Select a product below:

Dependent Care FSA
Medical FSA
Transportation Mgmt.
HRA

How do I get started?
Easy! You complete the application form provided. If you qualify for the full $5,000 yearly deduction, you may set aside $96.15 per week in pre-tax dollars for daycare. Should your daycare be higher than $96.15 per week, ask your employer about setting aside the remainder on a post tax basis. There is no fee to your employer for post-tax funds.

If I participate in the DCRP, can I still use the dependent care tax credit?
Yes you can, but not with the same dollars. For example, let's say you have two qualifying children (under age 13) and you normally incur $6,000 per year in dependent care expenses. You have elected to use the DCRP to reimburse yourself for $3,000 of those expenses. The tax credit applies to the first $6,000 of eligible expenses for two qualifying dependents. To use the tax credit, you must first subtract the DCRP disbursements ($3,000) from the maximum allowable under the tax credit ($6,000). The result in this example, $3,000, is the most on which you can claim the tax credit. Another example is if you have one qualifying child (under age 13) and you normally incur $4,000 per year in dependent care expenses. You have elected to use the DCRP to reimburse yourself for $3,000 of those expenses. The tax credit applies to the first $3,000 of the eligible expenses for one qualifying dependent. To use the tax credit, you must first subtract the DCRP disbursements ($3,000) from the maximum allowable under the tax credit ($3,000). The result ,in this example, is negative, and you have no available dollars upon which to claim the tax credit.

Can I change my elections in the Section 125 Plan at anytime during the Plan Year?
No. You cannot change your election during the Plan Year, except in the event of specified status changes. For purposes of Dependent Care Spending Accounts status changes are in relation to:

Legal Marital Status. Events that change your legal marital status, including the following: marriage, death of your spouse, divorce, legal separation, and annulment.

Number of Dependents. Events that change the number of your dependents including the following: birth, death, adoption, and placement for adoption.

Employment Status. Events that change your employment status or the employment status of your spouse or dependent including: a termination or commencement of employment, a strike or lockout, a commencement of an unpaid leave of absence and a change in work site.

Dependent Satisfies or Ceases to Satisfy Eligibility Requirements. Events that cause your dependent to satisfy or cease to satisfy eligibility requirements for coverage on account of attainment of age, student status, or any similar circumstance.

Change in Cost. You may chose to increase your contributions in the event that the provider of services increases their fees during the Plan Year, as long as the provider of services is not a relative.

Change in Coverage. Should you choose to remove your dependent from dependent care or the need for dependent care decreases, you are allowed to decrease your Dependent Care Spending Account election accordingly.

See Publication 503 for a more complete listing (download Publication 503)

How much money can I set aside on a pre-tax basis?
You can set aside a maximum of $5,000 per Plan Year for dependent care expenses if you are a single parent or married and filing jointly; $2,500 if you are married and filing separately. The legal maximum is also $5,000 per family per calendar year in the event you have access to this Plan through your spouse or another employer.

What are eligible dependent care expenses?
This Plan follows IRS guidelines which allow you to use pre-tax dollars to pay for day care services provided to your children under age 13, as well as an incapacitated parent or spouse. You are eligible if you are a single working parent, you have a working spouse, your spouse is a full-time student for at least five months during the Plan Year while you are working (refer to the earned income limits for specific contribution levels), or your spouse is disabled and unable to provide for his or her own care.

What Eligible expenses include services provided?
(a) inside or outside of your home by anyone other than your spouse, another one of your dependents, or one of your children under 19 years of age, (b) by a child care center, or (c) by a housekeeper whose services include dependent care. Day camps are eligible for reimbursement; overnight camps are not eligible.

Is it better to utilize the Flexible Spending Account or the federal income tax credit for dependent care expenses?
Your individual circumstances and income will determine whether the federal, state (where eligible) and Social Security tax savings under the Dependent Care Spending Account provide greater tax benefits than using the federal tax credit. Since individual tax situations vary, it is important for you to select which approach offers more favorable tax savings. Contributions to the Dependent Care Spending Account reduce your federal tax credit availability. As of January 1, 2003, you may combine the Dependent Care Spending Account with the tax credit availability amount to a maximum of $3,000 for one dependent and $6,000 for two or more dependents.

When and how will my provider be paid?
Providers are paid on a weekly or monthly basis depending on your preference. If you utilize the efficient Electronic funds transfer method, the money will be transferred to your providers account every Friday if you choose a weekly pay out or on the first Friday of the month if you chose the monthly method.

How will I know the balance in my Flexible Spending Plan?
Call the toll-free telephone number, to access this information.

