What is a Cafeteria Plan?
IRS code Section 125, allows employers to adopt a plan in which employees, through salary reduction, can pay for eligible benefits and medical or dependent care expenses on a pre-taxed basis.
Employees who purchase group insurance and other benefits through the company greatly reduces the cost, offering your employees a great benefit for their dollar. In addition, putting those benefits along with other allowed benefit (i.e. Dependent Care and Unreimbursed Medical expenses) under a qualified plan can offer a substantial tax savings for the employee and employer.
Your Plan includes:
Flexible Spending Accounts (FSA)
Dependent Care Plans
Unreimbursed Medical Plans
Deductible Medical Expenses 2020
OTC Drug List 2020
FSA Reimbursement Options
Direct Deposit Form
How Your Plan Works
Monday, November 23rd, Benefit Concepts will be on site to enroll all employees for our open enrollment benefits.
What is a Cafeteria Plan? A Cafeteria Plan is a valuable benefit that not only just allows you to pre-tax, (exclude from W-2 wages), eligible benefits such as; health, dental or vision insurance premium plans, it also allows you to elect voluntary benefits such as as Flexible Spending Accounts “FSA” dependent care expenses, and out-of-pocket Unreimbursed Medical expenses.
Benefit elections you make during this Open Enrollment, will become effective January 1, 2021.
Changes this year? There are no changed to the Cafeteria Plan for you this year.
REMINDER: Guess whats back?
Recently in May 2020, Congress passed the CARES ACT (COVID-3 Stimulus Bill), which included language to permanently reinstate coverage for over-the-counter drugs for FSAs and HSAs, without the need for a prescription. That’s right? OTC with medicine previously taking away by the Obama Care is back. And with an added bonus. They also included menstrual care products to the list of eligible items. Check our our OTC list, on the left side of this postcard.
To be reimbursed, provide the cash register receipt that lists the products purchased. It should list the product name, and may have a FSA code beside it. The CARES ACT allows expense for 2020, back to January 1, 2020. So be sure to count your OTC drug/item cost in for your Unreimbursed Medical FSA for 2021 Open Enrollment choices.
Note: OTC items/drugs purchased from a non chain or smaller drug store, may not have the item listed on the cash register receipt. Sometimes it is just coded as OTC. Therefore, you would have to attach to box top with price showing, and name of product to identify the item for reimbursement from your FSA plan.
Must I complete my election if I do not want to make a change?
For 2021, we are asking all employees to please be sure to complete your new year choices, as your elections will not roll. When you elect a qualifying benefit/insurance, the insurance will auto select the Cafeteria Plan and your eligible insurance premiums will be deducted on a before tax basis. Pre-taxing your premiums, lowers your W-2 reported wages by the amount of the premium(s) and give you an increase in spendable income. FSA is a choice option, and must be made a new election each year.
Remember, once the new Plan Year begins you will not be allowed to make any changes to your election unless a Status Change occurs, as election under a Cafeteria Plan are irrevocable for the Plan Year, unless you qualify for a Status Change.
FLEXIBLE SPENDING ACCOUNTS “FSA” PLANS
Dependent Care Expenses
If you have qualified dependents that require care while you and/or your spouse work, participation in this account will save you valuable tax dollars. Expenses include day care, after school care, nursery school, pre-school and summer day camp.
- The deduction of Dependent Care offers each employee a tremendous tax savings. If you currently have these expenses, it may be to your benefit to take advantage of the plan. All requests for reimbursement are processed the same day they are received by SABC, (based on funds availability).
- Simply determine the election amount for the above Plan Year, for your Flexible Spending selection.
- Elections cannot exceed the annual maximum for Dependent Care of $5,000 (filing a single or joint return) and $2,500 (married filing a separate return).
- Just select the Dependent Care FSA option in the PayCom open Enrollment and identify the cost you will incur for the Plan Year. Dependent care may include registration fees. For more information, go to www.sabcflex.com.
UNREIMBURSED MEDICAL EXPENSES (URM)
If you, your spouse or qualifying dependent(s) have medical expenses, which you have to pay out of pocket such as; medical deductibles, co-insurance, co-pays, prescription drugs, dental expenses or eye care expenses, you will save valuable tax dollars by participating in this spending account. Your FSA plan has the following features:
- FSA Unreimbursed Medical maximum, $2,750 Plan Year. (No change for Plan Year 2021).
- If I participate in the FSA Unreimbursed Medical and I terminate, how is my Plan treated. Unreimbursed Medical participants will make an election to participate in the Unreimbursed Medical Spending Accounts for the plan year. You must participate in the Unreimbursed Medical portion of the plan for the full plan year. Your total election is available to you anytime during the year when you incur an expense(s). Should you terminate during the plan year, in lieu of COBRA; your remaining election will come from your last paycheck. Expense claims may be for you and/or an eligible family member, regardless if they are on your employers group health insurance or not. (Dependent is based on the IRS definition of a dependent for Dependent Care and Dependent Adult “to” the age 27 for Unreimbursed Medical).
- Your plan offers a 60 day run-out period after the close of the Plan Year, to submit in claims incurred to your FSA Plan.
- Following the close of the run-out period, your plan shall close and remaining balances not claimed or rolled, shall be forfeited based on the IRS regulations use-it-or-lose-it.
Cafeteria Plan elections are irrevocable for the Plan Year. Once you have made your selection, you must have a qualifying Status Change in order to change your benefit, after the Plan has begun.
How to Login to Flexible Spending Plan?
Note: If you are currently an FSA Participant, and have already registered with the SABCFlex Portal site, you may find it easier to login using the below option, and you may use your created User Login and Password.