Human Resources - IRC-125 Flexible Benefit Programs
Associate Superintendent,
Karen Sakata
925.942.3387
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As an employee of the CCCOE, you are entitled to participate in a Section 125 Flexible Benefit Plan. The American Fidelity Assurance Company administers our plan.
Enrollment
opportunities are limited to the first 30 days of employment, change
in status (i.e. birth of child), or the annual open enrollment period.
To enroll contact Dale Cavestany at (800) 365-8306 x317.
How
Can This Help You?
The
cost saving advantage of the plan is simple. Any benefit costs or insurance
premiums you pay under the plan are paid on a pre-tax basis. The example
below illustrates the advantage of the Section 125 Plan in comparison
to a plan without the benefits.
| WITHOUT SECTION 125 | WITH SECTION 125 | ||
| Average monthly salary | $2,000 |
Average monthly salary | $2,000 |
| Less estimated Federal & State taxes (20%) | -$400 |
Less your out-of-pocket benefit costs | -$250 |
| Less estimated FICA | -$153 |
||
| Taxable income | $1,447 |
Taxable income | $1,750 |
| Less estimated Federal & State taxes (20%) | -$350 |
||
| Less out-of-pocket benefit cost | -$250 |
Less estimated FICA | -$133 |
| Spendable income | $1,197 |
Spendable income | $1,267 |
If you are subject to FICA taxes, there may be a slight reduction in your Social Security benefits due to the reduced FICA contributions.
SECTION 125 ENROLLMENT
This planning time is a very important part of you and your family's
financial future. Please review the information below. Your local American
Fidelity representative, Dale Cavestany, will be available to assist
you with your enrollment and any questions.
Dependent
Care Expenses: Up to $5,000 per year for dependent care expenses
may be deducted on a pre-tax basis. In most cases your savings will
increase using this process instead of the federal tax credit.
Medical
Reimbursement: Up to $3,600 per year may be deducted on a pre-tax
basis for medical expenses that you incur for treatment of you, your
spouse, and your eligible dependents. This includes but is not limited
to medical co-payments, orthodontics, eye exams, glasses, contact lenses
and prescription drugs.
Premium
Conversion: A Section
125 Plan allows employees to have eligible insurance premiums taken
out of their paycheck before taxes. Eligible insurance benefits include
health, dental, vision, disability, cancer and life insurance.
TO ENROLL CONTACT DALE CAVESTANY AT (800) 365-8306 x.317.
FLEXIBLE
EXPENSE REIMBURSEMENT ACCOUNTS
The Expense Reimbursement Accounts allow you to direct a part of your
pay, on a pre-tax basis, into special accounts that can be used throughout
the year to reimburse yourself for certain out-or-pocket medical expenses
and/or dependent day care expenses. In fact, there are two separate
accounts: An Unreimbursed Medical Expense Account and a Dependent Day
Care Account.
Because
your money goes into your reimbursement accounts before federal and
state income or Social Security taxes are withheld, you pay less in
taxes, and ultimately have more disposable income. Your tax advisor
can tell you whether this tax exemption applies in your state.
The Expense Reimbursement Accounts allow you certain tax advantages and are governed by specific federal regulations. For example, once you enroll, you cannot change your election during the plan year unless you have a change in status that affects your need for the benefit. In most cases the Unreimbursed Medical Expense Account cannot be changed for any reason and cannot be dropped except for termination of employment. Federal regulations also require that any money you deposit in a reimbursement account that is not used to cover eligible expenses incurred during the same plan year will be forfeited ("use it or lose it" rule).
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77 Santa Barbara Road, Pleasant Hill, CA 94523