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Flexible Spending Accounts to Flexible Spending Accounts to Include Dependent CareInclude Dependent Care

San Mateo CountySan Mateo CountyPaul HacklemanPaul Hackleman

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What is a Dependent Care FSA?What is a Dependent Care FSA?

An IRS Regulated Employer Sponsored An IRS Regulated Employer Sponsored Benefit that allows Employee and Spouse Benefit that allows Employee and Spouse to Workto Work

Allows Participants to Recover Out-of-Allows Participants to Recover Out-of-Pocket Payments for eligible Day Care Pocket Payments for eligible Day Care ExpensesExpenses

Accounts Are Funded from the Accounts Are Funded from the Participant’s Pre-Tax Payroll DeductionsParticipant’s Pre-Tax Payroll Deductions

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How Does a Dependent Care FSA How Does a Dependent Care FSA Work?Work?

Participant Determines Payroll DeductionParticipant Determines Payroll Deduction

Employer Takes Deductions to Fund Employer Takes Deductions to Fund Selected FSA AccountsSelected FSA Accounts

Participant Submits Eligible Claims and Participant Submits Eligible Claims and Documentation to Mangrove for Documentation to Mangrove for ReimbursementReimbursement

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How Do Dependent Care FSAs How Do Dependent Care FSAs Work?Work? Mangrove Reviews / Processes ClaimsMangrove Reviews / Processes Claims Mails / Directly Deposits Bi-Weekly CheckMails / Directly Deposits Bi-Weekly Check Use of Debit Card Use of Debit Card

– County pays for first two cardsCounty pays for first two cards– Additional cards are $5 eachAdditional cards are $5 each

Customer Service Representative available Customer Service Representative available 8AM-7PM EST8AM-7PM EST

24 hour online access to FSA account – up to 24 hour online access to FSA account – up to the minute informationthe minute information

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How Will a Dependent Care FSA How Will a Dependent Care FSA Benefit You?Benefit You?

Pre-Tax Payroll Deductions Reduce Pre-Tax Payroll Deductions Reduce Your Taxable IncomeYour Taxable Income

Increases Your Spendable Income Increases Your Spendable Income Since Services Are Paid For from Pre-Since Services Are Paid For from Pre-Tax DollarsTax Dollars

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A True Pre-Tax DeductionA True Pre-Tax Deduction

Contributions are tax free including:Contributions are tax free including:– FederalFederal– FICAFICA– StateState

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No FSA FSAGross Monthly Income $5,000 $5,000Pre-Tax Med. Expenses 0 100 Taxable Income $5,000 $4,900Federal Tax (28%) 1,400 1,372State Tax (7.3%) 365 358FICA Tax (7.65%) 383 375After-Tax Healthcare Expenses 100 0

Monthly Spendable Income $2,752 $2,795

FSA SAVINGS TOTAL $43 mo./$516 yr.

Example - $60,000 IncomeExample - $60,000 Income

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Who is Eligible?Who is Eligible?

Regular Employees 20+ Hours per WeekRegular Employees 20+ Hours per Week

Participation Begins:Participation Begins:– Current Employees – January 1 (enroll Current Employees – January 1 (enroll

during open enrollment) during open enrollment) – New Employees – First of a Month New Employees – First of a Month

Following 28 Days of EmploymentFollowing 28 Days of Employment

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Reimbursement AccountReimbursement Account

Reimburses Out-of-Pocket Day Care Reimburses Out-of-Pocket Day Care Expenses for an Eligible DependentExpenses for an Eligible Dependent

Eligible Dependents must be claimed Eligible Dependents must be claimed as an exemption on your tax returnas an exemption on your tax return

Incurred by Employee to Allow the Incurred by Employee to Allow the Employee to WorkEmployee to Work

Benefit Is Reimbursed Up To Your Benefit Is Reimbursed Up To Your Year-to-Date Payroll DeductionsYear-to-Date Payroll Deductions

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How Much Can I Contribute?How Much Can I Contribute?

Dependent Care AccountDependent Care Account

– Minimum $25 per yearMinimum $25 per year– Maximum $5,000 annuallyMaximum $5,000 annually– $2500 if Married Filing Separately$2500 if Married Filing Separately

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What are Dependent Care Eligible What are Dependent Care Eligible Expenses?Expenses?

