If a hospital stay is required, additional hospital confinement benefits are paid. The plan also pays a medical fee benefit for accidental injury, even if no disability absence from work occurs. If you tax-shelter the premiums through payroll deduction for the Disability Income Plan, the IRS requires that most benefits you receive under that plan be fully taxable. If you do not want the benefits to be taxable, you can have the plan set up as a bank draft, but you forfeit the tax-sheltering of the premiums. Any taxable benefit received will be reflected on your W-2 forms.
Dependent coverage is available at reduced levels of benefits.
The person cared for must be claimed by you as a dependent on your income tax return. If you use this plan, you cannot claim the same expenses as credits on your income tax returns. For most people, tax-sheltering under this Flexible Benefits Plan will save more money than the tax credits. The back of the Choices brochure has a worksheet for comparing these savings. Any amount left in the account at the end of the plan year is forfeited.