Health Benefit (HBEA) & Dependent Children (DCEA) Expense Accounts

Health Benefits Expense Account (HBEA)

What It Is

The Health Benefit Expense Account is a program that allows you to set aside money, before taxes, from your paycheck to pay for health related expenses not covered by insurance. The great advantage is that you pay no federal taxes on your contributions. For example, if you put in $1000 and are in a 20% federal tax bracket you save $200 ($1000 x 20% = $200). If you or someone in your family (i.e., spouse and eligible dependents) goes to the doctor or dentist, takes medication or wears glasses, whether you have insurance or not, the Health Benefit Expense Account may save you money.

Please note: This account is subject to New Jersey State Income Tax.

How It Works

It’s very simple. Each year you may choose to contribute between $100 and $5000 into the account*. When you have an eligible expense save the receipt and mail or fax it in with the health benefits expense�account form� to get reimbursed. Direct deposit from your expense account to your checking or savings account is also available. You have until March 31, 2011, to submit claims for eligible expenses you have during the 2010 plan year, otherwise money left in your account will be forfeited.��

*Elections do not automatically carry over each year. You must make a new election through e-Benefits, our online benefits enrollment system each year to participate in the Health Benefit Expense Account program, even if you participated in 2009.��

How Much to Contribute

Contributions depend on household needs— think about how many copays you will have for physician visits or prescriptions. Will you pay a deductible? Perhaps you expect a large dental, orthodontic (e.g., braces), or vision expense (e.g., LASIK surgery). Please estimate your expenses carefully because the IRS does not allow you to roll over unused funds at the end of the year, so any money left in the account will be forfeited.�

DEPENDENT CARE EXPENSE ACCOUNT

This is not a plan to cover your dependent's health-related expenses. This is a plan to pay primarily for child care expenses of dependent children 12 years and under.

What It Is

The Dependent Care Expense Account is a program that allows you to set aside money, before taxes, from your paycheck to pay primarily for childcare expenses* of dependent children 12 years and under. The great advantage is that you pay no federal taxes on your contributions.

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For example, if you put in $1000 and are in a 20% federal tax bracket you save $200 ($1000 x 20% = $200). If you (and your spouse, if married), work full time and pay for day care, day camp or after-school programs, then the Dependent Care Expense Account may save you money.

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Please note: This account is subject to New Jersey State Income Tax.

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* In addition to childcare, the Dependent Care Expense Account can be used to pay for the dependent care expenses for any dependent living with you who is physically or mentally unable to care for him- or herself and whom you can claim as a dependent.

How�It Works

It’s very simple. Each year you may choose to contribute between $100 and $5000 ($2500 if you are married and filing separately), into the account**. When you have an eligible expense save the receipt and mail or fax it in with the dependent case expense account form to get reimbursed. Direct deposit from your expense account to your checking or savings account is also available.�You have until March 31, 2011 to submit claims for eligible expenses you have during the 2010 plan year, otherwise any money left in your account is forfeited.�

Please note that if you claim the dependent care tax credit it will be reduced, dollar for dollar, by the amount you contribute to the Dependent Care Expense Account. Also, depending on your household income it might be advantageous to claim childcare expenses on your federal income tax return. You cannot claim the expenses on your tax return and use the Dependent Care Expense Account. Please ask your tax adviser which plan is best for you.

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** Elections do not automatically carry over each year. You must make a new election through e-Benefits, our online benefits enrollment system each year to participate in the Dependent Care Expense Account program, even if you participated in 2009.��

How Much to Contribute

Contributions depend on household needs— think about how much you spend on childcare every year. Will you use day care or a private nanny? Perhaps your child is going to nursery school or day camp this year.� Please estimate your expenses carefully because the IRS does not allow you to roll over unused funds at the end of the year, so any money left in the account will be forfeited.

Expense Account Worksheet�

Use the online worksheet to calculate your expenses and savings for the 2010 plan year, January 1-December 31.

If you have any questions, call the Benefits Team for assistance at 258-3302 or email us at benefits@princeton.edu.

While the University intends to continue each of the benefit plans, the University reserves the right to terminate or amend any plan, at any time, and for any reason