SABC Newsletter

DEPENDENT CARE EXPENSES AND NURSING HOME CARE Recently the IRS was asked weather expenses for a nursing home would qualify under a Dependent Care spending account. Dependent care is defined under Code Section 129(e)(1) as "payment of, or provision of, those services which if paid for by the employee would be considered employment-related expenses" under Code Section 21(b)(2). This code requires that the individual must "regularly spend at least 8 hours each day in the employee's household. Because the individual would be in a nursing home, the eight hour requirement will not be met.

It is important to understand the dependent care is designed to care for spouse, children or a qualified dependent(s) that live in the employee's home and needs care during the working hours of the employee. If an employee had a spouse or dependent parent that is incapable of self-care, the employee may have eligible expenses if they meet the above guidelines.

UNREIMBURSED MEDICAL CLAIMS

Although we go to great links to turn around all claims the day they are received, we must follow IRS requirements before paying claims. Please remember that the IRS requires that the following information, from the third party provider must be on each receipt before it can be paid:

* Providers name & address
* Date of service
* Type of service/expense and the cost to the participant
* Prescription drug receipts must have the name of the drug and RX number

Receipt that indicate a balance forward or previous balance do not describe the services or incurred date and cannot be reimbursed.

Unfortunately, new privacy laws do not allow us to contact providers regarding missing information. Therefore, in order to expedite your claim, please ensure the above information is on each receipt. As always, an Explanation of Benefits from your insurance carrier it the best receipt.

PLAN DOCUMENTS AND SUMMARY PLAN DESCRIPTIONS

Periodically, due to regulation or plan changes we must update your plan document and summary plan descriptions. These updates are always sent to the Plan Administrator. To ensure that your plan is in compliance, please be sure that the revisions are kept up-to-date.

Revisions to your Summary Plan Descriptions (SPD) must be sent to each participant so that they are advised of changes. This may be done by mail, e-mail or through your office distribution center. New employees should always receive the most current SPD.

2003 PLAN LIMITS RELEASED

The Economic Growth and Tax Reconciliation Act of 2001 significantly changed many of the factors for plan limits and design and limits. Listed below are some of the new limits for 2003:

Section 401(k) Plan       - $12,000
Section 403(b)                - $12,000
Section 457(b) (2)             - $12,000                                             Section 408 (p)(2)(e)      - $ 8,000
Section 415 Def. Contr. - $40,000
Defined Benefit                - $160,000
Highly Compensated Employees Sec. 414(q)(1)(B)                -    $90,000
Section 613 EGTRRA    - Key Employee in Key Employee in top-heavy plan    Section 416(i)(1)(A)(i) - $90.000           Includible Compensation    Sec. 401(a)(17)
SEP Compensation Limit - $200,000
SEP Earnings threshold    - $450
Transportation Benefits Section 132 Parking - $190.00

HAPPY THANKSGIVING!
We will be closed November 28 and 29 in observance of Thanksgiving. We wish you and your family the Happiest of Holidays.