Cafeteria Benefits

The Cafeteria Plan

Flexible Spending Guide

(Click to View Brochure)

A Multiple Part Program That Allows Eligible Employees Reductions in Taxes.

You can pay for medical expenses with "pre-tax" dollars.

The Cafeteria Plan, established under Internal Revenue Code Section 125, is an innovative way to save tax dollars while receiving additional benefits.

By participating in the School Board's Cafeteria/Flex Plan, you can:

· pay for certain medical expenses and/or adult and child dependent care with pre-tax dollars

· choose enhanced/additional benefits from a "menu" of optional benefits

· save tax dollars

The plan is comprised of four main sections:

Section 1 Board Contributions to The Cafeteria Plan

Section 2 Pre-Tax Salary Reduction for Employee Paid
Premiums (unless you request a waiver)

Section 3 Flexible Spending Accounts

Section 4 Additional Plan Benefits

All permanent employees are eligible...

ALL PERMANENT EMPLOYEES are eligible to receive benefits through the Cafeteria Flex Program, pursuant to applicable collective bargaining agreements.

Board-paid contributions for eligible employees.

School Board Contribution

Under the terms of the collective bargaining agreements, the School Board provides a monthly contribution toward your Cafeteria Plan/Flexible Spending Accounts. Check your specific bargaining unit agreement to verify the specific benefit contribution.

If you do not choose to participate in the Cafeteria/Flex Plan, the Board's contribution will be applied automatically to your salary. However, the Board’s monthly contribution will be reduced by the appropriate income and Social Security taxes.

Insurance premiums are paid automatically through pre-tax salary reductions.

PRE-TAX SALARY REDUCTION FOR EMPLOYEE PAID PREMIUMS

If you or your dependents are enrolled in medical, dental or vision insurance plans, your premium contribution for coverage will generally be automatically paid through salary reduction.

FLEXIBLE SPENDING ACCOUNTS

"Flexible Spending" Helps You Save on Taxes.

Flexible Spending Accounts (FSAs) let you pay certain medical and dependent care expenses with pre-tax money. These accounts can help you save on your taxes, since the money you contribute to your FSAs is deducted before Federal and Social Security taxes are withheld. In addition, the money withdrawn for reimbursement is tax free.

FSAs are optional: You may participate in one or both.

There are two separate FSAs: the Medical Reimbursement Spending Account and the Dependent Care Spending Account. The FSAs are optional; you may participate in one or both. Before making a decision, please review the following information.

HOW FLEXIBLE SPENDING ACCOUNTS WORK

You decide the amount(s) you want to contribute.

You must first decide the annual amount you want to put into your account(s) over the course of the upcoming year. This pre-tax deduction will be deposited into your FSA account(s). When you incur eligible expenses, you submit a claim for reimbursement. Your reimbursements will be made in tax-free dollars.

MEDICAL REIMBURSEMENT SPENDING ACCOUNT

The Medical Reimbursement Spending Account reimburses you for co-payments, deductibles and expenses not covered by insurance.

The Medical Reimbursement Spending Account reimburses you for many medical expenses that are not covered by insurance. These expenses include deductibles, co-insurance, and co-payments, services, and supplies that may not be covered by your health plan including:

· routine physical exams

· vaccinations

· medically necessary supplies

· eyeglasses and contact lenses

· chiropractic care and acupuncture treatments

· birth control pills

· hearing aids; communications equipment for the hearing impaired

· care for the handicapped, including special education elective surgery (except cosmetic surgery that is not reconstructive)

· dental exposures that are not covered by the dental insurance company (cosmetic procedures/products are not included)

· certain categories of Over-The-Counter (OTC) items, i.e. medicines, drugs and medical supplies

For a complete list of eligible expenses:

You made obtain a copy of IRS publication 502, "Medical and Dental Expenses” by dialing 1-800-829-3676, and following the recorded instructions.

