Flexible Spending Accounts

1. Flexible Spending Accounts Making your health care $$ go further Presented by: Cynthia D. Adams, CEBS Integrated Benefit Services (800) 981-9998 (800) 681-9916 - FAX www.integratedbenefitservices.com

2. What is a Flexible Spending Account • A Flexible Spending Account (FSA) is an individual account set up in your name to reimburse you for eligible out-of-pocket health care and dependent care expenses incurred by you and your dependents. • Contributions made to an FSA are taken on a pre-tax basis.

3. How the FSA plan works • $$ currently paid towards out-of-pocket medical expenses and child care expenses are deducted from your paycheck on a pre-tax basis. • Your income is lowered by these deductions and you pay less federal, state and social security taxes. • When you incur an expense, you submit it for reimbursement and receive a tax-free reimbursement for the expense. • Your annual amount for medical expenses is available for reimbursement at any time during the plan year regardless of the amount you have contributed

4. Tax Benefits of an FSA • Your contributions to an FSA are deducted on a pre-tax basis • The taxable amount of your paycheck is reduced, creating tax savings. • The lower your “taxable income” the lower your taxes!

5. Example of Tax Savings

6. The FSA is designed to: • Expand your current employee benefits • Increase your spending income • Lower your Federal, State and Social Security Taxes • Receive tax-free reimbursements for your out-of-pocket health care and dependent care expenses, including expenses incurred for your eligibleover-the-counter (OTC) medical purchases • Meet you unique benefit needs

7. How Much to Contribute • Estimate your annual out-of-pocket expenses • Check out the Integrated Benefits Services website and use the on-line calculator to calculate your tax benefits based on your personal pay and expenses www.integratedbenefitservices.com

8. A Word of Caution • You can only make your election annually unless you have a change in status, such as the birth of a baby, marriage, or change’s in your spouse’s job • Funds cannot be transferred between reimbursement accounts • Expenses generally must be incurred in the active plan year • Any money left in your account at the end of the plan year is forfeited… so don’t over-estimate your expenses and use all your $$ that you set aside

9. Does the FSA work for you? • Yes, if…. • You pay a co-pay when you go to the doctor • You pay a co-pay when you pick up a prescription • You wear glasses or contacts • You pay for services when you go to the dentist • You buy Tylenol, Advil, band-aids, nasal spray, eye drops, contact lens solution, etc.