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Fair Labor Standards Act Revisions

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Title: Fair Labor Standards Act Revisions


1
(No Transcript)
2
Agenda
  • A Flexible Spending Account overview
  • How it works
  • Health Care reimbursement account
  • Dependent Care reimbursement account
  • Important planning information
  • Submitting claims for reimbursement
  • 2008 Open Enrollment information
  • Resources

3
Flexible Spending AccountOverview
  • Employer-sponsored plan
  • Pre-tax payroll deductions deposited into the
    Flexible Spending Account
  • Use these dollars for reimbursement of qualified
    out-of-pocket expenses
  • Pay less taxes
  • Increase your take-home pay
  • Two kinds of accounts
  • Health Care reimbursement account
  • Dependent Care reimbursement account

4
Health Care Reimbursement Account Overview
  • Reimbursement for qualified expenses
  • IRS definition
  • costs of diagnosis, cure, mitigation,
    treatment, or prevention of disease, and the
    costs for treatments affecting any part of the
    body. IRS Pub. 502
  • Includes Medical, Dental, Prescription, Vision,
    Hearing, and Over-the-counter medications (under
    certain circumstances)

5
Health Care Reimbursement Account Process
  • Estimate annual out-of-pocket expenses not
    covered by insurance
  • no minimum contribution per paycheck
  • 5,000 maximum annual contribution
  • Enroll in Flexible Spending Account in November
  • Incur eligible out-of-pocket expenses in 2008
  • File claims and receive reimbursement

6
Health Care Reimbursement Account Sample Expenses
  • Office visit co-pay
  • Health care deductible
  • Prescription co-pay
  • Orthodontia expenses
  • Prescription eyeglass and contact lenses
  • Acupuncture
  • Blood pressure monitor
  • Hearing aids
  • Over-the-counter medications (purchased to treat
    an existing or imminent medical condition)
  • Allergy, cold, cough, flu, nasal, sinus
  • Diabetic supplies
  • Denture adhesive
  • Sleeping aids
  • Pain relievers, aspirin and non-aspirin

IRS Publication 502 Medical and Dental
Expenses www.irs.gov/pub/irs-pdf/p502.pdf
7
Health Care Reimbursement AccountW. W. Wildcat
Experience
  • Without FSA With FSA
  • Annual Salary 30,000 30,000
  • Office visits 150
  • Prescription co-pays 500
  • Dental deductibles 100
  • Prescription glasses/contacts 600
  • Over-the-counter medication 150
  • Total out of pocket expenses 1,500
  • Pre-tax deduction 0
    1,500
  • Taxable Income 30,000 28,500
  • Federal Income Tax 1,507
    1,345
  • State Income Tax 347
    309
  • Social Security (FICA) Tax 2,286
    2,162
  • Total taxes 4,140
    3,816
  • Net paycheck 25,860 24,684
  • After-tax expenses 1,500
    0

324
Annual savings
8
Health Care Reimbursement AccountW. W. Wildcat
Experience
  • Without FSA With FSA
  • Annual Salary 60,000 60,000
  • Office visits 150
  • Prescription co-pays 500
  • Dental deductibles 100
  • Prescription glasses/contacts 600
  • Over-the-counter medication 150
  • Total out of pocket expenses 1,500
  • Pre-tax deduction 0
    1,500
  • Taxable Income 60,000 58,500
  • Federal Income Tax 5,976
    5,734
  • State Income Tax 1,375 1,319
  • Social Security (FICA) Tax 4,572
    4,448
  • Total taxes 11,923 11,501
  • Net paycheck 48,077 46,999
  • After-tax expenses 1,500
    0

422
Annual savings
9
Dependent Care Reimbursement Account Overview
  • Reimbursement for qualified dependent care
    expenses that are
  • necessary to allow you to work or look for work
  • necessary to allow your spouse to work, look for
    work, or be a full-time student
  • Must have custody of dependent more than 50
    percent of the year
  • Special considerations for UA Child Care Voucher
    Program participants
  • http//lifework.arizona.edu/cc/ee_prog/CC_Voucher_
    Prog_Guidelines.pdf
  • Contact UA Life Work Connections, at 621-4365

10
Dependent Care Reimbursement Account Sample
Expenses
  • Child care
  • Nanny service
  • Nursery school
  • Elder care
  • Expenses may be paid to a relative (child, parent
    or grandparent of participant) IF
  • caregiver is not under age 19
  • caregiver is not a tax dependent of the
    participant
  • IRS Publication 503 Child and Dependent Care
    Expenses
  • www.irs.gov/pub/irs-pdf/p503.pdf

11
Dependent Care Reimbursement AccountW. W.
Wildcat Experience
  • Without FSA With FSA
  • Annual Salary 30,000 30,000
  • Total dependent care expense 5,000
  • Pre-tax deduction 0
    5,000
  • Taxable Income 30,000 25,000
  • Federal Income Tax 1,507
    966
  • State Income Tax 347
    222
  • Social Security (FICA) Tax 2,286
    1,872
  • Total taxes 4,140 3,060
  • Net paycheck 25,860 21,940
  • After tax expenses 5,000
    0
  • Actual take-home pay 20,860 21,940

1,080
Annual savings
12
Dependent Care Reimbursement AccountW. W.
Wildcat Experience
  • Without FSA With FSA
  • Annual Salary 60,000 60,000
  • Total dependent care expense 5,000
  • Pre-tax deduction 0
    5,000
  • Taxable Income 60,000 55,000
  • Federal Income Tax 5,976
    5,165
  • State Income Tax 1,375
    1,188
  • Social Security (FICA) Tax 4,572
    4,158
  • Total taxes 11,923 10,511
  • Net paycheck 48,077 44,489
  • After tax expenses 5,000
    0
  • Actual take-home pay 43,077 44,489

1,412
Annual savings
13
Important Planning Information
  • Use care when estimating expenses
  • Be conservative
  • Review, consider current year expenses
  • Do you anticipate similar expenses for 2008?
  • Use the worksheet
  • Track expenses in 2008 for enrollment in 2009

14
Who is ASI?
  • Third party administrator
  • Answers questions about this plan
  • Receives, reviews and approves claims
  • Sends reimbursement directly to you through
  • Direct deposit
  • Check mailed to your home address
  • (800) 659-3035
  • www.asiflex.com

15
2008 Open Enrollment
  • November 1 30
  • Effective January 1, 2008 through December 31,
    2008
  • Enroll using Employee Link http//emplink.arizona.
    edu
  • Current participants must re-enroll to ensure
    participation in 2008

16
Resources
  • HR website (plan information)
  • www.hr.arizona.edu
  • Employee Link (to enroll)
  • http//emplink.arizona.edu
  • ASI (claims information)
  • www.asiflex.com
  • IRS Pub. 502 (medical/dental care)
  • www.irs.gov/pub/irs-pdf/p502.pdf
  • IRS Pub. 503 (dependent care)
  • www.irs.gov/pub/irs-pdf/p503.pdf

17
Thank you for your time
  • Questions?
  • Contact Human Resources at benefits_at_email.arizona.
    edu
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