Our Products › FAQs
Is it really OK with the IRS?
Yes! Section 125 was added to the Internal Revenue Code to allow it. Your reimbursements are not taxable income, but you may not deduct these same expenses on your tax return. You can deduct any additional IRS-eligible expenses that have not been reimbursed in accordance with limitations set by the IRS.
Do I have to have a lot of expenses to participate?
No. You may put aside enough money to cover what you reasonably expect to spend during your plan year. You should not put more than that, because if you do not use the money, you will lose it. The Internal Revenue Service mandates this provision of the law.
If I enroll in the Insurance Premiums Account, how will I get reimbursed?
No reimbursement is necessary, because the money withheld from your paycheck is combined with your employer's contribution and used to purchase insurance coverage, just as it is now.
How do I figure how much to put into my medical expense account?
Look at your receipts or check register for the last year or two to see what you spent on medical expenses for youself and qualified family members. Or, try to think about what you expect to spend on medical expenses during your plan year.
Can't I get a dependent care tax credit now?
Yes, and you can continue to use your dependent care tax credit OR you can use a Flexible Spending Account. You cannot use both. In general, the "Flex" account will be more advantageous if your combined annual family income is greater than $25,000. There are limitations on your ability to use both a Flexible Spending account and dependent care tax credit. Please consult a tax advisor to determine the appropriate option for your situation.
What is the minimum I can put into my account(s)?
There is no minimum.
What is the maximum I can put into my account(s)?
The maximum for each type of account is:
| Premiums | Your actual contribution for your payroll-deducted insurance premiums, up to your earned income. |
| Medical | The amount specified in your summary plan description as determined by your employer. |
| Dependent Care |
$5,000 per plan year and calendar year for the head of household or married filing joint tax return. $2,500 per plan year and calendar year for married filing separate tax return. |
How do I get reimbursed?
Soon after you sign up, you will be sent more information with your first request form(s). You request reimbursement by sending proof of your payment with a reimbursement request form to BSHI. Upon receiving your reimbursement check, you will receive another reimbursement request form for future claims.
What is proof of payment?
This would be a copy of your statement, visit record, Report to Member or similar document. It should show the date, description of service, and the amount of payment.
When will I be reimbursed?
Requests for reimbursement totaling a minimum of $l0 will be paid daily. You should receive your reimbursement check within 7 to 10 working days after your reimbursement request form is received by BSHI.
How do I sign up?
You must complete an election and compensation reduction and agreement form each plan year. Please check "yes" or "no" for each of the account choices. If you check "yes," you must fill in an amount you wish to elect. You must complete the form even if you choose not to participate before the plan year starts, to acknowledge that you had the opportunity to join. This also substantiates that your plan is non-discriminatory in the way it was offered to all the employees in your company.