Effective January 1, 2013

Medical Reimbursement - avoid taxes on up to $2,500 of income annually.

Effective January 1, 2013 you may deposit a minimum of $100 up to $2,500 into your Medical Reimbursement FSA. In estimating how much you should contribute, consider the typical out-of-pocket medical expenses that you and your family incur during the year. You might review your expenses from last year as a guide to what you can expect in the upcoming year. Again, calculate the expenditures so that your monthly deduction will match your estimated expenditures.

IMPORTANT: Plan carefully. Any money left in your FSA account, that is not claimed by the end of the year grace period, will not be returned to you or carried over into subsequent plan year accounts. Remember, any money left in your FSA accounts will be lost in accordance with Internal Revenue Code, Section 125 for Cafeteria Plans.

DEPENDENT CARE SPENDING ACCOUNT

The Dependent Care Spending Account covers most expenses related to the care of eligible dependents.

The Dependent Care Spending Account covers most of the expenses related to the care of an eligible dependent so that you can work full time. If you are married, both you and your spouse must be gainfully employed (or your spouse must be disabled or a full-time student) to qualify for this account.

The FSA will reimburse you for the cost of care provided by someone other than your spouse or a dependent under age 19 for eligible dependents who need:

· pre-school care

· before and after school care for children under age 13

· care for a child of any age who is physically or mentally disabled

· care for elderly parents

An "eligible dependent" is anyone who qualifies as your dependent for income tax purposes and spends at least eight hours a day in your home. Eligible expenses are the same as those that qualify for a federal tax credit.

NOTE: Expenses incurred from overnight camps are not reimbursable under FSAs.

You can deposit a minimum of $100 up to $5,000 into your Dependent Care FSA. However, certain exceptions apply:

· If you are married, filing a joint income tax return, and your spouse contributes to a dependent care FSA, your combined contributions for the year cannot exceed $5,000.

· If you are married, filing a separate income tax return, you may only deposit up to $2,500 for the year.

Dependent Care FSAs provide immediate tax savings.

Internal Revenue Service regulations state that you can use either the Dependent Care FSA or the Dependent Care Income Tax Credit, but not both. In order to determine whether it is better for you to use the FSA instead of the tax credit, you need to review your personal situation, (household income, marital status, and the amount of your eligible expenses). Before you make a decision about enrolling in the Dependent Care FSA, it might be a good idea to consult a tax advisor.

Claiming your tax-advantaged dollars is easy.

FLEXIBLE SPENDING REIMBURSEMENTS

When you have incurred eligible medical or dependent care expenses, you may submit a claim for reimbursement to the Plan Administrator. Claim forms are available from your Benefits Coordinator, the Benefits Department, the Plan Administrator, and on line ( click here!). You can submit a claim each time you accumulate at least $20 in eligible medical and/or dependent care expenses.

The expense must be incurred (the services rendered) during the current plan year. You must provide receipts, bills, etc. that indicate the service(s) rendered, the date you incurred (not paid) the expense, and the name of the service provider. If you are claiming reimbursement for any medical expenses that you or your spouse's insurance did not cover, attach the "Explanation of Benefits" you received from the provider. The Explanation of Benefits indicates that all or a portion of the cost was not paid by insurance. For dependent care reimbursement claims, you must provide the Name, Address, and Social Security Number or Tax Identification Number of the person or organization providing the care.

The IRS has added a grace period to your Medical Expense Flexible Spending Account. Your grace period ends on March 15th of the following year. You may receive reimbursement for unused benefits incurred during this period. The grace period will not extend beyond March 15th of the following year.

...reimbursements are made within three days...

Reimbursements from the Medical and Dependent Care FSAs are generally made within three business days from the date the claim is received by the Plan Administrator. You will receive statements periodically showing the reductions paid in and any amounts reimbursed to you. If you have questions about your account balance or claims, contact the Plan Administrator.

