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Effective January 1, 2008
KanElect is offered by the State of Kansas for the benefit of its employees and is an Internal Revenue Code (IRS) Section 125 plan. It allows the employee to pay for group health insurance, unreimbursed health care expenses, and dependent day care expenses with pretax dollars. An employee can save 25-40% in taxes on that portion of their salary that is used for these qualifying expenses.
Payment on a pretax basis means that the employee enters into an agreement with the State of Kansas to reduce their salary by the cost of group health insurance coverage or by the amounts elected for either of the flexible spending accounts. Since the employee’s salary has been reduced, the employee does not pay federal or state income taxes or social security taxes on these amounts. As a result, the employee’s take home pay will increase by the amount they don’t pay in taxes for the pretax benefits selected.
An active employee who is eligible to participate in the State of Kansas Group Health Insurance program is eligible to participate in the KanElect program. An employee may participate in the spending accounts even if they don’t enroll in group health insurance.
Current employees may elect coverage during open enrollment each year (October). New employees may participate in KanElect the first day of the month following 60 days from their date of employment.
Because KanElect is an IRS Section 125 plan, there are some restrictions imposed by the IRS regarding changes in coverage election during the year. A participating employee cannot change their group health insurance coverage level or the amount of money being placed in the spending accounts until the beginning of the next plan year unless they experience a qualifying mid-year status change.
All changes must be requested within 31 calendar days of the mid year status change and must also include written documentation of the event. In addition, the requested change must be consistent with the event.
If an employee enrolls in group health insurance coverage through the State of Kansas, they may elect to participate in the Pretax Premium Option. The pretax election must be indicated on the employee’s Group Health Insurance Enrollment Form. Participation reduces the amount of tax withheld from the employee’s pay and increases their take-home pay.
The health care flexible spending account can be used to pay for eligible medical, vision, prescription drugs, and dental expenses which are not reimbursed by health insurance plans. Additionally, over-the-counter medicines and drugs purchased to treat an existing medical condition may be qualifying expenses.
The employee determines how much they want to set aside for health care expenses during the calendar year. The employee then makes a semi-monthly election on the KanElect enrollment form and that amount will be reduced from their salary on a pretax basis. As the employee has health care expenses, they request reimbursement from the account by filing claims. The employee will receive reimbursement of their eligible expenses by check or by direct deposit into their own checking or savings account. The money which is reimbursed has not been and will not be taxed.
An employee may not transfer money from one spending account into another spending account. Money from the health care account cannot be used to pay for dependent day care expenses, and money from the dependent care account cannot be used to pay for health care expenses.
To participate in the health care flexible spending account, the employee must complete a KanElect enrollment form. The minimum and maximum amounts per pay period are:
| Minimum | Maximum | |
|---|---|---|
| 12-month employee | $ 8.00 | $145.00 |
| 9-month employee | $12.00 | $217.50 |
12-month employees will have deductions taken from 24 paychecks in a calendar year.
9-month employees will have deductions taken from the first 8 paychecks in the spring and the last 8 paychecks in the fall each calendar year.
Accounts end at the end of the month in which termination occurs.
NOTE: Monies left in the health care flexible spending account at the end of the calendar year are forfeited if claims for services did not occur during the same calendar year. If an employee ends their employment with the State of Kansas or stops making deposits when they have a change in family status, they have until April 15 following the end of the plan year to file claims which were incurred up to the end of the month of their termination of employment or family status change.
The dependent care flexible spending account can be used to pay for an employee’s eligible work-related dependent care (day care) expenses.
The employee determines how much they will spend on dependent care during the calendar year. These expenses must be employment-related, and are the amounts the employee will spend in order for the employee and their spouse, if the employee is married, to be employed outside the home. The employee then makes a semi-monthly election on the KanElect enrollment form and that amount will be reduced from their salary on a pretax basis. As the employee has dependent care expenses, they request reimbursement from the account by filing claims. The employee will receive reimbursement of their eligible expenses by check or direct deposit. The money which is reimbursed has not and will not be taxed.
The employee may not transfer money from one KanElect spending account into the other. Money from the dependent care account cannot be used to pay for health care expenses, and money from the health care account cannot be used to pay for dependent care expenses.
To participate in the dependent care account, the employee must complete a KanElect enrollment form. The minimum and maximum amounts per biweekly pay period are:
| Minimum | Maximum | |
|---|---|---|
| 12-month employee | $16.00 | $208.33 |
| 9-month employee | $24.00 | $312.50 |
12-month employees will have deductions taken from 24 paychecks each calendar year.
9-month employees will have deductions taken from the first 8 paychecks in the spring and the last 8 paychecks in the fall each calendar year.
If the employee and their spouse are both State of Kansas employees and eligible for the KanElect dependent care flexible spending account, they may not deposit more than the defined maximum deduction per year between the two paychecks combined.
Accounts end at the end of the month in which termination occurs.
NOTE: Monies left in the dependent care flexible spending account at the end of the calendar year are forfeited if claims for services did not occur during the same calendar year. If an employee ends their employment with the State of Kansas or stops making deposits when they have a change if family status, they have until April 15 following the end of the plan year to file claims which were incurred up to the end of the month of their termination of employment or family status change.
The employee is responsible for reviewing the deduction on their paycheck Statement of Earnings as of the effective date of participation. If the amounts on the enrollment form and on the paycheck Statement of Earnings do not agree, the employee is to contact the Division of Human Resources within 14 days of the paycheck date to make corrections. If corrections are not requested within 14 days, changes will not be considered.
This information is simply a summary of a more detailed benefit plan. It is not all-inclusive. For more information:
