The pre-tax benefits offered by SEGIP can provide you with substantial tax savings by paying your health and dental plan premiums, eligible dependent day care, medical, dental, and transportation expenses with pre-tax dollars. Your taxable income-and your taxes-are reduced. Because you pay less in taxes, your net income may be greater. Many employees can save a substantial amount.
It's important to understand how pre-tax plans work so that you can take full advantage of the benefits available to you. One important rule to understand is the IRS "use it or lose it" rule. Because of the tax advantages of the pre-tax benefits, any contributions to Medical/Dental and Dependent Care pre-tax expense accounts that remain unclaimed by the end of a year will be forfeited. Be sure you fully understand this risk before you enroll in a pre-tax account.
Pre Tax Insurance Details
Benefits Overview: Overview of MMB’s Pre-Tax Benefits
Benefit Summary (PDF): tax benefits as a state employee
FAQs: Link to 121Benefits' (formerly Eide Bailly’s) Pre-Tax frequently asked questions
Benny Card Overview: MMB’s website summarizing the OneCard benefit information
Types of Pre-Tax Accounts
You must enroll each year in the Medical/Dental Expense Account, the Dependent Day Care Expense Account, and the Transit Expense Accounts during Open Enrollment. The payroll deducted premium and transit accounts roll over from one year to the next.
Health and Dental Premium
The Health & Dental Premium Account (HDPA) allows you to pay your share of health and dental premiums with pre-tax dollars. The pre-tax premium payment 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. Click here for PDF
Dependent Day Care Expense Account
The Dependent Day Care Expense Account (DCEA) allows you to pay for certain dependent care (“day care”) expenses with pre-tax dollars. You may use your DCEA to pay for the care of children under age 13 who qualify as dependents on your income tax return, disabled family members or elderly parents who live with you. You may use your DCEA to pay for care that is necessary to allow you to work. You may deposit up to $5,000 per family per year ($2,500 per spouse if you and your spouse file taxes separately). This account is for “day care” type expenses, not medical/dental expenses for your dependents. Click here for PDF
Medical/Dental Expense Account
The Medical/Dental Expense Account (MDEA) allows you to pay for certain unreimbursed medical and dental expenses with pre-tax dollars. You may use your MDEA to pay for health and dental plan deductibles, copayments, coinsurance, and certain other expenses that cannot be reimbursed from any other sources, such as another insurance plan. You may contribute up to $5,000 per year to your MDEA. If you lose your benefits eligibility, you may be eligible to continue your MDEA on an after-tax basis. Click here for PDF
Transit Expense Accounts
The Transit Expense Accounts (TEA) allows you to pay for certain costs associated with your commute to work with pre-tax dollars. The Transit Expense Account-Parking covers out of pocket parking fees. You may contribute up to the Federal maximum (see the administrator’s Web site at: eidebailly.com/benefits for current limits). The Transit Expense Account- Bus Pass/Vanpool covers out of pocket bus pass or van pool expenses. You may contribute up to the Federal maximum allowed. You may enroll at any time and you may make monthly changes. Unlike the MDEA and DCEA, funds left in your account at the end of the year may be carried forward to the next year, but you must re-enroll in the plan for the next year. Click here for PDF
Payroll Deducted Transit Account
These accounts allow you to pay for payroll-deducted parking and bus pass expenses with pre-tax dollars. If you have parking or bus pass deductions from your paycheck, you are automatically enrolled in the Payroll Deducted Account. Click here for PDF