Employee Handbook

11.1 Flexible Compensation

The College offers a Flexible Compensation Program to eligible employees. Flexible compensation allows employees to choose between taxable pay and tax-free benefits as part of their total compensation. There are three components to this Program: health insurance for the employee and his/her dependent(s); a medical care reimbursement account; and a dependent care reimbursement account and a taxable cash benefit option.

Employees must make initial program elections within 30 days following their date of eligibility. During open enrollment, employees will have the opportunity to change Flexible Compensation Program elections for the following Plan Year (January 1 - December 31). If an employee wants to alter his/her election during the Plan Year, the employee must have experienced a change in family status. A change in family status is defined in the Health Insurance Enrollment Policies below. If you experience a change in family status, contact the Employment Services Department within 30 days following the change.

11.1.1 Health Insurance

The health insurance plan which includes single, single plus one, or single plus dependent(s) coverage, is available immediately to all on-going full-time employees and for on-going part-time employees classified as .50 - .74 FTE. The current provider is HealthPartners; (outline of the coverage and current monthly premiums). The College and the employee share the cost of coverage for the employee and dependents. Monthly Premium will be deducted on a pre-tax basis from the employee's regularly scheduled paychecks. Pre-tax deductions are subject to IRS regulations which restrict changes during the plan year, with exception to those caused by a change in family status, such as marriage, divorce, or employment change of the insured or their spouse.

If your employment start date is between the 1st and the 15th of the month, the premium for dependent coverage must be paid as a full month. No charge will be made if your employment date is after the 15th of the month. Your group coverage will terminate at the end of the month during which you terminate from the College, unless you are eligible for and elect continuation coverage. See Section 11.6.

Health Insurance Enrollment Policies

Full-time and part-time employees (.50 FTE or greater) and their eligible dependents may enroll in the College's health insurance program. Full-time and part-time employees are eligible as of their first day of employment. Enrollment must take place within 30 days of eligibility. Dependent insurance may be paid on a pre-tax basis under the flexible compensation program. Under I.R.S. regulations, once a pre-tax election has been made for a calendar year, during that year it may only be revoked due to a change in family status.

If employees have not enrolled within 30 days of eligibility, they may later apply for coverage as follows:

Open Enrollment

In November of each year, an employee and his/her eligible dependents may apply for coverage by completing a health insurance enrollment form. Coverage will commence on January 1st.

Change in Family Status

An employee who has had a change in family status may modify his/her insurance coverage status and flexible compensation election. This modification must be made within 30 days of the change in family status, and is effective as of the date of change. Addition or deletion of health insurance coverage may be executed by completion of the appropriate form. The employee may need to execute a new flexible compensation election form. The new election must be on account of, and consistent with, the change in family status.

Leave of Absence

Employees returning from leave of absence without pay and without benefits may re-enroll at their previous level of coverage on a pre-tax basis by completing a new flexible compensation form.

If the employee is on a Leave of Absence, they can cancel their health insurance coverage at the beginning of their leave by notifying the Employment Services Department.

A change in family status is defined as:

  1. Acquisition of a new dependent. This includes marriage, or birth/adoption of a child or change in child custody. Employees who have previously waived coverage for their spouse who wish to apply for coverage as a result of a newly acquired dependent child is eligible to apply for coverage within 30 days of acquiring a dependent child.
  2. Loss of a dependent through death or divorce.
  3. Significant change in the health insurance coverage of the employee or spouse attributable to the spouse's employment.
  4. Change from full-time to part-time employment.
  5. Leave of absence.
  6. Signing or revoking of a Declaration of Domestic Partnership.

11.1.2 Reimbursement Accounts (Medical and Dependent Care)

All full-time employees and all part-time employees who are classified as .50 - .74 FTE may choose to have pre-tax money deducted from their regular paychecks and deposited into one or both of the reimbursement accounts.

Under current IRS rules, any money deposited into a reimbursement account for which the employee does not incur an eligible expense during the Plan Year (January 1 - December 31) is forfeited. Employees who plan carefully may experience tax savings by using a reimbursement account(s).

Macalester College has outsourced the Flexible Spending Administration effective January 1, 2004. If you chose to enroll in either the dependent day care reimbursement account or health care reimbursement account, you will receive a confirmation and enrollment kit with claim procedures mailed directly to your home. Initial enrollment in the flexible spending accounts is done at your first benefit orientation with Employment Services. Any change during the plan year must be a result of and consistent with a change in family status which would also be processed through Employment Services.

Medical Reimbursement Account

Eligible employees may begin participation in this program on the first day of the month following their date of hire. Employees who choose not to participate within 30 days following their eligibility date must wait until open enrollment unless they experience a change in family status.

An eligible employee may deposit up to $2,500 per plan year (January 1 - December 31) and use the money to pay for medical costs which are not covered by health or dental insurance for themselves and/or their dependents. The total amount deposited by the employee will be deducted in equal installments from their scheduled paychecks. See http://www.irs.gov/publications/p502/ar02.html#d0e205 for examples of eligible expenses.

Dependent Care Reimbursement Account

Eligible employees may begin participation in this program on the first day of the month following their date of hire. Employees who choose not to participate within 30 days following their eligibility date must wait until open enrollment unless they experience a change in family status.

An eligible employee may deposit up to $5,000 per plan year (up to $2,500 for married participants filing separately) and use the money to be reimbursed for certain work-related dependent care (day care) expenses for either children under the age of 13 who qualify as dependents on the employee's federal income tax return or other dependents who qualify as federal tax dependents who are physically or mentally incapable of self-care, regardless of age, such as elderly parents whom the employee supports.

If the daycare facility's enrollment is more than six, the facility must be licensed in order to qualify for the dependent care reimbursement account.

11.1.3 Taxable Cash Benefit (Applies to Collective Bargaining Unit Maintenance Contract only)

If you chose to receive the taxable cash benefit the amount will be added to the employees paycheck as a taxable cash benefit.