURSEMENT ACCOUNTS
Q. To whom and when must I return my completed election form?
A. Your completed election form should be returned to Suzanne Levesque in the Payroll Office by June 30, 2014.
Q. Will my Social Security benefits (if applicable) be affected by the reduced W-2 reported income?
A. Social Security benefits (if applicable) are determined primarily by your top thirty-five years’ average earnings; the reduction in reported income will only negligibly impact the determination of benefits.
Q. How do I determine how much money to contribute (have withheld from my paycheck)?
A. You need to carefully estimate what you anticipate you will spend on eligible medical care and/or dependent care expenses during the year, including any applicable deductions and co-payments. Allow only those expenses you are reasonably sure you will incur. If you overestimate and do not use the full amount during the Plan Year, you lose it.
Explanations and forms to help you determine how much to cotribute are provided in the enrollment information. Please refer to the Reimbursement Account Tax Savings Illustrations and Worksheets.
Q. If I have or participate in a Health Savings Account (HSA), am I also able to participate in my employer’s Medical Reimbursement Plan?
A. No. If you participate in or have a Health Savings Account, you are not eligible to participate in your employer’s Medical Reimbursement Plan.
Q. Must I submit an election form even if I choose not to participate in the reimbursement account program?
A. You must submit an election form indicating that you choose not to participate in the reimbursement account program.
Q. If I elect to participate in the plan, when will the first contribution (payroll withholding) be made from my payroll check?
A. The first withholding will be made from the first payroll check you receive in September, 2013.
Q. When will the first reimbursement check(s) be mailed?
A. The first reimbursement checks will be mailed Thursday, September 11, 2014, for expense reimbursement requests received by noon on Friday, September 6, 2014.
Q. May I submit expenses incurred prior to 9/1/13 for reimbursement?
A. You may not submit expenses incurred prior to September 1, 2014. Only expenses incurred on or after September 1, 2014, are eligible for reimbursement during this plan year.
Q. When will reimbursement check(s) be distributed?
A. Reimbursement checks will be released Thursdays of each week.
Q. When must my request for reimbursement be received in order to be included in the next scheduled check run?
A. Your reimbursement request must be received no later than noon, Friday, to be included in the following Thursday mailing. When mailing your request for reimbursement, please assume the postal service will take two to four days to deliver your request to us. You may fax claims to us at (207) 655-6636.
Q. How do I submit a request for reimbursement?
A. You must complete a Reimbursement Request Form, attach a receipt or other proof of expense, and sign and date the form. The form should be send to H R Support & Consulting Services (mailing address printed on the reimbursement request form). Included with your election confirmation form will be a reimbursement request form and H R Support & Consulting Services Flex Administration envelope. Each time you submit a reimbursement request, a new form and envelope will be provided with your reimbursement check.
Q. Why must I sign and submit a Reimbursement Request Form each time I want to be reimbursed?
A. Federal regulations for section 125/129 plans require third party substantiation that an expense has been incurred. Additionally, your signature on each form confirms that you are not receiving reimbursement for those expenses from any other source.
Q. Is there a minimum reimbursement account?
A. If you submit a request for reimbursement for expenses less than $20.00, payment will be delayed until we have received additional requests so that the total equals or exceeds $20.00. At the end of your plan’s 90-day run-out period, all eligible requests for reimbursements will be paid even if they total less than $20.00.
Q. If I am out on Family Medical Leave, what will happen to my reimbursement account(s)?
A. H R Support & Consulting Services staff works closely with your benefits office to handle these cases. Generally, deductions are not made while you are on FMLA leave so claims incurred during that period are not eligible for reimbursement. However, you may submit claims incurred and paid before you went on leave and after, if you re-enter the plan.
Q. Where will my reimbursement check be sent?
A. Your reimbursement check will be sent to the address that you provide when enrolling in the plan. If you have a name or address change, please notify us by calling toll-free 1-866-655-5397.
Q. How long after the end of the plan year do I have to submit expenses for reimbursement?
A. You may submit requests 90 days following the end of the plan year. This plan year you will have until November 29, 2014 to submit claims incurred between September 1, 2014 and August 31, 2015.
WHAT YOU NEED TO K NOW ABOUT
MEDICAL EXPENSE REIMBURSEMENT ACCOUNTS
H R Support & Consulting Services serves as your employer’s third party administrator for a plan to help you save money on medical expenses not covered by insurance or other sources. This benefit plan, called a Medical Expense Reimbursement Account, allows you to have money deducted pre-tax from your paycheck to pay for medical expenses not covered by insurance or other sources. This means you will save federal, state, and FICA (Social Security) taxes on contributions to your Medical Expense Reimbursement Account. For example, an employee earning $24,000 a year and spending $1,000 annually or unreimbursed medical expenses could save over $300 a year in taxes with a Medical Expense Reimbursement Account.
