Plan in which participant (employee) utilizes spending accounts to pay for health care costs not subject to reimbursement from a health insurance policy or health care provider. The reimbursement is for the participant as well as the participant's dependent (s). Before the plan year (usually July 1 through June 30) begins, the participant decides the amount he or she desires to contribute to the health care account and/or the dependent care account. The maximum amount that can be contributed to the Health Care account is $2000 per year and $5000 to the Dependent Care account. The minimum contribution each year to each account is $300. Any amount, subject to the maximum and minimum, may be chosen by the participant to be deducted in equal installments from the participant's employment income during the plan year. The amount chosen is deducted before taxes are subtracted, thus making the contribution tax-free. As health care expenses are paid by the participant, the participant files a claim with the employer and is reimbursed from the Health Care or Dependent Day Care account. At the conclusion of the plan year, under IRS regulations any funds remaining in either the Health Care or the Dependent Care account are forfeited by the employee; the employer receives the forfeited funds. The particulars of the Health Care account are as follows:
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