SPENDING ACCOUNTS
Employees have the opportunity to enroll in a number of savings accounts to pay for eligible expenses.
HEALTH REIMBURSEMENT ARRANGEMENT (HRA)
Modern Group, Ltd. provides employees enrolled in one of the three Aetna medical plans the opportunity to participate in a Health Reimbursement Arrangement (HRA) through The Harrison Group. Since the funds are pre-tax, every dollar you contribute earns you more in tax savings.
HRA funds can be used to pay all eligible medical and prescription expenses, including deductible and coinsurance amounts, for the plan year June 1, 2023 — July 31, 2024. However, HRA funds may only be used on in-network expenses. You cannot contribute to the HRA and you cannot roll over any unused amounts remaining in the HRA at the end of the plan year. You may utilize your HRA funds with your Harrison Group Debit Card.
MODERN GROUP HRA CONTRIBUTION
Modern will fund the Health Reimbursement Arrangement depending on the Aetna medical plan and enrollment tier elected.
FLEXIBLE SPENDING ACCOUNTS (FSAs)
Modern understands the value of your dollar and most importantly, how to stretch it. As part of the benefits package, we offer Flexible Spending Accounts (FSA) to help you stretch your dollars. FSAs allow you to set aside funds on a pre-tax basis that you can then use for qualified expenses.
HEALTH CARE FSA
A Health Care FSA is a pre-tax benefit account used to pay for eligible medical, dental, and vision care expenses. It’s a smart, simple way to save money while keeping you and your family healthy and protected.
When you make an election, this contribution is automatically withheld from your paycheck, so it does not count as income for certain tax purposes. You can elect up to the maximum of $3,050 for the plan year. These funds are available to you at the beginning of the plan year.
FSA's do have a 'Use it or Lose it Rule' - however, Modern Group employees may carry over $610 into the next plan year.
You can use your FSA for:
- Prescriptions
- Over-the-counter medicine
- Glasses, contacts, and LASIK
- Dental services and procedures
- Copays and deductibles
- Flu shots
You can also use your FSA funds to purchase eligible items online through the FSA Store:
DEPENDENT CARE FSA
A dependent care FSA is a pre-tax benefit account used to pay for eligible dependent care expenses for your children under the age of 13 or qualified elderly dependents. If you are married, your spouse must also be working, activley looking for work, be a full-time student or disabled. Like the health care FSA, when you make an election, this contribution is automatically withheld from your paycheck, so it does not count as income for certain tax purposes. You can elect up to the maximum of $5,000 for the plan year. These funds are available as they are contributed via payroll contributions.
DCFSA's do have a 'Use it or Lose it Rule' and, however unlike the health care FSA, there is no rollover feature
You can use your DCFSA for:
- Licensed nursery schools
- Qualified childcare centers
- Adult day care facilities
- After school programs
- Summer camps for dependent children under age 13
- Preschool tuition
The IRS allows you to claim work-related dependent care expenses as a credit on your annual tax return. You can use a Dependent Care FSA and claim the tax credit, as long as you do not claim the same expenses for both. A rule of thumb is that if you earn less than $39,000 annually, it is more beneficial to forgo the Dependent Care FSA and take the full dependent care credit on your income tax credit. Please consult your tax advisor to determine what scenario may make sense for you.
COMMUTER & TRANSIT SPENDING ACCOUNT
An employee may establish a spending account to reimburse predictable expenses incurred for out-of-pocket commuter and transit expenses. Once you determine your annual predictable expenses for the period of time covered by the Plan Year, a portion of that amount may be paid for with pre-tax pay. The elected pre-tax pay amount is then deposited on a per pay basis to the spending account. The maximum pretax deferral allowed for 2023 is $300 per month for the Commuter and Transit Spending Account.
You can use your Commuter Transit Spending Account for transportation costs associated with a commuter highway vehicle for travel between an employee’s residence and place of employment, and transit passes, tokens, or fare cards.
