Both are offered by H R Support & Consulting Services
159 Watkins Shores Road
Casco, ME 04015
Reimbursement Account Tax Savings Illustrations
Reimbursement Request Form
Reimbursement Account Benefit Election Form
Medical and Dependent/Elder Care Expense Worksheets
Allowable Medical Expenses
Important Information on Reimbursement for Orthodontics
1. What you need to know about Medical Reimbursement Accounts
2. What you need to know about Dependent/Elder Care Reimbursement Accounts
3. IMPORTANT ACCOUNT INFORMATION
4. Employee Questions and Answers on Reimbursement Accounts
H R Support & Consulting Services offers 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 on unreimbursed medical expenses could save over $300 a year in taxes with a Medical Expense Reimbursement Account.
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 that vitamins and/or supplements continue to be non-reimbursable unless there is an RX and “Letter of Medical Necessity” from your MD. 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 canceled 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. Before enrolling in the Medical Expense Reimbursement Account, it is important that you read below the “Important Reimbursement Account Information” for information about the extended “Grace Period” for incurring expenses for the Medical Expense Reimbursement Account.
IMPORTANT INFORMATION RE: OVER-THE-COUNTER (OTC) PURCHASES
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 drug expenses 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.
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H R Support & Consulting Services offers a benefit to help you save money on your dependent/elder care expenses. This benefit, called a Dependent/Elder Care Reimbursement Account, allows you to have money deducted pre-tax from the paycheck to pay for eligible dependent/elder care expenses. This means you will save federal, state, and FICA (Social Security) taxes on contributions to your Reimbursement Account. For example, an employee earning $24,000 a year and spending $3,500 annually on dependent/elder care, could save $1,100 a year in taxes with a Dependent/Elder Care Reimbursement Account. NOTE: The “Grace Period” does not apply to this 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 return. 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:
1-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.
2-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.
3-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.
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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. Also, if you participate in or have a Health Savings Account (HSA), you are not eligible to participate in a 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. 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 Thursday. 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. The 90 days applies to both the Dependent Care account and to the Medical Reimbursement Account, even if your employer has implemented the “Grace Period” for the Medical Reimbursement Account which allows foro up to 2 months, 15 days beyond the end of your Plan Year to submit for incurred expenses to be paid from the previous Plan Year, should you have a remaining balance on the last day of the previously 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. This also means that for those participants whose employer has implemented the 2 month, 15 day “Grace Period” for services incurred for the Medical Reimbursement Account, you will forfeit any remaining balance for the previously ended Plan Year if you have not submitted for reimbursement for services incurred during the “Grace Period” extension.
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. For participants who terminate their employment who had a positive balance at the time of termination, you must elect COBRA in order to take advantage of the “Grace Period” extension following the end of the Plan Year in which you terminated 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.
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You must be a participant in the Plan on the last day of the Plan Year for which you are submitting “Grace Period” claims. This is important for any participant who may terminate employment during a Plan Year should s/he have a positive balance in his/her account at the time s/he terminates employment. The participant would need to elect COBRA at the time of termination when provided the forms by the employer.
How Claims Will Be Processed/Which Funds Will Be Used First: Claims submitted during the “Grace Period” will first be paid from any remaining balance from the prior year end until all funds are exhausted. Any remaining balance for reimbursement of a claim that remains after exhausting the prior year balance will next be applied to the new Plan Year’s election amount, provided the participant enrolled in the new Plan Year.
IMPORTANT: Once a claim has been paid from any Plan Year, prior or current, it cannot be re-processed or changed. It is therefore important for a participant to be sure to submit claims in order of dates of services received, knowing reimbursement will first be applied to any prior year remaining balance before it is applied to the current year’s election amount.
Are there special forms for reimbursement that must be used for “Grace Period” claims?
NO. You will use and complete the same form as always, providing the date of service, the service provider’s name, a description of the service received and the dollar amount. (Be sure to sign and date the form.) As stated above, claims will be processed as received and applied FIRST to any remaining balance in your account from the previous Plan Year.
Does the 90-DAY RUN-OUT PERIOD after the end of the Plan Year change? NO. The current 90-day run-out period to submit claims for a previously ended Plan Year will not change. It will apply both to the plan year end run-out and the “Grace Period.” This means if you submit a claim for reimbursement for services received by the last day of the “Grace Period” there will be no additional run-out time allowed to submit that claim for payment. ALL claims must be postmarked or faxed no later than the date noted on the last question of the Q & A of your enrollment communication packet in order to be reimbursed from any remaining prior year balance you may have in your Medical Reimbursement Account.
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.
EMPLOYEE QUESTIONS & ANSWERS ON REIMBURSEMENT ACCOUNTS
September 1, 2015 – August 31, 2016
Q. To whom and when must I return my completed election form?
A. Your completed election form should be returned to Melissa Mullison in the Payroll Office by August 31, 2015.
Q. Will my Social Security benefits (if applicable) be affected by the reduced W-2 reported income?
Since your Social Security benefits 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 contribute are provided in the enrollment information. Please refer to the Reimbursement Account Tax Savings Illustrations and Worksheets.
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 have or participate in a Health Savings Account (HSA), am I still able to participate in my employer’s Medical Reimbursement Plan?
A. No. You are not eligible to participate in your employer’s Medical Reimbursement Account if you have or participate in a Health Savings Account (HSA).
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, 2015.
Q. When will the first reimbursement check(s) be mailed?
A. The first reimbursement checks will be mailed September 10, 2015 for expense reimbursement requests received by noon on Friday, September 4, 2014.
Q. May I submit expenses incurred prior to 9/1/15 for reimbursement?
A. You may not submit expenses incurred prior to September 1, 2015. Only expenses incurred on or after September 1, 2015, are eligible for reimbursement during this plan year.
Q. Under the “grace period”, how will claims from my Medical Reimbursement Account be paid should I have a balance in my account remaining on August 31, 2016?
A. Claims submitted for expenses incurred during the “grace period” in which you have a balance will first be paid from the prior Plan Year’s balance (September 1, 2015 – August 31, 2016) with any remaining amount next applied to the new Plan Year’s election (September 1, 2016 – August 31, 2017 Plan Year). See “Important Account Information” for all details.
Q. When will reimbursement check(s) be distributed?
A. Reimbursement checks will be released Thursday 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, or scan to firstname.lastname@example.org
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 whose mailing address is printed on the reimbursement request form.
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 for reimbursement 90 days following the end of the plan year. This plan year for the Dependent Care Account you will have until November 30, 2016 to submit claims incurred between September 1, 2016 and August 31, 2017. For the Medical Reimbursement Account, with the “grace period,” should you have a balance in your account on August 31, 2016, you will have an additional two months, 15 days (November 18, 2016) to submit for claims incurred to avoid any forfeiture of monies in your Medical Reimbursement Account. However, all reimbursement for services obtained — through September 1, 2016 to November 18, 2016 must still be received by November 30, 2016 or you will forfeit any balance in the Medical Reimbursement Account.
Should you need additional clarification, please do not hesitate to contact H R Support & Consulting Service’s Flex Department, 207-655-5396 or toll-free at 1-866-655-5397