Pretax Benefits

Getting the most from your paycheck—that is the idea behind the State’s Flexible Benefits Plan and Transit Expense Plan. 

• These plans allow you to pay for the employee-paid portions of your health and dental premiums for SEGIP plans, as well as certain medical, dental, dependent care (daycare) and transit out-of-pocket expenses, with money that is sheltered from taxes by deducting the funds from your pay before it is taxed.
  
• Since less of your pay is taxed, you should come out ahead at the end of the year.
• Participation in the pretax benefits program has no effect on future state retirement pension benefits. Your retirement and disability benefits are figured based on your gross salary, not your reduced taxable salary. However, your Social Security benefits may be slightly reduced because you’re paying less in Social Security (FICA) taxes.
• Certain rules and guidelines apply to each benefit, so be sure you fully understand the programs before you choose to participate. 

The MDEA allows you to pay for certain qualified medical and dental expenses for you, your spouse, and eligible dependents with pre-tax dollars.

• Examples of expenses reimbursed by the MDEA include health and dental plan deductibles and co-insurance.
• The minimum election is $100 and the 2024 maximum is $3,200 per plan year.
• You must make an annual election during Open Enrollment if you want to participate for the following plan year.
• The MDEA cannot be used for premiums.  The Minnesota Advantage Health Plan and Dental premiums are automatically deducted pretaxed through the Health/Dental Premium Account (HDPA).
• If you, your spouse, or eligible dependent participates in a Health Savings Account (HSA), there are MDEA limitations. To avoid tax implications on the HSA contributions, the MDEA must be changed to a Limited Purpose MDEA prior to the start of the new tax year.  Contact Benefit Resource (BRI) for more information.
• The State’s plan allows unused MDEA funds, up to the federal allowed amount, to carryover into the next plan year if you have made all of your current plan year contributions AND made a new MDEA election during Open Enrollment for the following plan year. Unused funds in excess of the federal carryover amount that are not submitted timely for reimbursement are forfeited.
• Carefully plan your election, as your election cannot be changed unless you experience a qualified life event.

The DCEA allows you to pay for certain dependent care (day care) expenses for eligible dependents with pretax dollars.

• DCEA funds are for daycare expenses incurred while you are working or looking for work. This account is not for your dependent’s medical expenses.
• DCEA funds are only eligible for qualified children up to age 13 or adult day care for your qualified disabled spouse or other disabled dependent. 
  • DCEA funds may only be used for the time period eligible dependents are residing in your home.
• The minimum election is $100 and the maximum is $5,000 per household. Special rules may apply depending upon your tax filing status. Consult your tax advisor to avoid tax implications. You must make an annual election during Open Enrollment if you want to participate for the following plan year.
• Funds are available for reimbursement after they are deducted from your paycheck and contributed to your account.
• This account is a “use or lose” account, meaning unused funds are forfeited.
• Carefully plan your election, as your election cannot be changed unless you experience a qualified life event.

The Transit Expense Accounts allow you to pay for certain costs associated with your work-related commute with pretax dollars.

• The Transit Expense Account - Parking (PKEA) covers your out-of-pocket work-related parking fees. 
• The Transit Expense Account – Bus pass/Vanpool (BVEA) covers your out-of-pocket bus pass, light rail, or vanpool expenses. 
• If you are enrolled in your agency-provided payroll deducted parking and transit option, do not enroll in a PKEA or BVEA unless you have additional out-of-pocket work-related parking or transit expenses. 
• Choose your election each year.
• The minimum election is $50 per plan year.
• Currently, the maximum monthly reimbursement is $300 equaling $3,600 annually.
• Elections can be changed throughout the year on a going forward basis but cannot be decreased to less than $50.
• The State’s plan allows a rollover to the following year of the unreimbursed balance provided you elect at least the $50 plan minimum for the new plan year.  This new election must occur prior to the start of the new plan year.  If this election is not made prior to the start of the new plan year, any unused funds are forfeited.
• Transit Expense Account expenses for both parking and vanpool must be submitted within 180 days of the date of service or date of payment, but not later than the plan year filing deadline.

Parking Expense Account (PKEA)

• The PKEA can be used for your work-related bike or vehicle parking.  Expenses already paid by pretax deductions are not eligible for reimbursement under this account.
• Funds are available for reimbursement after they are deducted from your paycheck and contributed to your account.
• Money contributed to the PKEA can only be used for qualified parking expenses not for bus or vanpool expenses.
• Reimbursement requests must be made within 180 days of the date of service or date of payment, but not later than the plan year filing deadline.

Bus Pass/Vanpool Expense Account (BVEA)

• The BVEA can be used for your work-related mass transit or vanpool expenses.
• Expenses already paid by pretax deductions are not eligible for reimbursement under this account.
• Funds are available for reimbursement after they are deducted from your paycheck and contributed to your account.
• Money contributed to the BVEA can only be used for qualified bus, light rail, and vanpool expenses and not for parking expenses. 

The PDA allows you to pay for payroll-deducted parking and bus pass expenses with pre-tax dollars. The PDA is administered by your agency, not Benefit Resource (BRI).   

• If you have parking or bus pass deductions from your paycheck, and payments are administered through your agency, you are already in enrolled in the PDA (and unless you have any additional work-related out-of-pocket parking or transit expenses, you would not enroll in a Transit Expense Account).

The HDPA allows you to pay your share of Minnesota Advantage Health Plan and State Dental Plan premiums with pretax dollars.

• This account saves you money because your contributions for health and dental insurance are subtracted from your salary before federal, state and Social Security taxes are deducted.
• You are automatically enrolled in this account when you sign up for insurance and all enrollment arrangements are made by your employer. 
• No forms are necessary to complete unless you choose to waive this benefit and pay your premiums on a post-tax basis.

You can:

• Use your pretax debit card for payment
• Submit reimbursement request on the Benefit Resource (BRI) website
  
• Use the Benefit Resource (BRI) mobile app from your smartphone
• Complete and submit a paper reimbursement form to Benefit Resource (BRI)
  

• Actual date of service
• Description of services
• Patient portion of the charges (such as the insurance provider’s Explanation of Benefits)
• If documentation is not provided when requested, the transactions may be included on your W2 form as taxable income

You can:

• Submit reimbursement requests on the Benefit Resource (BRI) website
  
• Use the Benefit Resource (BRI) mobile app from your smartphone
• Complete and submit a paper reimbursement form to Benefit Resource (BRI)

• Actual dates of service
• Expenses claimed
• Description of services
• Dependent’s name
• The name and tax ID of your dependent’s care provider

You can:

• Submit reimbursement requests on the Benefit Resource (BRI) website
  
• Use the Benefit Resource (BRI) mobile app from your smartphone
• Complete and submit a paper reimbursement form to Benefit Resource (BRI)

Using your BVEA to purchase bus and light rail passes

• The pretax debit card is the only way to access funds to purchase bus and light rail fares and passes. No other reimbursement method is available.  
• Debit card purchases for bus and light rail fares and passes do not need follow up documentation.

Using your BVEA for vanpool reimbursement

• The pretax debit card can be used for vanpool expenses only at qualified merchants.
  
• Complete and submit a paper reimbursement form to Benefit Resource (BRI)

• A receipt from the parking facility or your vanpool driver that includes:
  • Payment date
  • Service description
  • The charge for the service
• The vanpool driver’s signature on the form is also accepted instead of a vanpool receipt.