With health care costs rising faster than both salaries and inflation, wouldn’t it be great to find a way to reduce the out-of-pocket costs?
Wouldn’t it be great to find a way to pay those costs with before-tax dollars?
Well, it’s now possible to do both with one benefit plan – the Flexible Benefit Plan for UCC Ministries (generically referred to as the “Flexible Spending Account” or “FSA”).
The FSA consists of two reimbursement accounts where clergy and lay employees can elect to set aside a portion of their earnings, before federal income and FICA taxes are withheld, to pay for certain medical and dependent care expenses they will face in the coming year. Each pay period during the year, dollars are deducted from salary and placed in the FSA.
We have partnered with Highmark BCBS to administer the Flexible Benefit Plan effective January 1, 2018. When an eligible medical expense is incurred, the participant files a claim and a reimbursement, up to the amount of the elected annual deferral, is paid from the FSA, even if that amount has yet to be deposited in the participant’s account. Dependent care expenses are reimbursed up to the balance in the dependent care reimbursement account.
A detailed list of eligible expenses can be found below, but may include
- deductibles and copayments not reimbursed by the UCC Medical and Dental Benefits Plan;
- expenses such as the cost of eyeglasses that are not covered by the UCC Medical Plan or other insurance;
- eligible dependent care expenses.
See how it is possible, at very little cost to UCC churches and church-related employers, to provide clergy and lay employees with an opportunity to keep more of what they earn.
Remember, these are expenses that people will be facing with or without the Flexible Benefit Plan, so why not choose now to help ease the burden?
|How the FSA Allows Clergy and Lay Employees |
to Keep More of What They Earn
|Without the FSA||Using the FSA|
|Estimated Income Taxes**||$6,000||$5,676|
|Estimated FICA Taxes||$3,825||$3,618|
|After-Tax Expenses||$2,700||$ 0|
|Net Disposable Income||$37,475||$38,006|
|Savings Using the FSA||$531|
|*The Maximum allowable FSA election is determined by the IRS.
**Based on 2018 rates for Married Filing Jointly
To the extent not covered by the Medical and Dental Benefits Plan, expenses that qualify for reimbursement may include:
- Plan deductibles
- Plan copayments
- Well-baby care
- Organized weight loss programs that are medically prescribed
- Vision care, including LASIK
- Hearing aids and related expenses
- Contact lenses
- Certain over-the-counter medications that are obtained with a physician’s prescription
- Fertility enhancement
- Dental expenses
- Special home modifications if their purpose is a part of medical care
- Chiropractic services
- Body scanning
- Transportation to obtain medical care
- Smoking cessation programs
- Braille books and magazines
- Certain non-standard or experimental medical procedure.
Dependent care expenses that may qualify for reimbursement may include:
- Child care centers that care for six or more children and meet the IRS definition
- Nursery schools
- Caregiver for a disabled spouse or dependent that lives with the employee
- Child care providers
- Certain household expenses related to a qualifying dependent’s well-being
- Day camps