What is a flexible spending account?
A flexible spending account, health care reimbursement accounts, and/or dependent care accounts are all terms that refer to a plan that allows employees to pay for eligible expenses on a pre-tax basis. Your employer provides this as a tax-savings benefit to its employees. Pre-tax funds can be set aside in a medical spending account or dependent care account for reimbursement of eligible expenses.
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What is a Cafeteria Plan?
Cafeteria Plan or Section 125 Plan are terms that refer to Section 213B of the IRS Code Section 125 that allows employees to have eligible, employer sponsored benefits reduced from their payroll on a pre-tax basis. The options offered vary by employer and selections are made by employees, hence the name “Cafeteria” Plan. Often times, by participating in a Cafeteria Plan, individuals are able to take advantage of tax deduction benefits they might not otherwise be able to utilize, i.e. Medical expenses on a Schedule A of a tax return.
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What are eligible reimbursement expenses?
Click here to see a list of Eligible Medical Expenses or you may refer to the IRS links below:
Medical and Dental Expenses - http://www.irs.gov/pub/irs-pdf/p502.pdf
Child and Dependent Care Expenses - http://www.irs.gov/pub/irs-pdf/p503.pdf
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How can I find out the balance of my FSA account?
The balance of your account can be verified by calling our toll-free number at 1-800-615-2797 during business hours (8am-4pm Monday-Thursday and 8am-1pm Friday) or by logging into your account online.
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What is my “Member ID”?
If you are uncertain of your Member ID, please contact our office for clarification during business hours (8am-4pm Monday-Thursday and 8am-1pm Friday). More specific questions about the Benny Website and use of the Benny Card may be found at: MyBenny FAQs
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Can I be reimbursed for vitamins or supplements if my doctor recommends it?
Vitamins are not eligible reimbursable expenses under a Medical Spending Account per IRS regulations unless you have a signed, dated letter of Medical Necessity from your doctor stating the specific reason(s) for the vitamins/supplements. The letter must be printed on your doctor’s letterhead or written on a prescription pad. A letter of Medical Necessity is kept on file for one year only, so be sure to keep an updated copy on hand in case it is requested.
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How can I be reimbursed for an out of pocket Medical or Dependent Care Expense?
PAI, Inc. accepts claims via USPS mail, fax, or electronically. You must always submit a signed claim form along with the itemized receipts that substantiate your request. Click here for a claim form.
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Can I be reimbursed for a charge (service has been provided) but I have not yet paid the bill?
You may be reimbursed for an eligible service that has incurred within the plan year dates prior to paying for the service personally.
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Can I be reimbursed for a medical procedure that is for cosmetic purposes?
No, cosmetic procedures are ineligible under the Section 125 per IRS regulation.
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What happens if there is money left in my account at the end of the plan year and I have no more eligible reimbursable expense?
Your Plan-Year most often runs for exactly 12 months. Current rules allow you to use your money up to 75 days beyond the end of your Plan-Year, giving you a Grace Period. The Grace Period allows you to incur expenses during that time frame. You may access your remaining balance by swiping your Benny Card or filing a manual claim with PAI, Inc. Keep in mind the grace period transactions will AUTOMATICALLY pull from the prior plan year’s balance before reducing your current plan year’s balance in an attempt to minimize any forfeitures. New plan year monies CANNOT be used to pay for services that were incurred during the last plan year’s dates. Once the Grace-Period has been exhausted and you still have money left in your account, you will lose any excess funds (reverting back to a Use-It-Or-Lose-It plan).
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What is the maximum amount of money I can elect for healthcare reimbursement?
The maximum amount of money ("medical cap") that can be set aside is determined by your employer. You can find this amount in your Summary Plan Description.
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What is the maximum amount of money I can elect for Dependent Care (Daycare) reimbursement?
The amount of child/dependent care expenses reimbursed cannot be more than your annual income or your spouse’s annual income, whichever is lower. There is a $5000.00 annual maximum for a single parent or married filing a joint return ($2,500 for married filing separately).
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Can I change my cafeteria plan election after the plan year starts?
The IRS Regulations regarding changes during a given plan year state that no change can be made to elections during a plan year without incurring a family status change. Some examples of a family status change are the following: a) Change in marital status, b) Loss or gain of a dependent, c) Commencement or termination of employment of spouse, d) A full-time or part-time status change of employment of employee or spouse. Please note any changes must be filed within 30 days of the event.
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How does my take-home pay increase by participating in a cafeteria plan?
Take-home pay increases while participating in a Section 125 because your taxable income is reduced by selecting benefits to be deducted on a pre-tax basis. By reducing your taxable income, you reduce the amount of taxes withheld, subsequently increasing your take-home pay.
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What happens if I leave my place of employment where I am participating in a cafeteria plan?
Upon termination, Precision Administrators, Inc. freezes your account based on funds received year to date. Remaining balances may be reimbursed by filing claims for services incurred up-to the date of termination
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