THE TAX SAVINGS IS DEPENDENT UPON THE TOTAL TAXABLE HOUSEHOLD INCOME FOR ANY GIVEN YEAR.
FOR THOSE IN A 30% TAX BRACKET, THE TAX SAVINGS WOULD BE $300 ON EVERY $1,000 SET INTO A REIMBURSEMENT ACCOUNT.
ARE THERE IRS RULES TO TAKE ADVANTAGE OF THIS PRE-TAX BENEFIT? --- YES THERE ARE RULES FOR THE EMPLOYER WHO PROVIDES BENEFITS UNDER A CAFETERIA PLAN; AND THERE ARE RULES FOR THE EMPLOYEE WHO ELECTS TO PARTICIPATE UNDER THE PLAN(S).
RULES FOR THE EMPLOYER: • Must select a Plan Year. Usually coincides with the employer’s health insurance plan year renewal. For the State, the Plan Year is January 1 st – December 31 st of each year. ___________________________ • Employer must set a medical account maximum & minimum for the Plan Year and requires that the amount elected by the participant for any Plan Year be available at the time the expense in incurred, regardless of the deposits taken.
MEDICAL MAXIMUM AMOUNT THE ANNUAL MAXIMUM AMOUNT FOR THE STATE OF MAINE’S MEDICAL REIMBURSEMENT ACCOUNT IS $3,000.00 EACH PLAN YEAR. THE MINIMUM AMOUNT IS $260.00.
FOR THE MEDICAL ACCOUNT ● COBRA applies should a participant terminate employment during a plan year and have a positive balance in his/her account. ● Additionally, the employer must allow the former employee to continue to participate at 102% of the participant’s salary reduction amount for the remainder of the Plan Year.
FOR THE DEPENDENT/ELDER CARE ACCOUNT ● IRS sets the Plan Year amount at $5,000 per calendar year - $2,500 if married, filing separate returns. ● The employer DOES NOT upfront the monies for this account. The participant must first receive the child care before funds can be reimbursed.
RULES FOR THE PARTICIPANT: ● The employee must elect to participate each Plan Year before the plan year begins during the State’s enrollment period. ● Once the decision to participate or not to participate has been made, the employee is locked into the decision for the full 12-month Plan Year UNLESS he/she experiences a qualifying status change.
WHAT KINDS OF MEDICAL EXPENSES ARE REIMBURSEABLE? PLEASE REFER TO THE “ALLOWABLE MEDICAL EXPENSES” LISTED ON PAGE 1 OF THE REIMBURSEMENT REQUEST FORM. COMMON REIMBURSEABLE EXPENSES INCLUDE SUCH THINGS AS CO-PAYS, DEDUCTIBLES, EYE EXAMS, DENTAL WORK, AND PRESCRIPTION CO-PAYS.
WHAT KINDS OF EXPENSES ARE NOT ALLOWED? ● EXPENSES FOR WELLNESS, SUCH AS GYM MEMBERSHIP OR THOSE THAT ARE COSMETIC IN NATURE, SUCH AS TEETH WHITENING ARE NOT ALLOWABLE. ALSO, VITAMINS/SUPPLEMENTS ARE GENERALLY NOT ALLOWED. ● EXPENSES MUST BE TO TREAT, CURE OR MITIGATE AN EXISTING MEDICAL CONDITION AS PER IRS REGULATIONS.
PLEASE READ THE SPECIAL COMMUNICATION “Using the medical reimbursement account for orthodontics” found at www.maine.go/beh .
HOW TO DETERMINE HOW MUCH MONEY TO PUT INTO YOUR MEDICAL REIMBURSEMENT ACCOUNT. THE BEST WAY IS TO REVIEW YOUR CHECKBOOK AND SEE WHAT YOU HAVE SPENT OVER THE PAST 12-MONTHS IN OUT-OF-POCKET MEDICAL EXPENSES. (Jan. 1 st – Dec. 31 st ) THIS WILL GIVE YOU A STARTING POINT.
MAKE A LIST OF KNOWN EXPENSES FOR YOU AND QUALIFYING DEPENDENTS FOR SUCH THINGS AS MAINTENANCE PRESCRIPTIONS. LIST OTHER MEDICAL EXPENSES YOU ARE COMFORTABLY SURE YOU WILL HAVE TO PAY OUT-OF-POCKET OVER THE UPCOMING 12-MONTH PLAN YEAR JANUARY 1 ST – DECEMBER 31 ST , 2011.
IF YOU’RE NEW TO THE BENEFIT, IT’S ALWAYS WISE TO GO A LITTLE LESS THAN ANTICIPATED TO AVOID PUTTING TOO MUCH INTO THE ACCOUNT. FOR THE DEPENDENT CARE ACCOUNT IT’S EASY. SIMPLY DETERMINE WHAT YOU CURRENTLY PAY FOR CHILD CARE FOR THE 12-MONTH PLAN YEAR PERIOD.
HOW DO YOU GET REIMBURSED AFTER ENROLLING IN THE PLAN? COMPLETE THE “REIMBURSEMENT REQUEST FORM” (ONE IS PROVIDED WITH YOUR MATERIALS). SUBMIT IT WITH YOUR RECEIPT(S) OR BILL WHICH CONTAINS: THE NAME OF THE PROVIDER, THE DATE OF SERVICE , THE DOLLAR AMOUNT OWED/PAID AND A DESCRIPTION OF THE SERVICE.
!!! IMPORTANT !!! YOU CANNOT SUBMIT A CANCELLED CHECK OR CREDIT CARD RECEIPT AS A RECEIPT . IT IS AGAINST IRS REGULATIONS. ************************************* YOU MAY FAX OR MAIL YOUR FORM AND RECEIPTS TO THE ADDRESS ON THE FORM. CHECKS ARE MAILED THURSDAY OF EACH WEEK TO YOUR HOME ADDRESS.
IT IS IMPORTANT THAT YOU REVIEW ALL THE COMMUNICATION MATERIALS BEFORE ENROLLING – ESPECIALLY THE MAJOR CHANGE TO OVER-THE-COUNTER DRUGS AND MEDICATIONS !!! SHOULD YOU HAVE ANY QUESTIONS, CONTACT YOUR BENEFITS REPRESENTATIVE AT THE OFFICE OF EMPLOYEE HEALTH & BENEFITS OR, IF YOU PREFER, CONTACT H R SUPPORT DIRECTLY AT 1-866-655-5397.