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Employee Services - Accounting, Budgeting & Payroll

CBIZ logoFlexible Benefits Plan — Section 125

Good News! Now you can save even more money with the Take Care Plan!

USD #500 offers a Flexible Benefits Plan for the benefit of all employees (contract employees or non-contract employees working 30 hours or more per week.) This plan, approved under Section 125 of the Internal Revenue Code, makes it possible for you to save money by reducing your taxes.

The plan is administered by CBIZ. The plan year runs from July 1 through June 30.

What is a Flexible Benefits Plan?

In today's workplace, it is virtually impossible for an employer to provide a benefits package that takes into account all the various needs of employees. Each employee has his or her own special needs.

Under the Flexible Benefits Plan, you voluntarily redirect a portion of your gross pay to the plan as flex dollars. These dollars can then be used during the plan year to pay for medical and dependent care expenses you incur.

Remember, these are pre-tax dollars and you will pay no federal and state income tax and no Social Security tax on the amount you redirect to the plan. This means you will have more net income.

The Flex Plan will not affect other pay-related benefits including retirement plans. These benefits will be figured on your original gross pay, before any redirection to the Flex Plan. Simply put, by saving income and Social Security taxes throughout the Flex Plan, you can give yourself a raise.

What Flex Plan Options Do I Have?

  1. The Healthcare Account option allows you to pay with pre-tax dollars for health care expenses that are not covered by insurance. Expenses that you can pay for include Copays (medical and prescription), deductibles, dental expenses, vision expenses, weight-loss programs, Over the Counter (OTC) medications, smoking cessation programs and medical supplies. You may elect to contribute up to $2,500 each plan year.
  2. The Dependent Care Account allows working parents who pay for day care of a dependent under the age of 13 (or any adults or other eligible dependents who are physically or mentally incapable of taking care of themselves) to pay for those expenses with pre-tax dollars by redirecting funds to this option. You may elect to contribute up to $5,000 each plan ($2,500 if married and filing separate).

How Can I Participate?

While you will reduce your taxes immediately by having your group insurance premiums paid with pre-tax dollars through the Premium Savings option, you will need to give some careful thought to the Flex Plan — the Heathcare and Dependent Care Accounts.

Estimate your eligible expenses. To be sure you maximize the tax savings of the plan, you will want to estimate how much money you should redirect to the Healthcare and/or Dependent Care Accounts. A good place to start is a review of the expenses you have incurred in the past year.

Concurrent with each paycheck, the Flex Plan contributions are deposited into an account established solely for the program. Reimbursements from the plan are then drawn on this account.

How Am I Reimbursed?

When you incur expenses that are eligible for reimbursement under the Flexible Benefits Plan, you may either use your TakeCare debit card or complete a Claim for Reimbursement showing the date you incurred your expense, a description of the expense and the amount of the expense. Along with a claim form, copies of your receipts are required for the Dependent Care Account, as well as receipts or Explanations of Benefits (EOB) for the Heathcare Account verifying the information on the claim form. (Retain copies for your files in the event you are audited.)

The TakeCare debit card can be ordered at www.myflexonline.com after CBIZ receives your enrollment. While you generally do not have to submit a claim form, receipts will be required for verification on certain purchases (i.e. over-the-counter medications). For more information on using the TakeCare debit card, click here. .pdf It is always a good idea to save all of your receipts, even if you are not required to submit to CBIZ for verification. Click here for a list of "no-receipt" retailers. .pdf

If you choose not to use the TakeCare debit card, you should mail or fax your Claim for Reimbursement with the necessary receipts directly to CBIZ.

Check your eligible expenses and balance online at www.myflexonline.com or by calling 1-800-815-3023, option 4.

What Else Should I Know About?

Forfeiture:

The payroll deduction that you choose now will be in effect for the entire year. Also, according to the IRS, any unused funds left in your account at the end of the plan year grace period described in your Summary Plan Description must automatically be forfeited. Estimates on expenses should always be conservative for this reason. In addition, funds in one account cannot be transferred to another account (i.e. from the Heathcare Account to the Dependent Care Account and vice versa.)

For USD#500, participants can incur expenses for 2-1/2 months after the end of the plan year. You have until September 15 to incur claims for the plan year that ended the preceding June 30. You will have until December 15 to submit your Claims for Reimbursement for the plan year that ended the preceding June 30.

Dependent Care Credit vs. Dependent Care Account:

The online worksheet at www.mytakecare.com will help you determine whether the current income tax credit or the Flex Plan will be most beneficial to you based upon your income and tax bracket levels.

Changing Contributions:

Your Flex Plan redirection can only be changed at the time of enrollment for each plan year (July 1.) The only exception is a change in your family or employment status. Examples of qualifying changes are (and then certain restrictions still apply):

For more information regarding the Change in Status, you can view the Summary Plan Description at www.cbizesc.com/kckps.

Social Security:

Since your Social Security taxes are reduced under this plan, you may experience a very slight reduction in Social Security benefits when you retire, however, the savings you now receive should far exceed the value of any impact on future Social Security benefits.

Employment Termination:

You may still claim reimbursement from the plan for expenses incurred before your termination date. Be sure to check your Summary Plan Description for the period in which you must file your claims. Also, you may be eligible to continue coverage under COBRA for the Healthcare Account.

Other Insurance Premiums:

Health expenses you incur as a family unit are eligible for reimbursement. If your spouse's employer is offering a Health Savings Account (HSA) and your spouse wishes to participate in the HSA, you may still participate in the Premium Savings Plan and the Dependent Care Account. However, your participation in the Healthcare Account may be limited by IRS regulations. Contact CBIZ for more information.

Only your payroll-deducted premiums sponsored by your employer are eligible under the Premium Savings Plan.

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