Frequently Asked Questions
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Frequently Asked Questions
Here’s the most frequently asked questions about Flexible Benefit Plans. If your question is not listed below, feel free to call us:
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How does a Flexible Spending Account work?
Your tax-free deductions are deposited into your Reimbursement Accounts. Your eligible dependent care expenses will be reimbursed in full up to the maximum that has been deducted from your salary at the time you submit your claim. Your eligible medical care expenses will be reimbursed in full up to the maximum amount of your annual election at the time you submit your claim. The expenses must be incurred during the plan year while you are covered by the plan. You do not have to enroll in the Group Insurance Plans in order to enroll in either the Medical Care Reimbursement or Dependent Care Reimbursement account or both.
If I don't use all the money in my Medical Care Reimbursement Account, can I transfer that to my Dependent Care Reimbursement Account?
No. These accounts are separate and not interchangeable.
What is the advantage of participating in a spending account?
You will save on Federal and State Income Taxes, Social Security Tax, Medicare and Voluntary Disability Insurance (or State Disability Insurance). However, since many factors can affect your individual tax situation, you may want to check with a tax advisor.
What happens to the funds I set aside?
If you enroll in both accounts, the funds you set aside are credited into two separate accounts – one for dependent care expenses and one for out-of-pocket health care expenses. Dependent Care Account funds are reimbursed as your contributions accumulate in your account. Medical Care Account funds are available for immediate reimbursement up to your annual election amount.
What happens if there is money left in my account(s) at the end of the year?
If you have leftover funds and 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” rule. For this reason, you need to make conservative estimates of your reimbursable expenses prior to each plan year.
I just had a new baby. Can I enroll in the Dependent Care Account now?
You can enroll within 30 days after returning to active work. If you incur any dependent care expenses while on maternity leave, they do not qualify as eligible expenses.
Can I use my Medical Care Account for health care premiums?
No, health care premiums are not eligible expenses. Also, your premiums are automatically deducted from your paycheck on a pre-tax basis.
Can I change my contribution amount?
Only under certain family status changes. See Changing your Contributions for more information.
What are allowable expenses?
See Medical Care Reimbursement Account or Dependent Care Reimbursement Account for eligible expenses.
Is cosmetic surgery covered under my Medical Care Account?
No, cosmetic surgery is not an eligible expense.
Can I use my Dependent Care Account for private school tuition?
No, private school tuition is not an eligible expense.
Does this affect my Social Security Benefits?
Because amounts deferred under the Plan are not counted as wages when determining your Social Security benefit, it is possible that there may be a reduction in your Social Security benefits.
Can I withdraw all of my money from my accounts before I have contributed the full amount?
You can withdraw your entire annual election amount with a qualifying expense from your Medical Care Account at any time during the plan year.
In the case of Dependent Care, you will only be reimbursed up to the amount contributed at the time you make a claim.