I’ve Heard About Discrimination Tests . . . How Does This Work?
The IRS rules require that the Plan be nondiscriminatory, which means it cannot provide benefits
which favor highly-compensated or key employees. Each year, the Plan must pass tests to confirm
that no discrimination exists. Sometimes, it may be necessary to modify your election(s) downward if
you are a Key Employee or a Highly Compensated Individual (as defined by the IRS). This action
would only be taken to prevent the plan from becoming discriminatory within the meaning of the
federal income tax law.
What Happens When I Terminate?
When your employment terminates, your salary reductions terminate. You have the option to
continue Medical Reimbursement coverage under Federal COBRA coverage continuation provisions
described in your Summary Plan Description. You can continue to incur Dependent Care claims and
submit the receipts towards any unused balance after your termination date as long as you and your
spouse are working or looking for work.
Where Does My Money Go?
Contributions to your accounts don’t “go” anywhere. When contributions are made by reducing your
compensation each paycheck, they are accounted for in your personal Medical Reimbursement
Account or Dependent Care Reimbursement Account. Your salary reductions are held as a general
asset of your employer and are subject to all creditors; there is no separate trust account. The actual
money is simply retained by your employer until you submit a claim for your eligible expenses. At that
time, your employer provides reimbursement with tax-free dollars. If your Employer goes out of
business, your salary reductions may be forfeited and normal Plan guidelines for submitting claims
may change.
What Happens To Money That Is Forfeited?
Money that is forfeited under the Plan returns to the employer and is used to offset plan losses and
the cost of administering the plan.
Do I Need To Change Insurance Providers To Participate?
The VitaFlex Plan is not tied to any insurance plan or company; therefore, there is no need to change
insurance providers. You may participate in the VitaFlex Medical and Dependent Care Plans even if
you have waived coverage under your employer’s health plans because you are covered through a
spouse’s plan or other plan.
Do I Need To Be Covered Under My Employer’s Health Plan?
No. You may elect to participate in the Medical or Dependent Care Reimbursement Plan whether or
not you or your dependents are actually covered under your employer’s health plan.
What Is VitaFlex?
VitaFlex is a Flexible Spending Account (FSA) program designed to administer Medical and
Dependent Care Reimbursement plans. Your employer has retained Vita Administration Company to
administer your plan.
How Do I Contact Vita?
900 North Shoreline Boulevard
Mountain View, CA 94043
Phone: (650) 966-1492
Web: www.vitaflex.net
Fax: (650) 964-FLEX (Claims only)
E-mail: flex@vitamail.com
California Department of Insurance License #0581175
Securities offered through Liberty Group, L.L.C.
Member FINRA, SIPC, MSRB, Registered Investment Advisor