Is Dependent/Elder Care Reimbursement Account right for you?
There are two ways to save tax dollars on the money you use for dependent/elder care bills. One way is to claim a credit on your income tax form. The other is to pay for dependent/elder care expenses with pre-tax dollars from a Dependent/Elder Care Account.
Because each case is different, we cannot tell you which way will be most beneficial to you. It is no longer advantageous to use a combination of the dependent care tax credit and Dependent/Elder Care Reimbursement Account to save tax dollars on dependent/elder care expenses. Legislation effective January 1, 1989, states that each dollar you put into a Dependent/Elder Care Account will reduce by one dollar the maximum amount you may use to figure your tax credit.
For example, if you have one child and fund a Dependent/Elder Care Reimbursement Account with $1,000, the maximum amount you may use to determine your tax credit is reduced from $2,400 to $1,400.
To take advantage of the tax savings allowed under a Dependent/Elder Care Reimbursement Account, you must provide the name and tax identification or social security number of your dependent/elder care provider when submitting your request for reimbursement.
How you can benefit from using a Dependent/Elder Care Reimbursement Account: HR Support & Consulting Services reimburses you for eligible dependent/elder care expenses under the following conditions:
-Expenses must be incurred to enable you (and, if you are married, your spouse) to work full or part time or attend school full-time.
- Dependents who qualify include your children under age 13 and any other dependent (such as a disabled child 13 or older, spouse, parent) who is physically or mentally incapable of self-support and whom you claim as a dependent on your federal tax return.
- Reimbursable expenses include day care expenses, before and after school (through age 12) and most day camps (overnight camp expenses are ineligible).
You may contribute up to $5,000 to a dependent/elder care account ($2,500 if you are married and file separate returns). If the annual earned income of either you or your spouse is less than $5,000, the maximum you may contribute will be that lesser amount.
Note: Participants must still file IRS Form 2441 when filing federal tax return when participating in a Dependent Care Reimbursement Account.
Please read the following important information before you sign up for a Reimbursement Account.
Tax Information: Reimbursement accounts offer Brunswick School Department employees attractive tax savings on allowed expenses. But remember, you cannot claim expenses reimbursed through these accounts as income tax credits or deductions. Note: If you participate in or have a Health Savings Accout (HSA), you are not eligible to participate in your employer’s Medical Reimbursement Account.
Changing Contributions: Once you elect to put a certain amount into your Reimbursement Account(s), you cannot change that contribution until you make your election for the next Plan Year, unless you experience a family status change. The status changes that most plans allow are:
- Marriage, divorce, death of a spouse, legal separation or annulment;
- Birth, adoption or placement for adoption of a child, or death of a child;
- Change in employment status of the employee, spouse or dependent that affects benefits eligibility;
- A change in residence of the employee, spouse or dependent that affects eligibility coverage;
- Dependent satisfies or ceases to satisfy dependent eligibility requirements.
In any of these cases, you may change your account contribution as long as you apply within 30 days of the event and the change in contribution is on account of and corresponds with the allowable status change. Each year you will receive a new election form to confirm or change your contribution amount, or to decline participation for that Plan Year.
Reimbursement Account Withdrawals: You may withdraw money from your Reimbursement Account(s) for eligible expenses you have already incurred. Simply fill out a Reimbursement Request Form and attach a copy of your bill, paid receipt, or insurance explanation of benefits showing date, type of service, provider, and amount. Neither cancelled checks nor credit card receipts can be accepted as proof of date of service.
H R Support & Consulting Services makes payments weekly, or as often as your employer funds the account for dependent/elder care. Participants whose eligible reimbursement requests are received by noon Friday will be mailed checks by the end of the day the following Wednesday. You will receive payment for eligible dependent/elder care expenses up to your current account balance. Unpaid balances will be held and paid during the following weeks until the full amount has been paid to you (up to the amount of your contributions). Reimbursement for medical expenses will be made up to the amount of your annual election. At the end of the Plan Year you will have 90 days to submit claim requests for services incurred during the ended Plan Year.
Forfeiture of Benefits: You must plan carefully to avoid putting more money into your account(s) than needed. Any balance you leave unspent at the end of the Plan Year will be forfeited, according to Internal Revenue Service rules.
Terminating Employment: Your contributions to your Reimbursement Account(s) will stop when you terminate employment. You will have 90 days after the end of the Plan Year to submit requests for expenses as follows:
- For dependent care expenses that are incurred during the Plan Year (as long as you and your spouse, if applicable, continue to work, seek employment, or attend school full time);
- For medical expenses that are incurred while you are a participant in the Plan. If applicable, COBRA continuing coverage will be made available to you if you wish to make after-tax contributions to your Medical Reimbursement Account after you end your employment.
