What you need to know about medical reimbursement accounts.
H R Support & Consulting Services administers a plan provided by your employer to help you save money on medical expenses not covered by insurance or other sources. This benefit plan, called a Medical Expense Reimbursement Account, allows you to have money deducted pre-tax from your paycheck to pay for medical expenses not covered by insurance or other sources. This means you will save federal, state, and FICA (Social Security) taxes on contributions to your Medical Expense Reimbursement Account. For example, an employee earning $24,000 a year and spending $1,000 annually on unreimbursed medical expenses could save over $300 a year in taxes with a Medical Expense Reimbursement Account.
You can use a Medical Expense Reimbursement Account to pay for your family's health care expenses incurred during the Plan Year that are not reimbursed by your medical or dental insurance plan or from any other source. The expenses you can pay for with this account include medical and dental plan deductibles and coinsurance payments, physical exams, well-child visits, eye examinations, glasses, contact lenses and solutions, and any other allowable medical expense that is not paid for by insurance or for which you are not reimbursed for from any other source.
Your Account cannot be used to cover cosmetic surgeries, teeth whitening, or wellness programs. Please refer to the "Allowable Medical Expense" sheet which provides a more complete list of services. Proof that an eligible expense has been incurred, such as a bill, receipt or insurance explanation of benefits showing date, type of service, provider and amount is required. Canceled checks are not acceptable.
What you need to know about dependent/elder care reimbursement accounts.
H R Support & Consulting Services offers a benefit to help you save money on your dependent/elder care expenses. This benefit, called a Dependent/Elder Care Reimbursement Account, allows you to have money deducted pre-tax from your paycheck to pay for eligible dependent/elder care expenses. This means you will save federal, state, and FICA (Social Security) taxes on contributions to your Reimbursement Account. For example, an employee earning $24,000 a year and spending $3,500 annually on dependent/elder care, could save $1100 a year in taxes with a Dependent/Elder Care Reimbursement Account.
Is a Dependent/Elder Care Reimbursement Account right for you?
There are two ways to save tax dollars on the money you use for dependent/elder care bills. One way is to claim a credit on your income tax return. The other is to pay for dependent/elder care expenses with pre-tax dollars from a Dependent/Elder Care Account.
Because each case is different, we cannot tell you which way will be most beneficial to you. It is no longer advantageous to use a combination of the dependent care tax credit and Dependent/Elder Care Reimbursement Account to save tax dollars on dependent/elder care expenses. Legislation effective January 1, 1989, states that each dollar you put into a Dependent/Elder Care Account will reduce by one dollar the maximum amount you may use to figure your tax credit.
For example, if you have one child and fund a Dependent/Elder Care Reimbursement Account with $1,000, the maximum amount you may use to determine your tax credit is reduced from $2,400 to $1,400.
To take advantage of the tax savings allowed under a Dependent/Elder Care Reimbursement Account, you must provide the name and tax identification or social security number of your dependent/elder care provider when submitting your request for reimbursement.
How you can benefit from using a Dependent/Elder Care Reimbursement Account
H R Support & Consulting Services reimburses you for eligible dependent/elder care expenses under the following conditions:
- Expenses must be incurred to enable you (and, if you are married, your spouse) to work full or part time or attend school full-time.
- Dependents who qualify include your children under age 13 and any other dependent (such as a disabled child 13 or older, spouse, parent) who is physically or mentally incapable of self-support and whom you claim as a dependent on your federal tax return.
- Reimbursable expenses include day care expenses, before and after school (through age 12) and most day camps (overnight camp expenses are ineligible).
You may contribute up to $5,000 to a dependent/elder care account ($2,500 if you are married and file separate returns). If the annual earned income of either you or your spouse is less than $5,000, the maximum you may contribute will be that lesser amount.
Important account information
Please read the following important information before you sign up for a Reimbursement Account(s).
Reimbursement accounts offer you attractive tax savings on allowed expenses. But remember, you cannot claim expenses reimbursed through these accounts as income tax credits or deductions.
Once you elect to put a certain amount into your Reimbursement Account(s), you cannot change that contribution until you make your election for the next Plan Year, unless you experience a family status change. The status changes that most plans allow are:
- Marriage, divorce, death of a spouse, legal separation or annulment;
- Birth, adoption or placement for adoption of a child, or death of a child;
- Change in employment status of the employee, spouse or dependent that affects benefit eligibility;
- A change in residence of the employee, spouse or dependent that affects eligibility coverage;
- Dependent satisfies or ceases to satisfy dependent eligibility requirements.
Reimbursement Account Withdrawals
You may withdraw money from your Reimbursement Account(s) for eligible expenses you have already incurred. Simply fill out a Reimbursement Request Form and attach a copy of your bill, paid receipt, or insurance explanation of benefits showing date, type of service, provider, and amount. Cancelled checks are not acceptable.
H R Support & Consulting Services makes payments weekly, or as often as your employer funds the account for dependent/elder care. Participants whose eligible reimbursement requests are received by noon Friday will be mailed checks by the end of the day the following Thursday. You will receive payment for eligible dependent/elder care expenses up to your current account balance. Unpaid balances will be held and paid during the following weeks until the full amount has been paid to you (up to the amount of your contributions). Reimbursement for medical expenses will be made up to the amount of your annual election. At the end of the Plan Year you will have 90 days to submit claim requests for services incurred during the ended Plan Year.