Beneflex - Flexible Spending Accounts

A Dependent Care Assistance Program (DCAP) allows participants to pay for dependent care with earnings before any taxes are removed. Your saved taxes show up in your take home pay. Qualified dependents can be your children, elderly parents or disabled spouse.

Can I change my elections in the Section 125 Plan at anytime during the plan year?
No. You cannot change your election during the plan year, except in the event of specified status changes. For purposes of Dependent Care Spending Accounts status changes are in relation to:

Unless you are subject to one of these qualifying events, your election is irrevocable for the plan year. If you experience one of the changes noted above, you are allowed to make a new election within 30 days of the event. Your election change must be consistent with the status event that occurred.

How much money can I set aside on a pre-tax basis?
You can set aside a maximum of $5,000 per plan year for dependent care expenses if you are a single parent or married and filing jointly; $2,500 if you are married and filing separately. The legal maximum is also $5,000 per family per calendar year in the event you have access to this Plan through your spouse or another employer.

What are eligible dependent care expenses?
This Plan follows IRS guidelines which allow you to use pre-tax dollars to pay for day care services provided to your children under age 13, as well as an incapacitated parent or spouse. You are eligible if you are a single working parent, you have a working spouse, your spouse is a full-time student for at least five months during the plan year while you are working (refer to the earned income limits for specific contribution levels), or your spouse or dependent parent is disabled and unable to provide for his or her own care.

Eligible expenses include services provided:
(a) inside or outside of your home by anyone other than your spouse, another one of your dependents, or one of your children under 19 years of age, (b) by a child care center, or (c) by a housekeeper whose services include dependent care. Day camps are eligible for reimbursement; overnight camps are not eligible.

Is it better to utilize the Flexible Spending Account or the federal income tax credit for dependent care expenses?
With the current tax structure, it is advantageous in most cases to have the lowest taxable income possible. Therefore, it is better to set aside funds in an FSA for dependent care expenses and reduce your taxable income rather than utilize the tax credit. This is particularly true if your gross family income is $28,000 or more or below $16,000. See your tax consultant for further information regarding your situation.

When and how will my provider be paid?
Providers are paid on a weekly or monthly basis depending on your preference. If you utilize the efficient Electronic funds transfer method, the money will be transferred to your providers account every Friday if you choose a weekly pay out or on the first Friday of the month if you chose the monthly method.

How will I know the balance in my Flexible Spending Plan?
Call the toll-free telephone number, 800-925-4087, to access this information.

What happens if there is money left in my account at the end of a year and I have no more reimbursable expenses?
Under IRS regulations, the money in your account will be forfeited and reverts to the general asset account of your employer. This is known as the "use it or lose it" feature of a Section 125 plan. For this reason, you need to make conservative estimates of your reimbursable expenses prior to each plan year. You have a grace period at the end of each plan year in which to file claims for expenses incurred after the date you enrolled and during the plan year.