Au Pair ServicesAu Pair Services NanniesNannies Nursery SchoolNursery School Private Pre SchoolPrivate Pre School Before and After CareBefore and After Care Summer Day CampSummer Day Camp

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Eligible Dependent Care ExpensesEligible Dependent Care Expenses

Fees forFees for– Sick Child CenterSick Child Center– Day CampsDay Camps– Licensed Day Care CentersLicensed Day Care Centers– Baby sittersBaby sitters– Daycare for an Elderly DependentDaycare for an Elderly Dependent– Day care for a Disabled DependentDay care for a Disabled Dependent

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Ineligible ExpensesIneligible Expenses

Dependent Care FSA is Strictly for the Dependent Care FSA is Strictly for the “Well Being of the Child”“Well Being of the Child”– Overnight CampsOvernight Camps– Registration FeesRegistration Fees– Babysitting for “Social Events”Babysitting for “Social Events”– Tuition ExpensesTuition Expenses– Leave of Absence of VacationLeave of Absence of Vacation

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Ineligible ExpensesIneligible Expenses

Any Day Care Expense with a Future Date of Any Day Care Expense with a Future Date of ServiceService

FoodFood Expenses if Separate from the Day Care Expenses if Separate from the Day Care ExpensesExpenses

Expenses for Transportation, Books, Expenses for Transportation, Books, Clothing, or EntertainmentClothing, or Entertainment

Expenses incurred prior to the start date of Expenses incurred prior to the start date of the FSA plan – or incurred after your the FSA plan – or incurred after your termination from the FSA plan.termination from the FSA plan.

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Termination of EmploymentTermination of Employment

Once an employee terminates employment:Once an employee terminates employment:– No more incurred expenses are eligibleNo more incurred expenses are eligible– Need to submit receipts within 60 daysNeed to submit receipts within 60 days

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Benny Makes Them EASY to Use!

Introducing The BennyIntroducing The Benny Debit Debit VisaVisa Card Card

for All Your Qualified FSA for All Your Qualified FSA ExpensesExpenses

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Benny Debit CardBenny Debit Card

VISA Benny Card Can be Used if the Day VISA Benny Card Can be Used if the Day Care Provider accepts VISACare Provider accepts VISA

VISA Benny Card is used as a “Credit” VISA Benny Card is used as a “Credit” CardCard

VISA Benny Card Accrues a Balance as VISA Benny Card Accrues a Balance as

Your Payroll Deductions OccurYour Payroll Deductions Occur

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How Does It Work?How Does It Work?

At the time of payment for Day Care…At the time of payment for Day Care…

The Card gets SWIPED...

And, payment is automatically deducted

from your FSA account, provided you have a balanceThen, save your receipts in an envelope.

It’s that EASY!

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Benny Debit CardBenny Debit Card

For Current ParticipantsFor Current Participants– Your Benny Card will not expire for 5 Your Benny Card will not expire for 5

yearsyears– Funds will be loaded on your Benny Card Funds will be loaded on your Benny Card

as the payroll deduction occursas the payroll deduction occurs– Same Benny Card can be used for both Same Benny Card can be used for both

Healthcare FSA and Dependent Care FSA Healthcare FSA and Dependent Care FSA

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Benny Debit CardBenny Debit Card

You Need to ACTIVATE and SIGN the Cards

To activate call the number on the sticker on the Card

or log onto www.benefitone.com

Customer Service Representatives are Available 8AM – 7PM EST

Each eligible user signs his or her name.

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Plan Rules for Dependent Care FSAPlan Rules for Dependent Care FSA

Expenses Must Be Incurred (Services Expenses Must Be Incurred (Services Rendered) While An Active ParticipantRendered) While An Active Participant

Funds Accrue only as Payroll Funds Accrue only as Payroll Deductions OccurDeductions Occur

Run Out Period (90 days)Run Out Period (90 days) Reduction in Taxable Income May Reduction in Taxable Income May

Result in Reduced Social Security Result in Reduced Social Security BenefitsBenefits

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Plan RulesPlan Rules Cannot Change Deduction Unless You Cannot Change Deduction Unless You

Experience a Experience a Family Status ChangeFamily Status Change: : (must be (must be reported within 30 days of the event)reported within 30 days of the event)– Marriage or DivorceMarriage or Divorce– Birth or AdoptionBirth or Adoption– Death of Spouse/DependentDeath of Spouse/Dependent– Change in Employment Status of Spouse or Change in Employment Status of Spouse or

SelfSelf– Increase or Decrease in Day Care Provider Increase or Decrease in Day Care Provider

FeesFees– FMLA or Non-FMLA LeaveFMLA or Non-FMLA Leave

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How Do I Enroll?How Do I Enroll?

Complete the Estimated Expenses Complete the Estimated Expenses WorksheetWorksheet

Return a Completed Election Form to Return a Completed Election Form to Human Resources - Pony HRD-133*Human Resources - Pony HRD-133*

*Current Participants – Re-enrollment *Current Participants – Re-enrollment ProcessProcess

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The Better You Plan The Better You Plan

The More You Will Save!The More You Will Save!