Something for employees to consider this year during Open Enrollment is a Health Care Spending Account.

This option can make higher deductibles a little easier to cope with. You will be putting money in your own pocket by participating in this tax savings plan. Money contributed to your account is not considered as wages; therefore it is not subject to income, wage or FICA taxes. Your tax advantaged funds can be used to pay for your eligible expenses.

You will be sent a SHPS Spending Account Visa card before the beginning of the new year. The SHPS visa card simplifies the process of paying for expenses directly from your spending account. There is no need to pay out-of-pocket and wait for a reimbursement check. Just use your card and the funds are automatically deducted from your spending account.

You can use your card at locations where you typically receive health care goods and services. Examples include: Physicians’ offices, Hospitals, Pharmacies, Vision centers, and Dentists. Does you child need braces this year? Think of the huge tax break!

You can use this account for yourself and all qualified dependants or relatives. A qualified dependant would be the same as what your Qwest health care provides for. A qualified relative would be eligible if you provide more than half of the individual’s support and is not a qualifying child of you or any other tax payer.

The reimbursement limitations are $5000 per year if single or married and filing joint tax returns; or $2500 per year if married and filing separate returns.

An important note; save all of your receipts and EOB’s! The IRS requires SHPS to validate that all card transactions are used for eligible expenses. SHPS will send along with your card a receipt saving envelope to help you file and manage your receipts.

A simple example of a use for this account would be to authorize your deduction amount to be the same as your yearly deductible, say $400. This amount would be deducted from your pay bi-monthly for the entire year at approximately $17 per pay. You can start using any or this entire amount after January 1st of the new year.

You do need to plan carefully when deciding how much to contribute. Because of the tax benefits, IRS guidelines prevent SHPS from returning an unused amount in your spending account. Within the calendar year you must use it, or lose it.

Other spending accounts that are also available to you are Commuter Accounts and Dependant Care Accounts.

Please check out the website at: www.myshps.com for more information as well as look at the MANY healthcare expenses that are considered eligible.