FSAs and Your Other Benefits

Usage of the FSAs in no way affects your other benefit plans. The FSAs and the payments you receive are in addition to any plan benefits to which you are entitled.

FSA Claims Submission

YOU MUST SUBMIT YOUR CLAIMS NO LATER THAN APRIL 15th, AFTER THE END OF THE PLAN YEAR, IN WHICH THE EXPENSES ARE INCURRED. Therefore, claims submitted must be postmarked no later than April 15th, of the following year to be eligible for reimbursement. If your employment ends before the end of the plan year, you may still be able to submit claims through the end of the grace period as follows:

· For Dependent Care expenses, you can submit claims based on your account balance on the last day of your employment. The expenses must have been incurred while you were employed by the School Board and a plan participant.

IMPORTANT: Plan carefully. Any money left in your FSA account that is not claimed by the end of the year grace period, will not be returned to you or carried over into subsequent plan year accounts. Remember, any money left in your FSA accounts will be lost in accordance with Internal Revenue Code, Section 125 for Cafeteria Plans.

Plan elections are effective for the entire plan year and cannot be changed except as permitted below.

Changing Your Elections

Cafeteria Plan elections made during the annual Open Enrollment period become effective January 1 of the upcoming year, and remain in effect for the entire calendar year. The School Board intends to provide you with the broadest ability to make mid-year election changes permitted in accordance with Internal Revenue Service (IRS) rules. To summarize those IRS rules, you cannot change your level of participation unless you experience one of the following events and notify the Benefits Department within 31 days of such event.

Change in Status. You may modify your Cafeteria Plan election for the remainder of the plan year if one of the following events affects the eligibility for coverage under the Plan for you, your spouse and/or dependent as long as your requested Cafeteria Plan change is "consistent with" the Change in Status:

Marital Status: A change in your marital status, including marriage, death of a spouse, divorce or annulment.

Change in Number of Tax Dependents: A change in the number of your dependents, including birth, death, adoption or placement for adoption.

Change in Status of Employment Affecting Coverage Eligibility: A change in your employment status (or the employment status of your spouse or dependent) that affects the individual's eligibility under an employer's plan, such as commencement or termination of employment.

Gain or Loss of Dependent's Eligibility Status: A gain or loss of eligibility status is an event that causes your dependent to satisfy or cease to satisfy coverage requirements under the plan, such as change in age, marital, employment or tax dependent status.

Change in Resident: A change in your residence, and/or the residence of your spouse or dependent, such as moving outside the HMO service area.

As an example of the "consistency" requirement, let's assume you are married and elect "Employee Plus One" coverage beginning January 1, 2012. However, you and your spouse divorce on May 15, 2012. You may change your election under the Cafeteria Plan from "Employee Plus One" coverage to "Employee Only" coverage if you notify the Benefits Department by June 15, 2012. Your election to drop your former spouse from the plan and choose "Employee Only" coverage is "consistent" with your divorce.

Medicare, Medicaid or Other Governmental Sponsored Health Coverage Entitlement: Gain or loss of Medicare or Medicaid by you, your spouse and/or dependent may allow you to drop or enroll the appropriate individuals in the Plan.

Judgment, Decree or Court Order: If a judgment, decree or order from a divorce, annulment or change in legal custody requires that you provide accident or health coverage for your dependent child, you may change your election to provide coverage for the dependent child. If the order requires that another individual (such as your spouse or former spouse) cover the dependent child and provide coverage under that individual's plan, you may change your election to revoke coverage only for that dependent child and only if the other individual provides the coverage.

Open Enrollment Under Other Employer's Plan: You may make an election change when your spouse or dependent makes an Open Enrollment Change in coverage under their employer's plan if they participate in their employer's plan and (1) the other employer's plan has a different period of coverage than the School Board's Plan and (2) the other employer's plan permits mid-year election changes for this same event.

