Deadline to Enroll in the Flex Spending Account is Friday, December 9

Posted by DStayman on 6th December 2011

money_mess_o_billsDeadline to Enroll in the Flex Spending Account is Friday, December 9

The Flex Spending Account (FSA) is a program PEF offers to help staff save money on their taxes. The FSA has two benefits, the Health Care Flexible Spending Account (HCFSA) and the Dependent Care Benefit Account (DCBA)–that help you pay for health care or dependent care with pre-tax dollars. Even if you enrolled last year you must enroll again this year. The deadline to enroll is December 9, 2011.

Enrolling in either benefit is voluntary. Savings will vary depending on your annual income, the number of dependents you claim on your taxes, and the amount of money you contribute through payroll deductions to your HCFSA and/or DCBA.

How does the Health Care Flexible Spending Account work?

If eligible, you may contribute any amount up to $1,500 annually [1] in pre-tax dollars to pay for out-of-pocket medical, dental or vision costs not reimbursed by health insurance. Some examples of allowable costs are prescription drug copayments, dental charges and orthodontia fees paid to non-participating providers, deductibles, laser eye surgery, and contact lenses.

Recent changes in federal law limit OTC drug reimbursement. Effective January 1, 2011, OTC drugs will require a doctor’s prescription to be eligible for reimbursement under the HCFSA.  As a result, the debit card will no longer work for most over-the-counter drugs. Other OTC products (e.g. hearing aid batteries, band-aids, contact lens solution, etc.) are not affected by the new law.

The following are examples of OTC medications that will require prescriptions for reimbursement:

Acid controllers

Allergy & sinus medicines

Antibiotic products

Anti-diarrheal medicines

Anti-gas products

Anti-itch & insect bite  products

Cold sore remedies

Cough, cold & flu medicines

Diaper rash ointments/creams

Digestive aids

Feminine anti-fungal/anti-itch

Hemorrhoid treatment

Laxatives

Motion sickness medicines

Pain relief medicines

Respiratory treatments

Sleep aids & sedatives

Stomach remedies

Vitamins

Effective January 1, 2013, the IRS will limit medical Flexible Spending Account annual contributions to $2,500. If you have a big medical expense coming up such as orthodontia, then plan ahead for 2012 to get the tax benefit.

How does the Dependent Care Benefit Account work?

If you pay a caregiver to care for your child, elderly parent, or disabled spouse in order to work, you can set aside up to $5,000 in pre-tax salary through payroll deduction to help pay for these expenses. Examples of expenses eligible for DCBA reimbursement include child care expenses (through age 12), summer day camp, before/after school programs and adult day care.

To enroll in the HCFSA for either Health Care or Dependent Care Accounts or both, you must estimate your annual out-of-pocket costs, and then decide how much money to have withheld from your paycheck. It’s important to estimate conservatively because if you don’t file claims for reimbursement of the entire amount, you will lose any remaining funds.

How do I file a claim?

Once enrolled you can fill out an electronic claim form online, mail or fax claims, then receive reimbursement by check or direct deposit. If you use the debit card, you may be asked to submit a copy of a receipt to verify that a card transaction was for a qualified expense. You can choose reimbursement by check or direct deposit into your bank account. The Take Care plan website http://www.takecareplans.com/cbp/home.asp gives you 24 hour access to your plan expense and reimbursement information.

Does the money have to be in my Health Care Flexible Spending Account before I use the debit card or file a claim?

No, the entire annual amount you elect for the HCFSA is available on the first day and throughout the plan year.

Does the money have to be in my Dependent Care Benefit Account before I file a claim?

Yes, only amounts contributed to date are available for reimbursement of dependent care. This is a requirement of the Internal Revenue Service.

Tax savings example

A single employee earns $53,000, declares 2 dependents and files as head of household. The annual HCFSA contribution is $1,300 and the employee incurs $1,300 in reimbursable health care expenses.

With HCFSA

Without HCFSA

Savings with HCFSA

Annual income

$53,000

$53,000

Expenses paid through HCFSA

-1,300

0

Adjusted gross income

$51,700

$53,000

Federal income tax

-4,701

-4,896

$195

NYS income tax

-2,124

-2,213

89

Social security tax

-3,955

-4,055

100

After-tax cost of health care expenses

0

-1,300

Your spendable income (assuming there are no other payroll deductions)

$40,920

$40,536

$384

This employee could save $384 in taxes by using the Health Care Flexible Spending Account.

PEF requested Blue Shield and informedRx send all staff letters with their out-of-pocket expenses for the past year, to assist with calculating out-of-pocket expenses for 2012. The deadline to enroll is December 9, 2011. If you have questions about the Flexible Spending Account contact Deborah Stayman at x286 or dstayman@pef.org.


