Flex Plan


The J M Smith Corporation’s benefit program offers you the opportunity to take advantage of tax savings from two flexible spending accounts. You are eligible to enroll and make changes during open enrollment with an effective date of January 1st, or when you have completed your new hire waiting period.

How Flex Plan Works

You can deposit pre-tax dollars in your:

  • Health Care Spending Account; and/or
  • Dependent Care Spending Account

Health Care Spending Account

You can deposit up to $3,200 per year in your Health Care Spending Account. You can use the tax-free money in your account to reimburse yourself for:

  • Eligible expenses not paid by your medical and dental coverage, and
  • Out-of-pocket expenses, such as deductibles and co-payments

You can find examples of eligible and ineligible expenses in the list below. For a complete list of eligible expenses, you can download the list of eligible expenses at www.irs.gov.

Medical Eligible and Non-Eligible Expenses

Eligible Expenses

  • Deductibles and co-payments not paid by other medical, dental or vision insurance
  • Hearing aids and batteries
  • Smoking cessation aides

Ineligible Expenses

  • Health care, dental care and vision care premiums that have been purchased with pre-tax dollars
  • Automobile insurance premiums
  • Custodial care in an institution
  • Elective cosmetic surgery, such as liposuction, hair transplants, electrolysis and face-lifts
  • Health club dues, YMCA dues, steam baths, etc.

Dependent Care Spending Account

You can deposit up to $5,000 (or $2,500 if you and your spouse file separate in-come tax returns) in your Dependent Care Spending Account. This account lets you set aside money to pay dependent care expenses that are necessary in order for you (and your spouse, if you’re married) to work or attend school full-time You can find examples of eligible and ineligible expenses in the list below.

Eligible Expenses

  • Home or day care for dependent children under age 13
  • Payments made to a licensed nursery day care or day care center for preschool children
  • Home or day care for dependents of any age who are mentally or physically disabled and are unable to care for themselves

Ineligible Expenses

  • Expenses for days you are not working, including sick leave or vacation days
  • Child care services provided by another of your dependent children
  • Care for dependents who have an annual income of $1,000 or more
  • Expenses you already claimed as deductions or credits on a federal or state income tax return

IRS Requirements for the Dependent Care Spending Account

Dependent care expenses will qualify for reimbursement if you meet these IRS requirements:

  • If you’re married, both you and your spouse must be working. Spouses who don’t work must be full-time students or incapable of caring for themselves.
  • If you’re married, the total annual amount you deposit can’t be more than the lower of your income or your spouse’s income.
  • If you’re single, your dependent day care expenses must be necessary for you to work. You may change your dependent care contribution during the plan year only if you have a change in family status.

NOTE: If you decide to use the Dependent Care Spending Account, you cannot use the Federal Tax Credit for the same purpose. Consult your tax professional for advice on the most tax-efficient method.

How the Accounts Work

Once you set up your account(s), you can use them to reimburse yourself during the year for any eligible expenses that you need to pay. Here’s how:

  • First, you estimate how much you’ll need to cover your expenses. The IRS rules state that if you do not incur the expenses projected, you will forfeit unused salary reduction amounts. This is the “Use It or Lose It” Rule.
  • Then, the amount you choose is deducted from each paycheck. If you decide to set aside $650 for the entire calendar year, then you’ll have to have $27.08 deducted from each paycheck.
  • When you have an eligible expense, submit a claim and an itemized receipt to the claims administrator.
  • Eligible expenses will be processed on a regular schedule. Keep in mind that you can have your reimbursements deposited directly into your bank account.
  • You’ll have a three-month grace period following the end of the year to submit claims for expenses incurred the prior year.

Over the Counter Drug Medical Expenses

Over-the-counter (OTC) drugs and medicines will be considered ineligible expenses unless you have a Note of Medical Necessity (NMN) or a prescription from your physician.
Healthcare debit cards cannot be used to purchase OTC drugs and medicines. If a healthcare debit card is used to pay for these item, the transaction will be denied at the point-of-sale. In this case, you will need to pay for the expense out-of-pocket and submit a claim, along with NMN or prescription, to be reimbursed.

See Eligible and Ineligible Expenses List for more information on this change.

Paying Directly From My Account

Many providers will accept a Benefit Access Card (like a debit card) to pay for eligible expenses. You present the card at point of sale, and the amount is deducted directly from your account.

If you already have a Benefit Access Card from the previous year, you may continue to use it. It will be linked to your current year account.

If you don’t have a card, complete the Benefit Access Card request from in the forms section, and send it directly to McGriff. There is no charge for the initial card. Replacement cards or additional cards for dependents cost $10, which is deducted from your Flex account.

Cost of Benefit

The only cost is the amount of money you elect to contribute to the plan through payroll deduction.
There are annual maximums that apply to the Reimbursement Accounts:

Medical Reimbursement – $3200 for the Plan Year
Dependent Care Reimbursement – $5000 per Plan Year (if married filing joint tax return);
$2500 per Plan Year (if married filing separate tax return)

Advantages of FLEX Plan Participation

Tax Savings

You pay no Social Security (FICA), and no federal or state income tax on dollars routed through the plan.

Immediate Savings

Tax savings are immediate (rather than coming once a year at tax time) since each paycheck reflects lower tax withholding.

Disadvantages of FLEX Plan Participation

Use It, Don’t Lose It!

If you do not file for reimbursement by March 31st, the money you set aside in your account(s) will not transfer to the next year’s account(s). Due to IRS rules, you must forfeit any funds in your spending account(s) that you haven’t used by the end of the year. It is very important for you to estimate your non-covered eligible health and dependent care expenses carefully so you don’t forfeit your contributions.

Your Social Security benefits may be reduced since you will be paying less Social Security taxes.

Checking My Balance

You can check your account 24 hours a day, 7 days a week. Just log on to the McGriff Insurance Services website and enter your User ID and PIN Number.