Agenda - 09-17-2013 - 7a - Laserfiche WebLink

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14 FLEXIBLE COMPENSATION PLAN AND HEALTH SAVINGS ACCOUNTS The County provides a Section 125 Flexible Compensation Plan administered by Tucker Administrators, with a plan year from January 1 to December 31. This Plan consists of a) tax sheltering of health and dental premiums and b) two Flexible Spending Accounts (a medical spending account and dependent /child care spending account). The Spending Accounts enable employees to contribute money on a pre -tax basis to a separate account to be used for certain medical expenses or dependent care. Employees and the County save money because no income or Social Security taxes are deducted from contributions made to the Flexible Spending Account(s). Employees may contribute a maximum of $2,500 to the Medical Spending Account and up to $5,000 to the Dependent /Child Care Spending Account in 2013 and these amounts remain unchanged for 2014. When the High Deductible Plan /Health Savings Account began in 2012, the grace period associated with the Flexible Spending Account (medical) was discontinued to create a greater distinction between the two plans. This grace period allows employees to continue using funds that have accrued during the Plan Year, for up to two and a half months after the Plan Year ends. As part of the High Deductible Plan, employees may contribute to a Health Savings Account at either the Local Government Federal Credit Union or the State Employees' Credit Union. The federal government limits the annual amount contributed on an employee's behalf. In 2014, the maximum contributions are $3,300 (individual) or $6,550 (family). In both 2012 and 2013, the County contributed $1,237.20 for each employee participating in the High Deductible Health plan, which counted towards the maximum contributions above. By making this contribution, the County was paying approximately the same annual cost per employee, regardless of the health plan. Increasing the Health Savings Account contribution continues the philosophy of treating employees as equitably as possible, regardless of health insurance plan selected. Every $100 employees contribute to a Flexible Spending Account or Health Savings Account saves the County $7.65 in Social Security taxes. In 2013, employees' expected contributions of $290,000 to these accounts will result in approximately $22,000 tax savings for both the County and employees. A -10