What happens if there is money left in my account at the end of a year and I have no more reimbursable expenses?
Under IRS regulations, the money in your account will be forfeited and reverts to the general asset account of your employer. This is known as the "use it or lose it" feature of a Section 125 plan. For this reason, you need to make conservative estimates of your reimbursable expenses prior to each Plan Year. You have a grace period at the end of each Plan Year in which to file claims for expenses incurred after the date you enrolled and during the Plan Year.

Medical FSA FAQ

Can I change my elections in the Section 125 plan at anytime during the Plan Year?
No. You cannot change your elections during the Plan Year, except in the event of specified status changes. For purposes of Health Care Spending Accounts status changes are changes in relation to: Legal Marital Status: Events that change your legal marital status, including the following: marriage, death of your spouse, divorce, legal separation and annulment.
Number of Dependents: Events that change the number of your dependents including the following: birth, death, adoption and placement for adoption.
Employment Status: Events that change your employment status or the employment status of your spouse or dependent including: a termination or commencement of employment, a strike or lockout, a commencement of or return from an unpaid leave of absence and a change in work site.
Dependent Satisfies or Ceases to Satisfy Eligibility Requirements: Events that cause your dependent to satisfy or cease to satisfy eligibility requirements for coverage on account of attainment of age, student status, or any similar circumstance.
Residence: A change in your place of residence or that of your spouse or dependent.

Note: No change to the MedFSA is allowed unless the change in residence specifically affects the eligibility of the employee to participate in the MedFSA. The changing of Health Care Plans alone would not allow a change to your MedFSA.
Judgment, Decree or Order: If a judgment, decree or order from a court requires your dependent child to be covered under this plan, you may change your election to provide coverage for the child. Conversely, if the order requires another individual to provide coverage, you may change your election to revoke coverage for your child.
Entitlement to Medicare or Medicaid: If you, your spouse and/or a dependent who is enrolled in the plan's accident or health coverage becomes enrolled in Medicare or Medicaid, you may cancel or reduce coverage for the person who becomes enrolled in Medicare or Medicaid. Conversely, if you, your spouse and/or a dependent who was covered under Medicare or Medicaid loses this coverage, you are allowed to make a prospective election to commence or increase coverage for the person who loses Medicare or Medicaid coverage under the accident or health plan.

What happens to the funds I set aside?
The funds you set aside are deposited into an account for out-of-pocket health care expenses. The money targeted for your MedFSA is available for immediate reimbursement up to your annual target amount.

How much money can I set aside on a pre-tax basis?
The Employer sets the minimum and maximum amount.

What are examples of eligible health care expenses?
You can pay for a wide variety of health care expenses through your pre-tax FSA account. These expenses include, but are not limited to, deductibles, copayments, dental and orthodontia expenses, prescription sunglasses, contact lenses and coinsurance.

How often will my claims be reimbursed?
H&G Benefits reimburses claims on Monday and Thursday.


Transportation Management FAQ

How does a Transportation Plan operate?
An employee elects to have a portion of his or her pay withheld (pretax) and credited to an individual transportation account, from which he or she can later receive reimbursement, on a tax-free basis, for certain commuting expenses.

Who is eligible to participate?
Any employee of an employer who sponsors a plan that is eligible for the employer's benefit plan is also eligible for the transportation plan. The plan is not available to independent contractors, self-employed workers or those persons whose services are leased to the employer. In addition, only individuals who are currently employees at the time the qualified transportation benefit is provided are eligible to participate.

What are the maximum benefit limits?
The maximum amount allowed for the reimbursement of transportation expenses is prescribed by law and determined on a monthly basis. The calendar 2004 benefits limits are as follows:
$195.00 per month - Parking
$100.00 per month - Transit Passes and vanpooling combined.

Can an employee "double up" and receive parking and mass transit benefits?
Employees can contribute and be reimbursed up to the maximum amounts described above for both the parking account and the transit/vanpooling account.

Can an employee change their Transportation Plan election?
Yes, employees may change their elections. Unlike cafeteria plans, where the participant must experience a qualified status change to make an election change, a participant in a transportation plan can make a change just by choice.

When must a request for reimbursement be submitted?
Under the regulations, employees must submit requests for reimbursements within 180 days of incurring expenses, but not later than 90 days following the last day of the employer's designated Plan Year.

What substantiation of expenses is required?
Employers must implement "reasonable procedures" to ensure that employees have actually incurred expenses equal to the amount of reimbursement being requested by the employee. The regulations state that an employee's substantiation (signed claim form) plus a parking receipt or used transit pass will suffice. If receipts are not provided such as in metered parking situations, an employee certification alone is adequate. An employee certification in either written or electronic form is adequate. Note: It is unacceptable for the employee to certify in advance that the employee will incur the expense at some future date.

