To: All Columbus Public Schools Employees
From: Pat Hord, Benefits Manager
Date: February 24, 2004
Subject: Cafeteria 125 Enrollment

It is that time of year for open enrollment in the cafeteria 125 plan. This year’s enrollment will be from March 1 through May 31, 2004. The plan year is from July 1, 2004 - June 30, 2005.

The objective of this enrollment is to assist you in making benefit decisions. You will also receive your annual benefit statement to help you appreciate the true value of your benefits package and to understand the importance of participating in pre-tax plans.

The following programs will be offered:

•Flexible spending accounts (Unreimbursed Medical and Dependent Care)

•Supplemental Benefits Coverage:

•Cancer, Heart, Disability and Life

•Accident and Vision

•403(b) Information (tax sheltered annuities)

•457 Deferred Compensation

I encourage all employees to schedule an appointment with our Benefits Consultants if:

•You were hired after Sept. 1, 2003

•You want to participate in the Flexible Spending accounts. (Must sign each year)

•You want to make any changes to your existing supplemental coverage.

•You did not see an enroller or sign a waiver last year.

•You would like to sign up for or review your 403(b) or 457 Retirement Plan.

Thank you for your assistance in this matter.

Following are commonly asked questions about our Cafeteria 125 Plan.

This is a negotiated benefit that allows an individual to use pre-tax dollars to pay for "out of pocket" medical and or "dependent care" expenses. The bottom line, if used it will reduce your taxes and increase your spendable income.

Any out of pocket medical expenses not reimbursed by insurance companies. Examples include deductibles and co-pays, birth control pills, orthodontics, chiropractors, prescription drugs, over-the-counter medications, glasses, contact lenses, contact lens solutions, hearing aids, even laser eye surgery. It covers nearly everything except cosmetic surgery and/or devises.

That is the IRS code that governs these plans.

It is mostly used for day care type of expenses, but can also be used for other types of dependent care such as an elderly parent or disabled adult.

No, in some cases the tax credit can be better, but only if you’re making less than $20,000 per year. In all other cases using pre-tax dollars is much better.

Exactly what is says, you must use the money deducted in a twelve-month period or forfeit the unused amount. For this reason, your benefit consultant will help you accurately calculate the amount. If money is left near the end of an enrollment period, most people will use it for glasses, etc. Typically, less than 1% of the money set aside is lost by a total school district.

Part of the 125 code states that if you offer it to one employee, you must offer it to every employee. It also indicates that any employee who does not want to participate in the plan, sign a waiver.

A simple one-line form must be completed, a receipt attached and faxed or mailed. Refunded checks can be expected within one week.

Because this plan is a pre-tax benefit once you sign up for this program you are committed to it until the next open enrollment period.

No attempt was made to answer all of your questions associated with a 125 plan, but merely designed to help you make an informed decision. Your benefit consultant will be able to answer all of your questions.