Your Simpson Tax Saver 125 Plan Allows You To:
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Pay for Simpson College sponsored health insurance premiums with pre-tax dollars.
- Pay for many of your current expenses with pre-tax dollars through:
- Medical reimbursement account for medical, dental and vision expenses not covered by insurance.
- Dependent care reimbursement account for work related dependent care expenses for children, disabled spouse or dependent parent.
Frequently Asked Questions Regarding Flexible Spending Accounts
What is a Flexible Spending Account?
A flexible spending account is an innovative way for you to reduce your taxes and increase your take home pay. The Medical and Dependent Care Reimbursement Accounts allow you the flexibility to pay for medical and dependent care expenses with pre-tax dollars. Your participation in either of these accounts increases the amount of your take home pay.
How does a Flexible Spending Account work?
At the beginning of each plan year, you estimate your out-of-pocket expenses for medical and/or dependent care and elect an annual amount to cover those expenses. It is important to estimate expenses carefully, since any money left in the account will be lost. The elected amount is then divided by the number of pay periods for the year and is deducted pre-tax from your paycheck each pay period. When you have incurred an out-of-pocket expense, simply submit a claim form and attach the supporting documentation, and you will be reimbursed with your tax-free dollars. You never pay taxes on the money you put into your Flexible Spending Account. There are two types of flexible Spending Accounts you can contribute to:
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Medical Reimbursement Account: At this time, the income tax laws do not permit you to deduct medical expenses totaling less than 7.5% of your adjusted gross income, the Medical Reimbursement Account offers an alternative way to save on taxes.
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Dependent Care Reimbursement Account: This account may benefit you if you pay for dependent care, after school care or day camp for a child under the age of 13; or for the care of a disabled child or adult who is your dependent.
What is an allowed expense?
The Medical Reimbursement Account can be used for you or your eligible dependents for qualified medical expenses which are deductible for income tax purposes under Section 213 of the Internal Revenue Code. However, all expenses must be incurred during the plan year and must be "medically necessary."
The Dependent Care Reimbursement Account requires work-related expenses to be incurred during a period in which both you and your spouse are gainfully employed, seeking employment or are a full-time student. These expenses must also be incurred during the plan year.
Is there any difference in the way the two accounts pay?
Yes. The Dependent Care Account pays you based on the balance in the account at the time of processing. This balance is determined by your payroll withholding. The Medical Reimbursement Account pays you up to the annual amount elected, less any previously paid amounts, regardless of payroll withholding to date.
Can I change my election during the plan year?
Yes. Your level of contribution can be changed during open enrollment for the upcoming plan year or upon a change in status as defined pursuant to Income Tax Regulation 1.125-2(Q/A-6(c)). (See below)
A change in status includes but is not limited to the following:
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Marriage
- Legal separation or divorce
- Death of a spouse or dependent
- Birth or adoption of a child, or addition of another dependent
- Termination or commencement of your spouse's employment
- Loss of a dependent's eligibility under either the participant or spouse's plan
- Change from part-time to full-time or vice versa for you or your spouse
- Taking an unpaid leave of absence by you or your spouse
How do I get reimbursed?
Once expenses are incurred, simply complete a claim form, attach a statement from the provider of service or an insurance statement, and submit it to:
Alliance Benefit Group
Attn: Flex Department
PO Box 1226
Albert Lea, MN 56007
Or fax your claims to: 866-254-6490
If you choose to fax your claim, it is not necessary to mail the original copy. You may verify that your fax was received by calling our Customer Service Line at
1-877-661-4727.
When submitting claims to Alliance Benefit Group, there are a few important things to keep in mind. Following these basic claims submission guidelines will help prevent denials, and in turn, get your reimbursements to you in the quickest possible manner:
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Always include documentation to support items you are claiming. This documentation must indicate what service/item you are claiming, name of the provider, date of service, and the amount you are required to pay.
- For dependent Care only, the provider's signature in box (8) of the claim form will suffice as support for that claim. If the signature is provided, no additional receipts are required.
- Retain copies of all documentation submitted, as well as the yellow copy of your claim form.
- Claim form must be completely filled out, signed by the participant and dated. Claim forms with participant's signature absent are subject to denial.
When will I receive my reimbursement?
Reimbursement checks are prepared on the 6th and the 21st of each month. Requests received prior to 8:00 a.m. the day of processing will be eligible for payment. Requests received after 8:00 a.m. will be held until the next processing date. Reimbursement checks are typically received on campus and distributed through campus mail within just a few days.
How do I check the balance in my account?
Each time you receive a reimbursement check, your account information will be printed on the check stub. You may also view your account on-line at http://www.myabg.com/. Simpson College will also receive regular reports, which will give you the ability to verify account information with the Human Resources Department.
What happens if I do not use all of the money in my reimbursement accounts?
Be sure to estimate carefully. Generally you must incur expenses for all of the money in your Medical and/or Dependent Care Reimbursement Accounts by the end of the plan year, there is however a 2 ½ month grace period. Per the Internal Revenue Service, any money left unspent in either account at the end of the plan year and the subsequent 2 ½ month grace period will be forfeited. If you leave the College during the plan year, only medical expenses incurred during your employment period will be eligible, unless you elect COBRA continuation coverage for the Medical Reimbursement Account. Dependent care expenses can be claimed until your account balance is paid to you in full. Dependent care is not an eligible COBRA benefit.