Enrollment Rights with a 60 Day Notice Requirement: You may make an election change if you, your spouse and/or dependents lose eligibility under Medicaid or a state children's health insurance program (SCHIP), or become eligible for premium assistance under Medicaid or a SCHIP program. You must notify the Benefits Department within 60 days of such event.

Remember: You must give prompt notification in writing to the Benefits Department to make any of the above-described changes.

Post-Retirement Life Insurance

(Available only to those who previously enrolled)

Post-Retirement Group Term Life Insurance is available to all full-time permanent employees.

The plan is designed to provide you with a paid-up life insurance certificate at the time of your retirement. Full information about your benefits and coverage is available through a separate product brochure, as provided by the Plan Administrator.

Post-Retirement Life Insurance Highlights

Highlights:

· you select your retirement age

· you decide the amount of coverage you need, up to $50,000

· no physical exam required for coverage

· you automatically qualify regardless of your health, as long as you select a target retirement date at least five years from your current age

· you pay your premiums with pre-tax earnings

· you will own paid-up life insurance at the time of your retirement

EXAMPLE(S)
Post-Retirement Life Insurance
(Example: assumes retirement at age 65, monthly net premiums and interest rate of 6%)

Issue Age

Insurance Amount

$10,000

Monthly Premium

Insurance Amount

$25,000

Monthly Premium

Insurance Amount

$50,000

Monthly Premium

Issue Age: 25

Issue Age: 30

Issue Age: 40

Issue Age: 50

$5.74

$6.69

$9.94

$19.04

$8.62
$10.98

$19.19

$41.87

$14.53
$19.26

$35.69

$81.05

SUPPLEMENTAL HOSPITAL CONFINEMENT INCOME INSURANCE

...provides income when you are hospitalized...

Supplemental Hospital Confinement Insurance provides a supplement to your income while you are hospitalized. Employees who are eligible receive a fixed daily benefit during periods of hospitalization resulting from a covered illness or accident. Benefits will begin the first day of hospital confinement. This supplemental income is in addition to other benefits being received.

Supplemental Hospital Confinement Income Insurance Highlights:

· it is portable

· benefits are paid directly to insured, unless assigned

· it is guaranteed renewable to age 65, subject to changes in premium by class

· premiums will be made using pre-tax dollars under Internal Revenue Code, Section 125 for Cafeteria Plans

· it pays in addition to Worker’s Compensation

· spouse and/or child coverage available

there is a waiver of premium benefit (primary insured only)…

Waiver of Premium

After the insured has been hospitalized for 30 consecutive days, premiums are waived that become due on this policy, including all attached riders. Premium payments must resume when the hospital confinement ends.

Renewable

Eligibility age limits are from 18 to 64. Guaranteed renewable to age 65 subject to change in premiums by class.

Full information about your benefits and coverage is available through a separate product brochure as provided by the Plan Administrator.

This brochure highlights some features of the policy and riders, but is not the insurance contract. The policy and riders are not a Medicare Supplement Policy.

CANCER/SPECIFIED DISEASE INSURANCE

Cancer/Specified Disease Protection is a supplemental insurance plan that pays in addition to other coverage if you are diagnosed with cancer or other specified diseases. The plan is designed to pay directly to you, unless assigned.

The plan helps you focus on care, addressing both direct and indirect medical expenses to help keep you financially secure.

Cancer/Specified Disease Insurance Highlights:

· Choice of daily hospital confinement benefit depending on the premium you pay

· Pays directly to you, unless assigned

· Pays in addition to any other insurance you may have including employer provided insurance

· Premium will be made using pre-tax dollars under Internal Revenue Code, Section 125 for Cafeteria Plans

· Portable when you leave employment

· Spouse and/or child coverage is available

Full information about your benefits and coverage is available through separate product brochures as provided by the insurance carriers.

Glenn C. Parks
Accountant V

"Oversees All Billing and Bookkeeping Functions and Flexible Spending Accounts (FSAs)"

Office: 754-321-3100
Fax: 754-321-3280
glenn.parks@browardschools.com