Agenda - 09-11-2014 - 2 - Laserfiche WebLink

Browse Search

n 9 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). Federal IRS regulations only allow a twelve -month plan year, and a special six -month transition plan year. The Plan Year is not required to be a calendar year. If the County changes to a fiscal year health plan, the Flexible Spending Account plan would be adjusted to ensure compliance with IRS regulations. 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 $5,000 to the Dependent/Child Care Spending Account in a calendar year. 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 2015, the maximum contributions are $3,350 (individual) or $6,650 (family). In 2014, the County contributed $1,416 for each employee participating in the High Deductible Health plan for the full Plan Year. This amount is pro -rated for new employees based on their hire date, at the rate of $118 for each month remaining in the year. The County contribution counts towards the maximum contributions above. Every $100 an employee contributes to a Flexible Spending Account or Health Savings Account saves the County $7.65 in Social Security taxes. In 2014, employees' expected contributions of $309,000 to these accounts will result in approximately $23,650 tax savings for both the County and employees. Number of Employees Contributing to Accounts Type of 2008 2009 2010 2011 2012 2013 2014 Account Child Care Spending 12 12 12 10 13 16 14 Account Medical Spending 95 138 178 214 170 132 142 Account Health Savings n/a n/a n/a n/a 83 89 73 Account ow