Benefits, rules and regulations to consider for the Plan Year beginning January 1, 2015
Your Section 125 Plan has the following benefits available:
A) Health Care Spending Account and
B) Dependent Daycare Spending Account.
You may choose one or both of these features. You will be subject to the rules and regulations of the Plan as
summarized in employee handouts, and found in the official Plan document, which is available for your review.
Should you not wish this pre-tax feature for any reason, you may check the “I elect not to participate” located at the
bottom of the front and sign the form.
With all of these features, there are some rules that must be followed to keep the Plan in compliance with IRS
Your choices will be in effect for the entire Plan Year (January 1, 2015 through December 31, 2015). You may add,
drop or change this coverage annually at enrollment or when any of the following Status Changes occur:
Marriage Death of a Dependent
Divorce Birth or Adoption of a Dependent
Change in Your Employment Status Change in Your Spouse's Employment Status
Any changes you wish to make must be consistent with your change in status.
With the Health Care Account the following rules must be followed:
Health related expenses are reimbursable if they can be considered "deductible" medical expenses on your tax
return as defined under Section 213(d).
The maximum you may contribute is $Error! Reference source not found. annually.
Your claims will be paid for the amount of your "out-of-pocket" expense up to your annual election, less
previous claims paid.
If you terminate employment you may submit claims for expenses incurred prior to your termination only.
You may continue to participate in this plan after termination, but on an after-tax basis, through COBRA.
With the Dependent Daycare Spending Account, the following rules must be followed:
Dependent Daycare must be necessary for you and your spouse to be employed or attend school full time.
Dependent Daycare expenses must be for your dependent child under age 13 or other dependents such as
physically or mentally handicapped relative or household member who is unable to care for himself and over
half of whose support you pay.
You can contribute up to $5,000 per year if you are a single parent or married and filing a joint return. The
maximum is the total family contribution allowable. Your maximum may be lower under the following
o you or your spouse earns less than $5,000
o your spouse is a full-time student or incapable of self care or you are married but file a separate
federal tax return.
o Contact the Personnel Office if any of these exceptions apply.
Care cannot be provided by your spouse or anyone you claim as a tax dependent.
You cannot claim the same day care expenses reimbursed under this plan as a tax credit.
Claims will be paid for the amount of your expense up to the amount of your account balance.
You will be required to identify the person performing the child care services to the IRS by providing his/her
Federal I.D. number or Social Security number.
For the Dependent Care Reimbursement Account you will have until March 31, 2016 to file claims for expenses incurred
during the Plan Year. Any money left in your accounts after March 31, 2016 for the prior Plan Year, after you have
claimed all of your expenses for that year, will not be reimbursed to you. IRS regards the date of a claim as being when
the service is rendered, not when you actually pay the bill.
For the Health Care Reimbursement Account, if you have a balance at the end of the plan year, up to $500 will be rolled
over and added to the amount you elect for the new plan year. You will have until the end of the new plan year to use the
funds that are rolled over. To utilize your prior plan year funds you will need to file a manual claim however, any debit
card transactions after the start of your new plan year will pull from your new election plus the $500 available from the
Because amounts contributed through the various Section 125 Plan features are not subject to Social Security taxes,
a Plan participant may receive slightly less Social Security at retirement. If maximum retirement income is a
concern, an employee may direct part of the tax savings as an additional contribution to the 401(k) Plan.