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LCABARRUS COUN J <br /> NO~H CIM~INA <br /> <br />MEMORANDUM <br /> <br />To: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Frank W. Clifton, Jr., County Manager <br /> <br />Blair Bennett, Deputy County Manager <br /> <br />May 12, 1999 <br /> <br />Medical Reimbursement Plan <br /> <br />Cabarrus County has been offering a Medical Reimbursement Plan to County employees <br />for several years. This type of plan allows employees to make pretax deductions from <br />their payroll checks for eligible expenses; such as, copays at doctors' offices, eyeglasses <br />and surgery, dentist and other qualified medical expenses. This particular plan qualified <br />as a Section 125 Cafeteria Plan under IRS regulations. We have allowed employees to <br />pretax up to $2000 for this type plan in past years. Once an employee makes an annual <br />commitment to pretax a certain amount for these type expenses, he must use it or lose it, <br />according to the [RS. <br /> <br />In a review of the past three years, Cabarrus County employees had $550 in unclaimed <br />benefits, which reverted to the County. The County also saves the FICA match on the <br />total amount tax deferred by the employees. For 1998, those savings amounted to $1644. <br />The only liability associated with this plan that could occur, would happen if an <br />employee separated service with the County and had qualifying expenses that remained <br />reimbursable. As you noticed from the above three-year's history, this is limited. <br /> <br />We are therefore recommending raising the threshold from $2000 to $4000 for the Fiscal <br />Year 2000. I will be available at the Board of Commissioners meeting, should questions <br />arise. <br /> <br />Finance Department <br /> <br /> <br />