Benefits

Flexible Spending Policy

Medical Expense Spending Account
If you elect medical expense reimbursement, an account will be established in your name from which you can pay for any medical and dental expenses that are not paid for under the medical and dental coverages under the Program or any other health plan. It ems such as eyeglasses, hearing aids, counseling fees and health insurance deductibles and co-payments are examples of expenses that may be reimbursed. Prescription drugs and insulin are the only drugs for which you may be reimbursed from the account. The cost of over-the-counter drugs may not be reimbursed. Premiums for health insurance may not be reimbursed. Premiums for medical and dental coverage described above are paid directly to the College and not from the account. A partial list of eligible expenses is attached as Appendix B. In addition, IRS Publication 502 describes the types of medical and dental expenses that may be reimbursed through the account, with the exceptions described above. Generally, you may be reimbursed only for those types of medical expenses normally deductible on your federal income tax return (without regard to the restriction that only medical expenses in excess of 7.5% of adjusted gross income are deductible).

During the enrollment period you must estimate how much you believe you will spend for eligible medical expenses in the next Plan Year. The maximum monthly contribution you may make to this account is $4,000. At all times during a Plan Year you will be permitted to be reimbursed up to the total of the projected credits to your account over the entire Plan Year, less the amount previously reimbursed. However, any amount that you do not use by the end of the Plan Year will be forfeited.

You may claim reimbursement for your own eligible expenses or for the eligible expenses of your spouse or any person whom you claim as a dependent on your federal income tax return. Amounts reimbursed from this account are not subject to income taxes. Amounts reimbursed from this account are not subject to income taxes.

If you terminate employment, you may choose to continue contributions as permitted under COBRA (by contributing 102% of the monthly premium). Alternatively, you may make a final payroll deduction to cover the balance of your annual contribution electi on. This option allows you to have your deduction taken on a pre-tax basis and allows you to continue to submit claims for expenses incurred throughout the remainder of the Plan Year.

Dependent Care Expense Spending Account
If you elect dependent care expense reimbursement, an account will be established in your name from which you can pay for any eligible dependent care expenses. To be eligible, expenses you incur for the care of a child or a disabled adult dependent (a "qualified dependent") must enable you (and your spouse, if you are married) to be gainfully employed. For this purpose, a "qualified dependent" means any individual who receives over half of his support from you, and who is (i) your dependent who is under the age of 13 and with respect to whom you are entitled to a tax exemption, or (ii) your dependent or spouse who is physically or mentally incapable of caring for himself or herself.

Expenses for dependent care services are covered by the Program only if the services are performed (i) in your household, or (ii) outside your household for (A) the care of a qualified dependent under age 13, or (B) the care of any qualified dependent who spends at least 8 hours a day in your household.

The expenses incurred for services that are performed by a "dependent care center" qualify under the Program only if the center complies with all applicable state and local laws and regulations. For this purpose, a "dependent care center" is a center that provides care for more than six individuals (other than individuals who reside at the center), and receives a fee, payment or grant for providing such services (regardless of whether the facility is operated for a profit).

Payments to your relatives or to members of your household are covered by the Program only if the person to whom the payments were made is not your child who is under the age of 19, your dependent, or your spouse.

The most you can receive under the Program for dependent care assistance is the least of:

In the case of a spouse who is a full-time student at an educational institution or is physically or mentally incapable of caring for himself or herself, such spouse shall be deemed to have earned income of $200 per month if you have one dependent and $400 per month if you have two or more dependents.

You must report on your tax return the social security number or the employer identification number of any dependent care service provider.

Dependent care expenses for which you are reimbursed under the Program will not qualify for the federal tax credit available with respect to dependent care expenses. Under the Internal Revenue Code, you are entitled to a dollar for dollar credit again st your income tax liability in an amount equal to a specified percentage of your qualifying dependent care expenses. Expenses cannot be taken into account for purposes of the tax credit to the extent they exceed the lesser of your or your spouse’s earne d income. Therefore, you must determine whether it is more advantageous for you to forego participation in the Program in order to avail yourself of the federal tax credit.

As a general rule, depending upon your particular situation, paying for qualifying dependent care expenses through compensation reduction under the Program will produce greater tax savings the higher your income level. GENERALLY, IF YOU EXPECT YOUR ADJUSTED GROSS INCOME (INCLUDING THAT OF YOUR SPOUSE) TO BE $24,000 OR LESS, AND YOU EXPECT TO INCUR NO MORE THAN $2,400 ($4,800 IF YOU HAVE MORE THAN ONE QUALIFYING DEPENDENT) OF QUALIFYING DEPENDENT CARE EXPENSES, IT WILL NOT BE TO YOUR ADVANTAGE TO PA RTICIPATE IN THE PROGRAM, AND YOU WILL BE BETTER OFF TAKING THE FEDERAL TAX CREDIT. If you are not certain as to what extent, if any, it is to your advantage to participate in the Program, you should consult your personal tax advisor.

Another tax credit available under current tax law is the earned income credit. This credit also reduces dollar-for dollar the federal tax you have to pay, but is calculated somewhat differently from the child care credit described above. The credit is available to individuals with a child who is under age 19 (under age 24 if a student) or who is totally and permanently disabled. An additional credit is available to individuals with a child who is under one year old. The credit does not depend on the amount you pay in child care expenses. The earned income credit has no effect on the amount you can contribute under the Program for dependent care expenses, and the earned income credit cannot be claimed for any individual for whom you claim the child care credit described above. Moreover, the use of the dependent care spending account may result in a reduction in your taxable income thus qualifying you for the earned income credit where you would not otherwise have qualified. Again, you should consult your personal tax advisor for more information.

Amounts reimbursed from this account are not subject to income taxes. No expenses incurred after you terminate employment will be eligible for reimbursement.

CESSATION OF PARTICIPATION

You will remain a participant in the Program until the earliest of the following dates:

Note: If the College should find that you or any dependent have obtained benefits under the Program fraudulently, participation in the Program will be terminated for the individual who committed fraud.
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