Social Security: Since contributions to your Reimbursement Account(s) are made with pre-tax dollars, you do not pay Social Security taxes on those dollars. You may incur some erosion of your wagebase for retirement purposes. Since Social Security benefits are now determined primarily by your thirty-five years’ average earnings, unless your annual cafeteria plan deductions are significant, any reduction will be minimal. When compared to the tax savings, in most situations, the tax savings realized while using the pre-tax benefit outweigh any decrease in social security earnings in later years.
You can use a Medical Expense Reimbursement Account to pay for your family’s health care expenses incurred during the Plan Year that are not reimbursed by your medical or dental insurance plan or any other source. The expenses you can pay for with this account include medical and dental plan deductibles and coinsurance payments, physical exams, well-child visits, eye examinations, glasses, contact lenses and solutions, and any other allowable medical expense that is not paid for by insurance or other sources.
Please note: You are ineligible to participate in this account if you have or participate in a Health Savings Account (HSA). That would be double dipping.
Your account cannot be used to cover cosmetic surgeries, teeth whitening, or wellness programs. Please refer to the “Allowable Medical Expense” sheet which provides a more complete list of services. Proof that an eligible expense has been incurred, such as a bill, receipt or insurance explanation of benefits showing date, type of service, provider, and amount is required. Neither cancelled checks nor credit card receipts can be accepted as proof for date of service.
To decide how much of your salary to set aside toward a Medical Expense Reimbursement Account, please refer to the Medical Expense Worksheet below. Before enrolling in the Medical Expense Reimbursement Account, please read “Important Reimbursement Account Information.”
Important Information Re: Over-the-Counter (OTC) Purchases:
Caution on putting monies into your medical reimbursement account for over-the-counter drugs and medications!
As a result of the Health Care and Education Reconciliation Act of 2010, effective January 1, 2011 (regardless of your Plan Year), over-the-counter drugs and medications will be REIMBURSABLE expenses for participants ONLY IF THE DRUGS ARE PURCHASED WITH A PRESCRIPTION. Because of this new law, it is very important that employees enrolling in the Medical Reimbursement Account do not set aside large amounts of monies anticipating reimbursement for over-the-counter drugs & medications that will be purchased after January 1, 2011 as many of the items previously allowed for reimbursement will no longer qualify under the Health Care and Education Reconciliation Act of 2010.
MEDICAL CARE EXPENSE WORKSHEET
Anticipated Medical Expenses:
x-ray or lab fees________
Anticipated Vision Expenses:
laser eye surgery________
prescription eyeglasses or sunglasses________
Anticipated Dental Expenses:
crowns, caps, bridges________
Other Anticipated Expenses:
hearing aids & batteries________
smoking cessation classes________
Total Estimated Expenses:______________
Divide the figure by the number of pay periods to determine the amount per pay period.
Allowable Medical Expenses (partial list): Reimbursement forms can be obtained at 222.hrscflex.com. To the extent these services are not reimbursed by insurance or any other source, you may submit the charges for payment from your Medical Expense Reimbursement Account.
- alcoholism treatment
- ambulance service
- artificial limbs and teeth
- birth control pills
- braille books & magazines (excess over regular prices)
- car (special equipment within for disabled driver)
- contact lenses/solution
- co-pays (office visits)
- deductions & coinsurance
- dental care (including dentures)
- drug addiction treatment
- examination, physical
- examination, eye
- fees for medical services provided by: physicians/surgeons/other licensed medical practitioners practicing within the scope of their licenses, including: Christian Science Practitioners, Dentists & Orthodontists, Licensed Clinical Social Workers, Midwives, Opthamologists & Optometrists, Podiatrists, Practical Nurses, Psychiatrists, Psychoanalysts, Psychologists (medical care only)
- guide dog or similar animal & its upkeep
- hearing aids & batteries
- home improvements or special equipment installed (for medical reasons or to accommodate disability; less any increase in value of home)
- hospital services
- laboratory fees
- lead-based paint removal (to prevent a child who has lead poisoning from eating paint)
- legal abortion
- lodging & meals when at institution to receive medical care (daily limits apply)
- medical expenses (if separate fee on school bill)
- mentally challenged, special home for
- mileage-medical care (rate changes annually-set by IRS)
- nurses’ expenses & board
- nursing services
- nursing home (if primarily for medical care)
- operations & related treatment (non-cosmetic)
- organ transplant donor’s expenses
- oxygen & equipment
- over-the-counter drugs & medications
- over-the-counter medications: as a result of the Health Care and Education Reconciliation Act of 2010, effective 1/1/2011, over-the-couunter drugs & medications are only reimbursable if the drugs are purchased with a prescription. Letter of medical necessity required.
