A partial list of items that qualify for this type of payment includes: Doctor co-pays; Drug Co-pays; Dental Co-pays or other dental expenses not covered in our dental plan; Vision Co-pays or additional cost for eye care not covered under the national plan; and Over the counter medications, such as cold medicine, decongestant medicine, aspirin, Tylenol or their generic brands.
At the Union Pacific Railroad, Southern Region General Chairman Gil Gore is a staunch supporter of the program. He encourages all BLET members to sign up.
“I have a personal experience with the medical portion of the FSA,” Brother Gore said. “The program has helped tremendously with braces and other major dental work for my children not covered by our health insurance.”
Brother Gore gave braces and orthodontist work as an example. He said the FSA could really help BLET members who have children save money.
“If you have some major dental work scheduled (such as braces for your kids) up to $3,600 of that expense can be paid with pretax dollars,” he said. “If you are in a 25%–33 % tax bracket, that amounts to as much as a $1,200 reduction in the federal taxes that you pay.
“We planned ahead to have our children’s dental work done at the proper time to get maximum benefit from the plan,” he said.
In much the same way that a 401k program allows individuals to use pre-tax dollars to save for retirement, the Railroad Employees Flexible Benefits Program allows members to use pre-tax dollars to pay for certain medical expenses or dependent care expenses. The current 2008 plan allows members to save anywhere from $120 to $5,000 per year for dependent care expenses, or $120 to $3,600 per year for medical expenses. It is expected the dollar amounts will change under the upcoming 2009 plan year.
Just like 401k contributions are automatically deducted from your paycheck, membership contributions to the Flexible Spending Account are withheld from your paycheck. Your contributions to the plan are spread out over 12 monthly payments (in other words, if you elect the 2008 maximum of $3,600, then you would place $300 per month into your Flexible Spending Account). If you elected the 2008 minimum of $120, then you would have $10 per month deducted from your pay and placed into your Flexible Spending Account. You can receive payment from the account when you present a bill via a claim form. You must furnish receipts to be reimbursed for the expense.
“It also allows you to pay for all of your co-payments on doctor visits and for prescription medicine,” Brother Gore said.
Additionally, some over the counter medications can be paid for using the Flexible Spending Account. United HealthCare has provided a list of medications that it will reimburse under the Flexible Spending Account:
http://www.ble-t.org/pr/pdf/OTCMedFSA.pdf
The plan also has a “use it or lose it” provision. For example, if you sign up for $2,000 in flex spending deductions and only have expenses equal to $1,900, then you would only be able to collect $1,900 of the $2,000 you put into your account. But if you were in a 33% tax bracket, that would still net you $533 in savings for the year ($633 tax savings minus the $100 left in the account = $533 net savings).
“While I know the ‘use it or lose it’ function of the plan can be scary, you can easily meet the minimum deduction of $120 for the year just on over the counter medications, which would yield you a net savings of $40 for the year if you were in a 33% tax bracket,” Brother Gore said. “My wife and I have put the maximum in her flex spending account for the last eight years and been able to provide receipts to receive a total refund every year.
“Our over the counter medicine for our family in the year 2006 came to $217. If you are on maintenance medications this program can put real dollars into your pocket allowing you to pay your co-pays with pretax dollars.”
Side Letter 8 of the 2007 BLET National Agreement stipulates that the BLET must reach at least 5% participation by the year 2009 in order to retain this benefit. This is a big reason why the BLET is strongly encouraging its members to participate in the Flexible Spending Account program.
“This is a benefit that will put real dollars into your pockets and I encourage you all to enroll at an amount you are comfortable with to see how the plan works,” Gore said.
Enrollment opportunity for the Flexible Spending Account (FSA) should arrive in your mailbox soon from United HealthCare.
Tuesday, September 16, 2008
bentley@ble.org
http://www.ble.org/pr/news/newsflash.asp?id=4693
1997-2008 Brotherhood of Locomotive Engineers and Trainmen
http://www.ble.org
Wednesday, September 17, 2008
Flexible Spending Account will provide real savings
