Flex Benefit Plan (Procedure 2.6000)

 

Purpose

The purpose of the Flex Benefit Plan, which is permissible through Internal Revenue Service (IRS) Code Section 125-Cafeteria Plans, allows qualifying expenditures paid by employees to be deducted from their pay on a pre-tax basis.

Procedure

1. Administration - The Flex Plan is administered in accordance with IRS code, which shall take precedence if the information in this procedure is inconsistent with the Code. The College maintains a third party administrator for the Flex Plan and their contact information is maintained on the College's website in the Benefits section of the Human Resources web page.

2. Plan Year - The College's Flex Plan Year coincides with the calendar year. This means that Flex Plan enrollments and employee expenditures under the Plan are administered between the months of January through December for each Plan Year. However, the College provides a Grace Period beyond the Plan Year for expenditures (see Grace Period for Claims below).

3. Restrictions on Changes - IRS Code restricts employees from making changes to the Flex Plan during the Plan Year. Only those qualifying changes allowed under the Health Insurance Portability and Accountability Act (HIPAA) for special enrollment rules, family status change rules, or because of significant changes in premiums or benefits in the College's plans are permissible.

Description

1. Employee-Paid Premiums - College-designated premiums paid by employees for College health, dental, and vision insurance plans as well as other designated medical related premiums through ancillary College benefit plans (e.g. cancer indemnity plan) are allowable Flex plan expenditures and are automatically processed through the Flex Plan unless an employee chooses to waive out of the plans.

2. Flexible Spending Accounts (FSA's) - Employees may choose to set aside amounts of their pay into Flexible Spending Accounts (also known as Reimbursement Accounts) on a pre-tax basis through payroll deductions. Then, during the Plan Year employees can be reimbursed from their accounts for qualified FSA expenses.

   1. Annual Open Enrollment - During the annual open enrollment period for benefits, employees can elect whether or not to participate in FSA's for the next Plan Year. In order to participate, employees must enroll for each Plan Year.

   2. Annual Minimums and Maximums

      1. The annual minimum per Plan Year to be contributed to a FSA is $180.

      2. The annual maximum allowable per Plan Year to be contributed to the employee's Healthcare FSA is $5,000.

      3. The annual maximum allowable per Plan Year to be contributed to a Dependent Care FSA is $5,000, but is subject to IRS Code limitations.

3. Grace Period for Claims - The College, to the extent allowable through IRS Code, provides employees with a grace period (e.g. calendar year 2010 grace period is 2 ½ months) beyond the Plan Year end date for incurring qualifying Flex Plan expenditures.

4. Forfeiture of Contributions - Per IRS regulations, any pre-tax contributions deposited into an employee's FSA account(s) that have not been claimed by the end of the grace period for a Plan Year, will be forfeited.

5. Claims Processing

   1. Debit Cards - Employees who complete the College-required training for using the Flex Plan debit cards may choose to use the cards to pay for their qualified FSA expenditures.

   2. Claim Forms for Reimbursement - Employees may choose to complete claim forms for reimbursement of any qualifying FSA expenditures. The College's Flex Plan third party administrator processes claims and forwards reimbursements directly to employees.

6. Plan Information - The Human Resources Department maintains relations with the Flex Plan provider and is responsible for employee training and information regarding the Plan.