FLEXIBLE BENEFIT PLAN
Administered by
BenefitElect of Alabama, Inc.

The University of West Alabama
FLEXIBLE BENEFITS PLAN INFORMATION

WHAT IS THE FLEXIBLE BENEFIT PLAN?
This plan, authorized by the IRS, allows you to pay pre-tax (for state and federal income tax and social security tax) certain expenses that you know you will incur during the plan year. This will result in cash savings for you on each paycheck.

WHAT DOES IT COST TO PARTICIPATE?
Nothing! The University will pay all of the fees.

HOW DOES THE PLAN WORK?
By having a specified amount of your gross income redirected to pay for eligible expenses during the plan year, you pay for these expenses with before-tax dollars. Since your taxable income is lowered, you pay less state and federal income tax and less social security tax. Thus, your total take-home pay (paycheck plus tax-free reimbursements) is more. Taxes do not apply to reimbursed checks you receive under the plan; therefore, you do not report these as income on your tax returns. Any claim you make for reimbursement under the plan cannot be claimed as a deduction or credit on your tax return. The plan year will run from January 1 through December 31.

WHO IS ELIGIBLE?
All full-time employees are eligible to participate in the plan immediately upon hire.

WHAT EXPENSES CAN BE DEDUCTED?
Amounts that are withheld from payroll and applied to medical and dental insurance premiums. Dependent care expenses ($5,000 maximum per calendar year, $2,500 if married and filing separately.) Other medical expenses not paid by health insurance (see attached list -- $2,000 maximum per plan year).

HOW DO THE FLEXIBLE SPENDING ACCOUNTS WORK?
When you elect to payroll deduct dependent care expenses or unreimbursed medical expenses, flexible spending accounts are set up on your behalf. For expenses set up on a fixed payment schedule, that is, amounts for which you are obligated to pay a fixed amount periodically throughout the year, money is deducted from your pay before taxes are withheld and a separate check is issued along with each paycheck. In order to qualify for this special simultaneous reimbursement, you must do the following:
Have the Acknowledgment of Fixed Payments form completed by your provider and mail receipts (shown on next page) throughout the year (we suggest monthly) in a BenefitElect reimbursement voucher.For expenses that are not on a fixed payment schedule, the money you elect will be withheld from your pay before taxes are calculated and set aside in the appropriate flexible spending account. As you incur these expenses throughout the year, submit copies of your receipts in a BenefitElect reimbursement voucher and you will receive a tax-free reimbursement check within 2 to 3 weeks.

HOW DO I SUBMIT MY RECEIPTS FOR REIMBURSEMENT AND HOW DO I GET MY MONEY?
Request a BenefitElect envelope from the Business Office, complete the few simple blanks on the back side, and insert a copy of the receipt(s) into the envelope. Be sure to sign the voucher or it will be returned. Place postage on the envelope and mail. All reimbursement checks will be sent to the Business Office to be distributed with your next paycheck.

HOW WILL I KNOW THE STATUS OF MY FLEXIBLE SPENDING ACCOUNTS?
The stub attached to every reimbursement check will give you your current account balance. You will receive a statement every quarter updating you on the balance in your accounts. You will also receive a warning letter prior to the end of the plan year as a reminder of the balance left in your account.

WHAT HAPPENS IF I TERMINATE?
If you terminate employment with the Company and you still have money available in your medical flexible spending account, you may elect, through COBRA, to continue to access these monies for expenses incurred after your termination date as long as you continue to make your contributions to the account. You can also have the remainder of the COBRA balance taken out of your final check to take advantage of the tax savings. You will need to contact the Business Office to complete the proper forms and finalize arrangements for these payments.

WHAT HAPPENS IF I HAVE MONEY LEFT IN MY ACCOUNT(S) AT THE END OF THE PLAN YEAR?
The money is forfeited! Therefore, be conservative with your election and indicate only those expenses that you know you will incur for the plan year. You actually have ninety (90) days after the end of each plan year to turn in receipts, but you must incur the expense (e.g. go to the doctor) before the end of the plan year.

CAN I CHANGE MY ELECTION?
Be aware that you can not change any election during the plan year unless the change is due to a change in status (such as marriage, divorce, childbirth, spouse, employment change, your termination of employment, a change in fees by the provider of a premium or dependent
care) as specifically defined in the Plan. Further, your change in election must be consistent with your change in status.

WHEN SHOULD I CLAIM CHILD CARE ON MY TAX RETURN?
If the combined income of you and your spouse is under $14,000 per year, it may be to your advantage to deduct the child care expenses on your income tax return instead of utilizing the flexible benefits plan.

WILL THE FICA SAVINGS IMPACT MY SOCIAL SECURITY BENEFIT?
The plan provides significant tax savings to you; however, because social security taxes are reduced, you may have a slight reduction of benefits at retirement or disability. This could be offset by simply saving a portion of your tax savings in a retirement savings program such as a 401(k) or IRA and/or purchasing additional insurance coverage. NOTE: THIS PROGRAM DOES NOT IMPACT YOUR STATE RETIREMENT INCOME.

WHERE DO I CALL WITH QUESTIONS?
For questions on your account, receipts, or other administrative issues, please call the Administrative Office of BenefitElect at (800) 562-4703. For general, or plan questions you may call the Home Office of BenefitElect at (205) 871-5900 in Birmingham, AL or (800) 257-0986 outside Birmingham. As always, the Business Office is also available to assist you with questions regarding this or any other benefits.
 

ADDITIONAL TAX-DEDUCTIBLE MEDICAL EXPENSES