FLEXIBLE SPENDING ACCOUNTS

Group Dynamic, Inc. administers Colby's Flexible Spending Accounts (FSA's). FSA's provide employees the opportunity to make pre-tax contributions to an account in their name, from which reimbursements are made for DEPENDENT CARE EXPENSES  and eligible MEDICAL EXPENSES (such as co-payments, deductibles, dental, and eye expenses).

FSA's require an irrevocable election for each Plan Year and contributions to FSA's are not subject to payroll or income taxes. The amount of your election is then withheld in equal amounts from your paychecks throughout the year. Claim forms are submitted for reimbursement of expenses incurred during the Plan Year in which contributions are made. Expenses are considered incurred on the date services are rendered, regardless of when you actually pay for them. Dependent care expenses will be reimbursed only up to the amount contributed at the time the form for reimbursement is submitted.

Changes in the election for the Dependent Care Assistance Account may be made only because of and consistent with a "status change event". Elections for the Medical Reimbursement Account may not be changed during the Plan Year.

Employee account balances remaining 90 days after the end of the year will be forfeited.

Q. Is it true that over-the-counter medications are now eligible for reimbursement?

A. Yes, new guidance on flexible spending accounts includes costs for over-the-counter medications as eligible expenses under Medical Flexible Spending Accounts

Q. How do I determine how much money to contribute (have withheld from my paycheck)?

 A. You need to carefully estimate what you anticipate you will spend on eligible medical care and/or dependent care expenses during the year, including any applicable deductibles and copayments.  Allow only those expenses you are reasonably sure you will incur.  If you overestimate and do not use the full amount during the Plan Year, you lose it.

Explanations and forms to help you determine how much to contribute are provided in the enrollment packet.  Please refer to the Tax Savings Chart and FSA Budget Worksheet.

Q. Must I submit an election form even if I choose not to participate in the reimbursement account program?

 A. You should submit the electronic election form with your elections.

Q. If I elect to participate in the plan, when will the first contribution (payroll withholding) be made from my payroll check?

 A. The first withholding will be made from the first payroll check you receive in January 2006.

Q. May I submit expenses incurred prior to January 1, 2006 for reimbursement?

 A. You may not submit expenses incurred prior to January 1, 2006. Only expenses incurred on or after January 1, 2006 are eligible for reimbursement during this plan year.

Q. What happens if I retire, terminate, or take a leave without pay?

A. A medical care claim incurred after your retirement date or termination date are not eligible for reimbursement. You may submit claims incurred before your retirement or termination date. For the period you are on leave without pay, you may submit claims incurred before you went on leave and after, if you re-enter the plan. You are eligible to receive COBRA for the medical reimbursement on an after tax basis. Your dependent care account balance may be used throughout the end of the Colby plan year.

Q. Will my Social Security Benefits be affected by the reduced W-2 reported income?

 A. Since your Social Security Benefits are determined primarily by your top thirty-five years' average earnings the reduction in reported income will only negligibly impact the determination of benefits.

Q. When will reimbursement checks be written and distributed?

 A. Reimbursement checks will be written and released on Thursday of each week.

Q. When must my request for reimbursement be received in order to be included in the next scheduled check run?

 A. Your reimbursement request must be received by Group Dynamic, Inc. no later than noon on Tuesday to be included in the following Thursday's check run.

Q. How do I submit a request for reimbursement?

 A. You must complete a Reimbursement Request Form (including signature & date) and attach an itemized receipt showing the date of service, porvider of service, patient name, description of service and the amount of the service.

You may submit your claims in the following ways:

By fax to GDI: 207-781-3841
By mail to GDI: 411 US Route One, Falmouth, Maine 04105
By e-mail: claims@gdynamic.com (You will need to scan your signed claim form and itemized receipts.)

Included with your contact information welcome kit will be a reimbursement request form and GDI envelope. Each time you submit a reimbursement request a new form and envelope will be provided with your reimbursement check.

Q. How can I get my reimbursement check deposited directly into my personal bank account?

 A. You must fill out and mail or fax to GDI the direct deposit authorization form.

Q. How long does it take for my reimbursement to be deposited using direct deposit?

 A. Deposits will be made within 2 days of the check run date.

Q. Why must I sign and submit a Reimbursement Request Form each time I want to be reimbursed?

 A. Federal regulations for section 125/129 plans require third party substantiation that an expense has been incurred.  Additionally, your signature on each form confirms that you are not receiving reimbursement for those expenses from any other source.

Q. Is there a minimum reimbursement amount?

 A. No

Q. If I am out on Family Medical Leave, what will happen to my reimbursement account(s)?

 A. GDI staff works closely with the Personnel Office to handle these cases. Generally, deductions are not made while you are on FMLA leave so claims incurred during that period are not  eligible for reimbursement.  However, you may submit claims incurred and paid before you went on leave and after, if you re-enter the plan.

Q. Where will my reimbursement check be sent?

 A. Your reimbursement check will be sent to the address which you provide when enrolling in the plan. If you have a name or address change, please notify GDI by calling toll free 1-800-626-3539.

Q. How long after the end of the plan year do I have to submit expenses for reimbursement?

 A. You may submit requests for reimbursement 90 days following the end of the plan year. This plan year you will have until March 31, 2006 to submit claims incurred between January 1, 2005 and December 31, 2005.

You will have until March 31, 2007 to submit claims incurred between January 1, 2006 and February 28, 2007.

We welcome your questions. Please feel free to call the Personnel Office (ext.5503) or GDI toll-free at 1-800-626-3539, if you have further questions.