[1] PEF will consider a higher amount if requested. Contact Cliff Merchant for details.

Categories: Health Benefits
12Dec

Breast Pumps Now Reimbursable Medical Supplies in HCFSA

Posted by DStayman on 6th March 2011

breastfeeding_momIn good news for nursing mothers, the Internal Revenue Service (IRS) announced recently that breast pumps and lactation supplies may be deductible medical expenses. Breast pumps and supplies can also be reimbursed under flexible-spending accounts such as the PEF Health Care Flexible Spending Account (HCFSA).

The ruling is effective immediately, and expenses incurred between January 1-December 31, 2010 can be reimbursed as 2010 plan year expenses through the regular deadline of 3/15/11.

Until now, nursing mothers couldn’t use flexible-spending accounts to pay for breast pumps and other nursing supplies because the IRS said that breastfeeding didn’t have enough health benefits to qualify as medical or preventive care.

The new ruling means that families can use pretax funds from their flexible spending accounts for pumps and other supplies. Medical expenses, meanwhile, are not deductible until they exceed 7.5 percent of adjusted gross income. Breast pumps typically cost more than $200 and, along with supplies, can run as high as $1,000 in the first year of a baby’s life.

American Academy of Pediatrics president O. Marion Burton praised the IRS decision.

“The American Academy of Pediatrics hails the Internal Revenue Service ruling today that recognizes breast pumps and breastfeeding supplies as medical expenses worthy of reimbursement through flexible spending accounts,” said Dr. Burton in a statement. “Today’s IRS ruling providing favorable tax treatment for the purchase of breast pumps and breastfeeding equipment marks an important victory for the health of women and children across the country by making breastfeeding a more practical option for new and working mothers. For years, the AAP has been urging the IRS to recognize that breast milk is not just the best and most natural food for infants; it confers well-documented health benefits on both baby and mother that cannot be obtained any other way. The IRS has finally acknowledged this medical fact, and we applaud them for changing their regulations accordingly.”

Categories: Health Benefits
3Mar

FSA Enrollment

Posted by DStayman on 16th October 2010

Take Care and Enroll in the Flex Spending Account to Save $$$

money_stacked_bills

The Flex Spending Account (FSA) is a program PEF offers to help staff save money on their taxes. The FSA has two benefits, the Health Care Flexible Spending Account (HCFSA) and the Dependent Care Benefit Account (DCBA)–that help you pay for health care or dependent care with pre-tax dollars. Even if you enrolled last year you must enroll again this year.

Enrolling in either benefit is voluntary. Savings will vary depending on your annual income, the number of dependents you claim on your taxes, and the amount of money you contribute through payroll deductions to your HCFSA and/or DCBA.

How does the Health Care Flexible Spending Account work?

If eligible, you may contribute any amount up to $1,500 annually[1] in pre-tax dollars to pay for out-of-pocket medical, dental or vision costs not reimbursed by health insurance. Some examples of allowable costs are prescription drug copayments, dental charges, orthodontia, fees paid to non-participating providers, deductibles, laser eye surgery, and contact lenses.

Recent changes in federal law now limit OTC drug reimbursement. Effective January 1, 2011, OTC drugs will require a doctor’s prescription to be eligible for reimbursement under the HCFSA.  As a result, the debit card will no longer work for most over-the-counter drugs. Other OTC products (e.g. hearing aid batteries, band-aids, contact lens solution, etc.) are not affected by the new law.

The following are examples of OTC medications that will require prescriptions for reimbursement:

Acid controllers

Allergy & sinus medicines

Antibiotic products

Anti-diarrheal medicines

Anti-gas products

Anti-itch & insect bite  products

Cold sore remedies

Cough, cold & flu medicines

Diaper rash ointments/creams

Digestive aids

Feminine anti-fungal/anti-itch

Hemorrhoid treatment

Laxatives

Motion sickness medicines

Pain relief medicines

Respiratory treatments

Sleep aids & sedatives

Stomach remedies

Vitamins

Effective January 1, 2013, the IRS will limit medical Flexible Spending Account annual contributions to $2,500. If you have a big medical expense coming up such as orthodontia, then plan ahead for 2011 and 2012 to get the tax benefit.

How does the Dependent Care Benefit Account work?

If you pay a caregiver to care for your child, elderly parent, or disabled spouse in order to work, you can set aside up to $5,000 in pre-tax salary through payroll deduction to help pay for these expenses. Examples of expenses eligible for DCBA reimbursement include child care expenses (through age 12), summer day camp, before/after school programs and adult day care.

