FLEXIBLE SPENDING ACCOUNTS Open Enrollment. ENROLLMENT. Open Enrollment is usually held late October and includes the first week in November with an effective date of January 1, the following year.
Tax elimination – not tax deferral
Employees designate the amount to be deducted from their pay to cover out-of-pocket medical expenses for self and dependents.
$3,500 annual maximum
Example WITHOUT a Medical Reimbursement Account: Married, claiming 2 exemptions & who incurs $2000 of annual medical expenses not covered on health insurance
Gross Bi-weekly Salary $1,342.00
Bi-weekly contribution (0)
Taxable Income $1,274.90
Total Tax Withheld $240.30
Bi-weekly Tax Savings (0)
Annual Tax Savings (0)
Employees designate amount to be deducted from pay to cover dependent care expenses
$5,000 annual maximum per family
A dependent is defined as an individual under age 13 or a spouse or other individual who is physically or mentally unable to take care of themselves and who qualifies as a dependent for income tax purposes.
Employee Estimates claiming 2 exemptions & who incurs $2000 of annual medical expenses not covered on health insurance
Expenses & Enrolls in Plan
HOW IT WORKS
Files Claim for
Funds not spent through reimbursement accounts are forfeited and used to fund plan administration.