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11 <br /> FLEXIBLE COMPENSATION PLAN AND HEALTH SAVINGS ACCOUNTS <br /> The County provides a Section 125 Flexible Compensation Plan administered by Tucker <br /> Administrators, with a plan year from January 1 to December 31. This Plan consists of a) tax <br /> sheltering of health and dental premiums and b) two Flexible Spending Accounts (a medical <br /> spending account and dependent/child care spending account). <br /> The Spending Accounts enable employees to contribute money on a pre-tax basis to a separate <br /> account. Employees and the County save money because no income or Social Security taxes <br /> are deducted from contributions made to the Flexible Spending Account(s). Employees may <br /> contribute a maximum of $2,500 to the Medical Spending Account and up to $5,000 to the <br /> Dependent/Child Care Spending Account each plan year in 2012. <br /> As part of the High Deductible Plan, employees may contribute to a Health Savings Account at <br /> either the Local Government Federal Credit Union or the State Employees Credit Union. The <br /> maximum amount allowed for 2012 is $3,100 (individual) or $6,250 (family). <br /> Every $100 employees contribute to a Flexible Spending Account or Health Savings Account <br /> saves the County $7.65 in Social Security taxes. In 2012, employees' contributions of $463,000 <br /> to these accounts will result in approximately $35,000 tax savings for Orange County and <br /> $26,000 tax savings for employees. <br /> Number of Employees Contributing to their Accounts <br /> Type of Account 2008 2009 2010 2011 2012 <br /> Child Care <br /> Spending 12 12 12 10 13 <br /> Account <br /> Medical Spending 95 138 178 214 170 <br /> Account <br /> Health Savings 83 <br /> Account <br /> Health Care Reform <br /> Effective January 1, 2011, the Patient Protection and Affordable Care Act impacted all medical <br /> spending accounts by requiring prescriptions for over-the-counter medications. Effective <br /> January 1, 2013, the maximum annual allowable contribution to medical spending accounts will <br /> be capped at $2,500. In 2012, the County aligned the plan year for the Flexible Spending <br /> Accounts with other benefits plan years to January 1-December 31, 2012. <br /> No Social Security or Medicare taxes are paid on the amounts employees contribute to either <br /> Medical or Dependent Care Spending Accounts. In 2012, the County is expected to save <br /> approximately $14,000 in taxes because of employee contributions. <br /> A - 9 <br />