The IRC Section 125 Plan, known as "SISC FLEX," is a benefit plan which SISC offers to member districts as a value added service at no cost to the employee or the employer. The plan began October 2002. Section 125 of the Internal Revenue Code allows employees to purchase their selected "SISC FLEX" Plan benefits with pre-tax payroll contributions. Both employees and employers participating in the plan may enjoy significant tax savings. Savings are realized by a reduction in Federal, State, Social Security, and Medicare tax contributions.

The employer's role is to deduct contributions for participating employees on a pre-tax basis. The amount deducted depends on the dollar amount elected by the participant for the plan year, in any one of the following benefit options:

1. PREMIUM ONLY PLAN (No Annual Maximum)

The plan allows pre-tax payroll deductions for amounts employees are required to contribute for their employer sponsored group health insurance. The deduction amount will automatically be adjusted to reflect any changes in the premium in future years.

2. MEDICAL FLEXIBLE SPENDING ACCOUNT ($5,000 Per Employee Annual Maximum)

The plan allows employees to redirect a portion of their salary, on a pre-tax basis, to pay for eligible unreimbursed medical expenses. Each plan year, employees elect the dollar amount to be contributed to their flexible spending account based on their estimated out-of-pocket medical expenses. Employees submit claim forms to be reimbursed for eligible medical expenses incurred during the plan year. Eligible participants in this account will receive a stored-value VisaCard to pay for current year qualifying medical expenses. Refer to the Eligile Expenses Link for examples of eligible medical expenses. The SISC Flex plan year is January 1st through December 31st each year. Participants have 90 days (run out period) following the end of the plan year to file claims for the current Plan Year. Expenses for all claims must be incurred during the current plan year or the grace period (2 1/2 months following the plan year end) associated with that plan year. While this does not eliminate the use-it-or-lose-it rule completely, participants now have more time to avoid forfeiting unused funds. All claims and supporting documentation must be received by the SISC office no later than March 31st in order to be considered filed during the run-out period. 

3. DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT ($5,000 Per Family Annual Maximum)

The plan allows employees to redirect a portion of their salary, on a pre-tax basis, to pay for employment related dependent care expenses. Each plan year, participating employees elect the amount to be contributed to their flexible spending account based on their estimated dependent care expenses. Employees submit claim forms to be reimbursed for qualifying dependent care expenses incurred during the plan year. The SISC Flex plan year is January 1st through December 31st each year. Participants have 90 days (run out period) following the end of the plan year to file claims for the current year. All claims and supporting documentation must be received by the SISC office no later than March 31st in order to be considered filed during the run-out period.  Qualifying dependents include a participating employee's tax dependents under age thirteen, as well as incapacitated tax dependents age thirteen and over, who reside with the employee.

ADDITIONAL IMPORTANT POINTS

1. To be eligible for SISC Flex you must be an active employee of a participating school district.
   
2. The SISC Flex Plan year is January 1st through December 31st each year.  Participants have 90 days (run out period) following the end of the plan year to file claims for the current year. All claims and supporting documentation must be received by the SISC office no later than March 31st in order to be considered filed during the run-out period.
   
3. Reimbursement can only be made for eligible expenses incurred during the plan year, or the 2 1/2 month grace period immediately following the plan year end. The grace period only applies to eligible medical expenses, not dependent care expenses.
   
4. Unused contributions remaining in a participant's flexible spending account after the close of the plan year must be forfeited.
   
5. A participant is prohibited from changing their elections during the plan year, except for the allowed status change events outlined in the plan document.
   
6. Funds cannot be transferred between a participant's medical and dependent care flexible spending accounts.
   
7. Participation in a Section 125 Plan may affect your future Social Security retirement; as income subject to Social Security deductions decreases, the Social Security deduction also decreases

Self-Insured Schools of California

Whether you are a single person, single parent, part of a dual-income household, or a family person with a non-working spouse, SISC FLEX will provide you with more take-home pay.

*Federal and State taxes reflect 2009 Federal Tax rates and typical state taxes.

**Does not include any available tax credit for child care expenses.