What happens to unclaimed Transportation Plan contributions when an employee separates from the company?
A qualified transportation plan cannot refund unused amounts. Generally, these moneys revert to the employer to offset administrative costs.

What happens to unclaimed Transportation Plan contributions at the end of my Plan Year?
Under the regulations, unused contributions in your account at the end of your Plan Year will roll over into the next Plan Year.

Can an employee claim reimbursement for the employee's spouse's or dependent's qualified transportation expenses?
Under the regulations, the Transportation Reimbursement Benefit can only reimburse for the employee's qualified transportation expenses, not those of the employee's spouse or other dependents.

Health Reimbursement Arrangement FAQ

Favorable Tax Treatment.
Coverage under an HRA and expenses reimbursed through the HRA are excludable from the covered individual's gross income. As with FSAs, however, the individual may not claim an income tax deduction for an expense that has been reimbursed under an HRA.

Solely an Employer-Paid Benefit. An HRA must be paid solely with employer dollars. It cannot be paid for, directly or indirectly, through employee salary reduction elections, and it cannot be provided through the employer's cafeteria plan.

Reimbursement for Medical Expenses Only. An HRA may be used only to reimburse employees for medical expenses (as defined in the tax law), provided that the employee provides proper substantiation. Reimbursable expenses include amounts paid for premiums for other accident or health coverage. Long-term insurance premiums may be paid from an HRA, but direct long-term care expenses may not. An arrangement cannot qualify as an HRA if it permits participants to receive cash or any taxable or non-taxable benefit.

Carry-Over of Unused Coverage. One of the most significant features of HRAs is that they can allow the unused portion of plan coverage to be carried over to subsequent coverage periods. For example, any amounts left over at the end of a yearly coverage period may be carried forward to the next year's coverage period. There are no limits on the amount that may be carried forward or the number of years for which an amount may be carried forward. However, at no time may the participant receive cash, directly or indirectly, for any unused amounts in the HRA.

Retirees May Be Covered. An HRA may cover both current and former employees (including retirees) and their spouses and tax dependents. The surviving spouse and dependents of a deceased employee may also be covered. Many employers have been interested in establishing defined contribution health plans as an alternative to or in conjunction with traditional retiree health care.

Coordination with Major Medical Plan. An HRA may be provided in conjunction with the employer's primary group health plan. For example, the employer may offer a high-deductible major medical plan along with coverage under the HRA. Employees may use the HRA to receive reimbursement for deductibles, co-pays, and other expenses not covered under the primary group health plan.

Salary Reduction May Not Be 'Linked' to the HRA. An HRA may be offered alongside an accident and health plan (e.g., major medical coverage) that is funded through a cafeteria plan; however, salary reduction dollars that pay for the accident and health coverage may not be 'attributable' to the HRA. The Notice provides that all the facts and circumstances are considered in determining whether the salary reduction is attributable to the HRA, but sets some limits or safe harbors for determining such linkage.

Coordination with Flexible Spending Accounts. As mentioned above, HRAs differ in many respects from FSAs. As a result, the IRS has specifically exempted HRAs from several of the requirements that would otherwise apply to FSAs. An employer may offer both an FSA and an HRA. The same expense cannot, however, be reimbursed under both the HRA and the FSA. Special ordering rules require that if an employee has coverage under both an FSA and an HRA, reimbursements must first be made from the HRA before they can be made from the FSA. Alternatively, FSAs and HRAs can be structured to provide for reimbursement of mutually exclusive types of medical expenses (such as permitting the FSA to cover only vision expenses and permitting the HRA to cover all other forms of medical expense). Further, if the HRA and FSA cover the same expenses, the HRA plan document may, prior to the Plan Year for the FSA, specifically provide that coverage under the HRA is available only after the FSA funds have been used.

COBRA. An HRA is considered a 'group health plan' for purposes of the health care continuation coverage requirements under COBRA. A participant electing COBRA coverage must be eligible to receive the maximum amount of reimbursement that was otherwise available at the time of the COBRA qualifying event. The amount available must be increased at the same time and in the amount as any increase for similarly situated non-COBRA beneficiaries. In addition, the COBRA premium may not differ for similarly situated COBRA beneficiaries, regardless of the dollar amount available to each individual.

Nondiscrimination Rules Apply. An HRA must comply with tax rules that prohibit discrimination in favor of highly compensated individuals with respect to eligibility, contributions or benefits. As a result, HRAs could not be offered to only high-paid executives.