To: Participating Boards and Eligible Employees
From: Howard Van Mersbergen, Vice President of Employee Benefits
Flexible Benefits Plan
Participants may elect to (1) have their health, dental and other insurance premiums taken out of their paychecks pre-tax (premium-only feature); (2) may contribute up to $2,500 per year on a pre-tax basis to pay for medical expenses not covered by insurance (otherwise known as the Health Flexible Spending Account or FSA); (3) may contribute up to $5,000 on a pre-tax basis to pay dependent care expenses (e.g. childcare, pre-school, and before/after school care expenses fall into this category); and (4) if your school offers a health savings account plan, the employee contributions can be taken pre-tax from their paychecks. To be able to do the above, by law, you must have a Section 125 Plan in place.
Any monies contributed to the above accounts are not subject to Federal income taxes, Social Security, and in most cases, State and Local income taxes. Therefore, by setting aside pre-tax dollars to pay for eligible expenses like medical, dental, vision, dependent care expenses, co-pays, and deductibles, participants are saving an average of over $300 in taxes per year.
Participating schools also benefit as payroll taxes are reduced for every dollar that participants put in to the Flex Plan. Therefore, for every dollar that is contributed to the Plan, the school does not pay payroll taxes on these monies.
There is a change to the eligibility due to the Affordable Care Act. Effective September 1, 2014, eligibility must match the eligibility for your health coverage.
Deadline for Submitting Claims – November 30
Participants still have a 90 day grace period from September 1 until November 30 to submit claims that were incurred during the current plan year. After November 30, unused funds are forfeited. Federal law requires that all monies contributed to the spending accounts be “spent” on expenses incurred during the plan year, otherwise the contributed monies are forfeited. For this reason, it’s important to plan carefully and set aside money for “predictable” expenses.
Now is a good time to check your account balance and make plans to use any remaining balance to avoid forfeiting your money. Contact Arcadia Benefits Group at 866-329-4333 for information on your account balance or visit the Arcadia web site at www.arcadiabenefits.com.
Key Features of the Plan
The Flexible Benefits Plan contains these attractive features:
1. Tax Advantages: You are reducing your taxable income and utilizing pre-tax money to pay for health care and/or dependent care expenses. Without participating, you would still pay for these expenses but you would use after-taxes monies.
2. Premium-Only Accounts: The Flexible Benefits Plan is a Section 125 plan. Therefore, the Plan can be used to have your health, dental and other insurance premiums deducted pre-tax out of your paycheck to pay for your portion of the premium. Again, more money in your pocket.
3. Access to Your Contributions:
• Health Flexible Spending Account: Your contributions to the Health Flexible Spending Account (FSA) are deducted pre-tax via payroll deduction in equal amounts from your paycheck throughout the year. However, the full amount that you elect is available from the first day of the plan year.
• Dependent Care Spending Account: Your contributions to the Dependent Care Spending Account (DCS) are deducted pre-tax via payroll deduction in equal amounts from your paycheck throughout the year. Claims are paid to the extent that funds are available in your account and you have eligible dependent care expenses.
4. On-line, E-mail or Fax Claims: You have the option to go on-line, to e-mail or fax your claims to Arcadia Benefits Group. To e-mail claims, send a copy of your invoice and paid amount to Arcadia at firstname.lastname@example.org. (Please don’t include your social security number on the claim form if submitting by email.) To make a claim on-line, please go to www.arcadiabenefits.com. First time users will need to register to create a log-in name and password.
5. Claim Processing / Direct Deposit: Claims are processed and payments are issued daily. Arcadia guarantees that all claims will be processed within two (2) business days of receipt. All reimbursements for eligible expenses are made to you by direct deposit.
6. WebSite Access: You may also print claim forms from our website. Go to www.CSIonline.org, click on “Employee Benefits” and then under “Flexible Benefits” click on “Forms”. In addition, you may access your account on-line to check claims, reimbursements, and view your account balance at the Arcadia website: www.arcadiabenefits.com.
Using the Health FSA with HSA Plans
As mentioned earlier, the Health FSA may be used for eligible expenses not reimbursed through another plan. However, for a high-deductible health plan with an HSA component, FSA reimbursement is limited to dental and vision expenses only.
Enrolling for Plan Year Beginning September 1, 2014
Employees eligible for your school’s health coverage are eligible to participate in the Flexible Benefits Plan. To enroll:
1. Carefully read the Q&A brochure to learn about the features of the Plan and use the worksheet to assist with estimating predictable expenses.
2. Complete the enrollment form. You will be automatically enrolled in the premium account if your premiums are deducted from your paycheck pre-tax. For the Health Flexible Spending Account, use Line B for the amount to be used for expense reimbursement; use Line C, the “Limited Purpose” line, ONLY if you are covered for health by a Health Savings Account (HSA). Line D is for dependent care expenses.
3. Submit the completed enrollment form to your school office. Each employee that is eligible for the FSA, DCA or HSA must complete an enrollment form to either participate in the Plan or to decline participation. For Premium-Only Plans, employees do not need to complete the form.
COBRA for the Flexible Benefit Plan
As a reminder, if a participant leaves employment they may elect COBRA if they have a positive balance in the Health Flexible Spending Account at the time of termination. This election can be done via our Insurance Office. If you are interested or want more details on COBRA benefits, please contact Lois Landheer, U.S. Insurance Specialist, at 616-284-3233 or at LLandheer@csionline.org.
Plan Document, SPD, Non-Discrimination Testing and 5500’s
Every school that offers a Section 125 Plan is required to have (1) a plan document, (2) summary plan description (SPD), except for premium-only plans, and (3) an annual non-discrimination test completed. In addition, for schools with more than 100 employees an annual 5500 report has to be filed with the IRS. Through our Plan, we provide all of the above items as part of our annual servicing of the Plan. Arcadia Benefits Group, our third-party administrator, completes the annual non-discrimination testing and forwards a copy to the school’s office.
Each school will want to have a copy of the plan document, SPD and the annual non-discrimination testing on file. In addition, every eligible employee should receive a copy of the SPD when they are first eligible for the plan (premium-only plans do not have this requirement).
If the school is missing the plan document, please feel free to print a copy at our website: www.CSIonline.org/benefits, under Flexible Benefits click on “Publications”. Any questions, please contact Sharon Feikema at SFeikema@CSIonline.org or 1-877-274-8796 ext 228; direct 616-284-3228.
Employer Contributions to the FSA
If your school makes contributions to the FSA for employees, there are new regulations:
1. There can be no more than a dollar for dollar match of employee contributions; or
2. Do not exceed $500 in contributions to the employee account.
Contacting Us for Support
To print a flex claim form, go to www.CSIonline.org/benefits and under Flexible Benefits select Forms. To access your account information online, select Links. If you have not yet registered for an online account, contact Sharon for your school code (one-time code needed for setting up online access). As always, if you have questions about the Flexible Benefits Plan or any previous Update, please visit our website at www.CSIonline.org - contact Sharon by phone at 616-284-3228 or 877-274-8796 x228, or by email at sfeikema@CSIonline.org.