Dependent Care Reimbursement Account
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A Dependent Care Reimbursement Account allows you to set aside part of your salary each pay period on a pre-tax basis to reimburse eligible expenses incurred for the care of your child, disabled spouse, elderly parent, or other dependent who is physically or mentally incapable of self-care, so that you (and your spouse) can work or actively look for work.
A Flexible Reimbursement Account may save you more in taxes than the Child Care Tax Credit, but it depends on your income. If you expect your adjusted gross family income to exceed $24,000 and you are not in the 15% tax bracket, the Dependent Care Flexible Reimbursement Account (FRA) will generally benefit you more, but consult with your personal tax advisor.
Your Dependent Care FRA may be used to reimburse eligible dependent care expenses incurred during the plan year for qualifying individuals. See pages 10 and 11 of the Flexible Benefits Sourcebook.
Expenses for child and elder care cost that allow you and your spouse to work or actively look for work are eligible for reimbursement.
Because spending accounts offer tax advantages, the IRS places certain restrictions on these accounts.
Each employee eligible for the State Health Benefits Program may participate in the Dependent Care Reimbursement Account.
For plan year maximum and minimum annual deposits to a Dependent Care FRA, see Minimum and Maximum Contributions.
New employees who wish to participate in a Dependent Care FRA must enroll within 31 days of the date they were hired. Elections received within the 31-day election period will be effective the first of the following month. If you do not enroll during this initial eligibility period, you must wait until the next Open Enrollment or until you experience a qualifying mid-year event that would allow enrollment into a Medical Reimbursement Account.
Important: Each year you must re-enroll in the account, even if you wish your total annual contribution for the new plan year to remain the same.
To enroll or make changes, complete the Flexible Reimbursement Account Election Form , the FRA section of the Health Benefits Enrollment Form for Active Employees, or use EmployeeDirect, the Commonwealth's health benefits enrollment system.
If the enrollment is done via Employee Direct, your changes will be confirmed in one of two ways. EmployeeDirect either approves your request right away with a link to your updated Health Benefits Profile, or it tells you and your Benefits Administrator that your request needs additional review. Before updating your Health Benefits Profile, your Benefits Administrator could ask you for supporting documents.
Fringe Benefits Management Company sends each employee a confirmation letter for elections and changes. You should review the letter to verify the type and amount of the election(s) and any applicable changes.
After you enroll, you will receive reimbursement request forms to use when submitting expenses for reimbursement. You may submit a form anytime you incur reimbursable expenses during the plan year and up to three months after the end of the plan year.
For Dependent Care Reimbursement Accounts, you will be reimbursed for the amount of the qualifying expenses claimed up to the balance in your account at the time of reimbursement. If you submit a claim for more than your account balance, you will automatically receive additional reimbursement each time your account is credited with pre-taxed deposits until your claim is paid or you have reached your total plan year election.
Each Dependent Care FRA reimbursement request must include a properly completed FRA Reimbursement Request Form and receipts showing the date your dependent received the care, not the date you paid for the service. In addition, you must also provide one of the following:
Be certain you can obtain the above information before you enroll in a Dependent Care FRA. This information is required with each request for reimbursement. Please note that if you elect to participate in the Dependent Care FRA or if you file for the childcare tax credit, you must attach IRS Form 2441,which reflects the above information, to your IRS Form 1040 income tax return. Failure to do this could result in the IRS not allowing your pre-tax exclusion.
Reimbursement checks for the account are generated on a daily basis. If you prefer, you may have your claim reimbursement checks sent to your bank account by direct deposit. You will have to submit a completed Direct Deposit application to the FBMC office. The Direct Deposit form can be found on this web site under Publications and Forms or obtained by calling the FBMCs claim office at 1-800-342- 8017.