Flexible Spending Accounts to Include Dependent Care

1. Flexible Spending Accounts to Include Dependent Care San Mateo County Paul Hackleman

2. What is a Dependent Care FSA? • An IRS Regulated Employer Sponsored Benefit that allows Employee and Spouse to Work • Allows Participants to Recover Out-of-Pocket Payments for eligible Day Care Expenses • Accounts Are Funded from the Participant’s Pre-Tax Payroll Deductions

3. How Does a Dependent Care FSA Work? • Participant Determines Payroll Deduction • Employer Takes Deductions to Fund Selected FSA Accounts • Participant Submits Eligible Claims and Documentation to Mangrove for Reimbursement

4. How Do Dependent Care FSAs Work? • Mangrove Reviews / Processes Claims • Mails / Directly Deposits Bi-Weekly Check • Use of Debit Card • County pays for first two cards • Additional cards are $5 each • Customer Service Representative available 8AM-7PM EST • 24 hour online access to FSA account – up to the minute information

5. How Will a Dependent Care FSA Benefit You? • Pre-Tax Payroll Deductions Reduce Your Taxable Income • Increases Your Spendable Income Since Services Are Paid For from Pre-Tax Dollars

6. A True Pre-Tax Deduction • Contributions are tax free including: • Federal • FICA • State

7. No FSA FSA Gross Monthly Income$5,000 $5,000 Pre-TaxMed. Expenses0 100 Taxable Income$5,000 $4,900 Federal Tax (28%) 1,400 1,372 State Tax (7.3%)365 358 FICA Tax (7.65%)383 375 After-Tax Healthcare Expenses 100 0 Monthly Spendable Income $2,752 $2,795 FSA SAVINGS TOTAL $43 mo./$516 yr. Example - $60,000 Income

8. Who is Eligible? • Regular Employees 20+ Hours per Week • Participation Begins: • Current Employees – January 1 (enroll during open enrollment) • New Employees – First of a Month Following 28 Days of Employment

9. Reimbursement Account • Reimburses Out-of-Pocket Day Care Expenses for an Eligible Dependent • Eligible Dependents must be claimed as an exemption on your tax return • Incurred by Employee to Allow the Employee to Work • Benefit Is Reimbursed Up To Your Year-to-Date Payroll Deductions

10. How Much Can I Contribute? • Dependent Care Account • Minimum $25 per year • Maximum $5,000 annually • $2500 if Married Filing Separately

11. What are Dependent Care Eligible Expenses? • Au Pair Services • Nannies • Nursery School • Private Pre School • Before and After Care • Summer Day Camp

12. Fees for Sick Child Center Day Camps Licensed Day Care Centers Baby sitters Daycare for an Elderly Dependent Day care for a Disabled Dependent Eligible Dependent Care Expenses

13. Ineligible Expenses • Dependent Care FSA is Strictly for the “Well Being of the Child” • Overnight Camps • Registration Fees • Babysitting for “Social Events” • Tuition Expenses • Leave of Absence of Vacation

14. Ineligible Expenses • Any Day Care Expense with a Future Date of Service • FoodExpenses if Separate from the Day Care Expenses • Expenses for Transportation, Books, Clothing, or Entertainment • Expenses incurred prior to the start date of the FSA plan – or incurred after your termination from the FSA plan.

15. Termination of Employment • Once an employee terminates employment: • No more incurred expenses are eligible • Need to submit receipts within 60 days

16. Benny Makes Them EASY to Use! Introducing The Benny Debit Visa Cardfor All Your Qualified FSA Expenses

17. Benny Debit Card • VISA Benny Card Can be Used if the Day Care Provider accepts VISA • VISA Benny Card is used as a “Credit” Card • VISA Benny Card Accrues a Balance as Your Payroll Deductions Occur

18. How Does It Work? The Card gets SWIPED... • At the time of payment for Day Care… And, payment is automatically deducted from your FSA account, provided you have a balance Then, save your receipts in an envelope. It’s that EASY!

19. Benny Debit Card • For Current Participants • Your Benny Card will not expire for 5 years • Funds will be loaded on your Benny Card as the payroll deduction occurs • Same Benny Card can be used for both Healthcare FSA and Dependent Care FSA

20. Benny Debit Card You Need to ACTIVATE and SIGN the Cards • To activate call the number on the sticker on the Card or log onto www.benefitone.com • Customer Service Representatives are Available 8AM – 7PM EST • Each eligible user signs his or her name.

21. Plan Rules for Dependent Care FSA • Expenses Must Be Incurred (Services Rendered) While An Active Participant • Funds Accrue only as Payroll Deductions Occur • Run Out Period (90 days) • Reduction in Taxable Income May Result in Reduced Social Security Benefits

22. Plan Rules • Cannot Change Deduction Unless You Experience a Family Status Change: (must be reported within 30 days of the event) • Marriage or Divorce • Birth or Adoption • Death of Spouse/Dependent • Change in Employment Status of Spouse or Self • Increase or Decrease in Day Care Provider Fees • FMLA or Non-FMLA Leave

23. How Do I Enroll? • Complete the Estimated Expenses Worksheet • Return a Completed Election Form to Human Resources - Pony HRD-133* *Current Participants – Re-enrollment Process

24. The Better You Plan The More You Will Save!