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Reimbursement Accounts allow you to pay health care and dependent care
expenses with earnings on which you pay no federal, state or social security
taxes. This benefit reduces your overall tax liability and saves you money. You
select an amount to be deducted from your pay and deposited into a reimbursement
account on a pre-tax basis. You pay for expenses as they occur, then submit a
claim to recover these paid costs from your Reimbursement Account with tax-free
dollars. You must re-enroll in this benefit annually during the open enrollment
period each fall for the plan year of January 1 - December 31.
The plan is governed by IRC guidelines that limit the reimbursement of either
health care expenses or dependent care expenses to legal dependents. Your same
sex partner is not eligible, though his/her childrens' health care expenses
may be reimbursable, if (1) the child lives with you as a member of your
household for the entire year; (2) is a U.S. citizen, national, or resident of
Canada or Mexico; (3) the child is under 13, and (4) you provide more than
one-half of the child's total support for the calendar year. If you can claim
your partner's child as a dependent on your income taxes, you may also be
eligible to receive reimbursement from the dependent care reimbursement account
program.
Health Care Reimbursement Account
This account can help reduce your costs for co-payments and deductibles
associated with health care and dental insurance, and pay for non-covered
expenses such as eye glasses or adult orthodontia. There is a $4,000 maximum
contribution amount.
Dependent Care Reimbursement Account
This account may be used to pay dependent care expenses for children, aging
parents or dependent adults. There is a $5,000 maximum contribution amount per
family.
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