- prescribed drugs and medicines
- radial keratotomy (laser eye surgery)
- rental of medical equipment
- special schooling for child w/severe learning disabilities (caused by mental or physical impairments)
- support or corrective devices (such has orthopedic shoes)
- smoking cessation course
- telephone equipment for the deaf
- television equipment for the deaf
- therapy (as medical treatment only)
- transportation to essential medical care
- wig for baldness due to medical reasons
Note: expenses for cosmetic services or general health improvement items (i.e., health club, teeth whitening, etc.) are not allowable.
Standards for Reimbursing OTC Drugs Include The Following:
- The OTC drug must generally be accepted as falling within the category of medicine and/or drugs
- The item is not a toiletry or cosmetic
- The OTC drug must be legally procured
- The OTC dug must be primarily for medical care and must not be considered a cosmetic procedure
- The OTC medicine or drug must be for (1) the diagnosis of disease, (2) the cure, mitigation, treatment or prevention of disease or for the purpose of affecting any structure or function of the body
- The reimbursement request does not involve an unreasonable stockpiling
Should you have any questions regarding reimbursable over-the-counter medicines or drugs, please contact H R Support & Counseling Services’ Flex Administration Department at 207-655-5396 or 1-866-655-5397.
REIMBURSEMENT ACCOUNT TAX SAVINGS ILLUSTRATIONS (these are examples only – please consult your tax advisor to estimate your own tax savings)
Example 1: Annual Household Income $24,700.00. Tax-Filing Status: Single. Withholding Allowances: 1.
Weekly Earnings: $475.00 without Flex — $475.00 with Flex
Medical Contribution: $0.0 without Flex — $10.00 with Flex
Taxable Wages: $475.00 without Flex — $465.00 with Flex
Taxes & Withholding: $114.52 without Flex — $111.39 with Flex
Net Take Home: $360.48 without Flex — $353.61 with Flex
Out-of-Pocket Medical Expenses: $10.00 without Flex — $0.00 with Flex
Spendable Income is: $350.48 without Flex — $353.61 with Flex
Weekly Savings: $0.0 without Flex — $3.13 with Flex
Annual Extra Spendable Income: $3.13 x 52 weeks=$162.76
Example 2: Annual Household Income $45,000.00. Tax-Filing Status: Joint. Withholding Allowances: 3.
Weekly Earnings: $865.38 without Flex — $865.38 with Flex
Medical Contribution: $0.0 without Flex — $25.00 with Flex
Dependent Contributions: $0.0 without Flex — $96.15 with Flex
Taxable Wages: $865.38 without Flex — $744.23 with Flex
Taxes & Withholding: $184.48 without Flex — $148.56 with Flex
Net Take Home: $680.90 without Flex — $595.67 with Flex
Out-of-Pocket Medical Expenses: $121.15 without Flex — $0.00 with Flex
Spendable Income is: $559.75 without Flex — $595.67 with Flex
Weekly Savings: $35.92 with Flex
Annual Extra Spendable Income: $35.92 x 52 weeks $1,867.84
(These are examples only. Please consult your tax advisor to estimate your own tax savings.)
REIMBURSEMENT FOR ORTHODONTICS: As you are aware, some dental services received are not completed in one visit. Examples of this include orthodontic services for braces, crowns, root canals, etc. This being the case, it is important that you understand that you are able to be reimbursed for the amount of the full cost for services actually received at the time you submit for reimbursement. You are still able to receive the full pre-tax advantage, however, by understanding how to submit your claim(s).
Please note the following regarding reimbursement for orthodontics from your medical reimbursement account:
1) You can be reimbursed for the initial down payment required provided the receipt contains the following information: Name of the Service Provider, a brief description of what the amount of the required down payment is for, i.e., consultation, x-rays, etc., and The dollar amount required as the down payment
2) For the remainder of the Plan Year you can receive reimbursement for the monthly payment for services received for the remaining months of the Plan Year. You can submit a copy of the contract or a statement from the provider that clearly states the monthly amount you have agreed to pay.
Example: Jane’s daughter Susan will have braces put on in January, 2014. The process will take approximately 18 months for a total cost of $2,700. The orthodontist requires a down payment of $1,000 for the initial visit and set up of the braces at the time of the visit in January. The $1,700 balance is to be paid in payments of $100 per month for the next 17 months. Jane should elect the following for her medical reimbursement account in order to receive a pre-tax advantage for the full cost of the braces:
For the plan year January 1 through December 31, 2014: $1,000 for the required down payment plus $1,100 ($100×11 months) for a total of $2,100 for the 2013 Plan Year.
For the next Plan Year, January 1 through December 31, 2015: Jane should set aside the remaining amount in her medical reimbursement account $100 per month times 6 for a total of $600.
Questions: If you have any questions about your Reimbursement Account(s), please call
H R Support & Consulting Services at 207-655-5396 or toll-free at 1-866-655-5397.
We welcome your questions.
Please feel free to call H R Support & Consulting Services at
207-655-5396 or 1-866-655-5397.