To enroll in the HCFSA for either Health Care or Dependent Care Accounts or both, you must estimate your annual out-of-pocket costs, and then decide how much money to have withheld from your paycheck. It’s important to estimate conservatively because if you don’t file claims for reimbursement of the entire amount, you will lose any remaining funds.

How do I file a claim?

Once enrolled you can fill out an electronic claim form online, mail or fax claims, then receive reimbursement by check or direct deposit. If you use the debit card, you may be asked to submit a copy of a receipt to verify that a card transaction was for a qualified expense. You can choose reimbursement by check or direct deposit into your bank account. The Take Care plan website http://www.takecareplans.com/cbp/home.asp gives you 24 hour access to your plan expense and reimbursement information.

Does the money have to be in my Health Care Flexible Spending Account before I use the debit card or file a claim?

No, the entire annual amount you elect for the HCFSA is available on the first day and throughout the plan year.

Does the money have to be in my Dependent Care Benefit Account before I file a claim?

Yes, only amounts contributed to date are available for reimbursement of dependent care. This is a requirement of the Internal Revenue Service.

Tax savings example

A single employee earns $53,000, declares 2 dependents and files as head of household. The annual HCFSA contribution is $1,300 and the employee incurs $1,300 in reimbursable health care expenses.

With HCFSA

Without HCFSA

Savings with HCFSA

Annual income

$53,000

$53,000

Expenses paid through HCFSA

-1,300

0

Adjusted gross income

$51,700

$53,000

Federal income tax

-4,701

-4,896

$195

NYS income tax

-2,124

-2,213

89

Social security tax

-3,955

-4,055

100

After-tax cost of health care expenses

0

-1,300

Your spendable income (assuming there are no other payroll deductions)

$40,920

$40,536

$384

This employee could save $384 in taxes by using the Health Care Flexible Spending Account!

PEF has requested Blue Shield and informedRX send all staff letters with their out-of-pocket expenses for the past year, to assist with calculating out-of-pocket expenses for 2011. The deadline to enroll is December 15, 2010. If you have questions about the Flexible Spending Account contact Deborah Stayman at x286 or dstayman@pef.org.


[1] PEF will consider a higher amount if requested. Contact Cliff Merchant for details.

Categories: Health Benefits
10Oct

Coverage for Dependents Extended to Age 26

Posted by DStayman on 27th July 2010

grad_hugs_dadA new benefit enhancement resulting from the recent health care reform legislation known as the Patient Protection and Affordable Care Act, requires dependent coverage to be extended to age 26. The effective date for the enhancement is based on a rather complex formula, and PEF was not required to implement the enhancement until February 1, 2011.

Through the cooperative efforts of the PEF/USW Joint Committee on Health Benefits, which reviewed available materials and discussed the importance of this benefit, we are pleased that announce that coverage for dependents up to age 26 is being implemented on August 1, 2010.

Coverage is available to any dependent child up to age 26 who is not enrolled in the PEF Healthcare Plan, regardless of marital status, unless he/she is eligible to enroll in a separate employer-sponsored health plan. To enroll a dependent child up to age 26, contact Barbara Telasky. If you have questions about the benefit contact Deborah Stayman at dstayman@pef.org.

teenlonghaired

Categories: Health Benefits
7Jul

Think Flu Season is Behind Us? Think Again

Posted by DStayman on 11th January 2010

get_vaccinated

Here it is January and you’ve been one of the lucky ones who haven’t gotten sick with seasonal flu or the nasty H1N1 flu. Perhaps you tried to get vaccinated in the fall when vaccine supplies were limited and being reserved for high-risk groups. Then the holidays came, everyone was busy, and you’re fine so why bother?

According to the Centers for Disease Control and Prevention, and the NYS Department of Health, although flu activity (caused by either 2009 H1N1 or seasonal flu viruses) may rise and fall, it is expected to continue for several more months. January through March is typically peak flu season. Vaccination is the first and most important step in protecting against the flu.  Because supplies of the 2009 H1N1 vaccines have increased dramatically, CDC is now encouraging everyone who has been patiently waiting to receive the H1N1 vaccine to get vaccinated at this time. Vaccine supplies are plentiful and there is no charge for the shot if you receive it at a public health clinic. You can also receive it from your doctor but ask first if you will be charged a copay.

For more information:

Centers for Disease Control and Prevention                        www.cdc.gov/h1n1flu/

NYS Dept of Health                                         www.health.state.ny.us/diseases/communicable/influenza/h1n1/

The NYS DOH website includes a page that identifies free H1N1 clinics in every county

www.health.state.ny.us/diseases/communicable/influenza/vaccination_clinics/

Categories: Health Benefits
1Jan