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Federal law (Section
125 of the Internal Revenue Code) permits you to pay designated expenses
on a pre-tax basis. A Cafeteria/Section 125 Plan is designed to help
you take advantage of this legislation. Section 125 Plans can increase
your spendable income. You now can use pre-tax dollars to pay many
of the benefit costs that you have paid with after-tax dollars. Therefore,
you reduce the amount of income taxes that you pay. Employees can
save on federal, FICA and in certain areas, state and local taxes.
More importantly, reduced taxes mean more spendable income. At the
beginning of each plan year, you simply select from the available
coverages and determine how much you want to pay toward each one.
Those amounts are pro-rated over the year's time and then deducted
at each pay period. Once you incur an expense, notify AmeraPlan,
Inc. by filing a claim form and receipt. You are then reimbursed
for your expenses as they incur throughout the year.
By examining
past health and dependent expenses and by forecasting those expenses
expected in the next year, you determine how many
pre-tax dollars you want allocated from your pay during the coming
year.
Health Care Plan The Health Care Plan covers deductibles, co-payments,
transportation for medical purposes, prescription drugs, over
the counter products
and other non-covered medical, dental, and vision expenses. The
full amount of the Health Care elections must be available to
you at any
time during the FSA plan year, regardless of the amount you have
contributed as of the claim date. Upon termination, you can elect
to remain as a participant in the FSA for the remainder of the
plan year providing you continue to make your monthly contribution
to
the plan (with after-tax dollars). You have 60 days after the
end of your plan year to submit claims for the period covered. You
do not have to be covered by your employer’s medical insurance
plan to participate in the health care plan.
Dependent Care Plan
The Dependent Care Plan covers care
for children under the age of 13, as well as care for the elderly,
disabled, or handicapped.
Your
plan year election for the Dependent Care Account, by law,
cannot exceed more than $5,000 of eligible expenses per plan
year. You
determine how much of your pre-tax earnings will go into
the plan. (Married/joint
tax-return employees can deposit up to $5,000 in the Dependent
Care Plan; this ceiling drops to $2,500 if the participant
is married and filing separate returns). If you are using the
Child
Care Credit
on your individual tax return, the total amount you claim
for the Child Care Credit and the Dependent Care Plan cannot exceed
$6,000.
If your dependent care account has insufficient funds to
cover
a
dependent claim, the system will pay up to the current account
balance and hold the remainder of the claim for payment at
the next deposit. back to products & services |
