Flexible Spending Account

Personal Choice Account (PCA) 

The City of Salem offers a Section 125 plan for IRS qualified expenses with pre-tax money. 

During the Plan year, you will have access to the pre-tax money for reimbursement of out of pocket qualified healthcare/dependent care expenses that you would normally pay for with after-tax dollars.

Annual Election

Calendar year contract so enrollment is required annually.   The full amount you choose to set aside for your Plan year must be used within the Plan year for qualified healthcare/dependent care expenses or you will lose it.  The IRS mandates that this is a use it or lose it type of account.  To reduce this risk participatns should carefully review their estimated out of pocket expenses before making the dicision to participate.

Annual Maximums

Health care spending – up to $3,000

Dependent care – up to $5,000

Eligibility / changes

The annual election amount can only be changed if you have a life event that would result in a status change ie marriage, birth, adoption or change in your or your spouse's employment status. 

Reimbursment

Complete form and attach an explanation of benefits, pharmacy or sales receipt, and any other proof of service documenation.  Claim can be mailed or faxed to PCA.  Reimbursement average turnaround time is 48-72 hours.  Reimbursement can be mailed to your home or direct deposited.

Online Services allow you access to: 

• Account balance and claim information

• Claim forms and worksheets

• Contact information

• Eligible expense list

• Frequently asked questions

Tax Consequences

Because you are not paying any social security tax on the portion of your income that has been set aside, your social security benefits may be slightly reduced.  We encourage you to contact a tax advisor for advise specific to your situation.

Forms

PCA enrollment application

PCA status change form

PCA Direct Deposit form

PCA Health Care Spending Claim Reimbursement form

PCA Dependent Care Claim Reimbursement form

Link

Website