A Guide To Your Flexible Spending Account

Transcription

1 A Guide To Your Flexible Spending Account Healthcare Spending Account Dependent Care Spending Account

2 FLEXIBLE SPENDING ACCOUNTS Make the most of your money. What if you could make your income stretch further? A Flexible Spending Account (FSA) can help you to do just that. A Flexible Spending Account is an employee benefit program that allows you to set aside money, on a pre-tax basis, to help you offset the cost of medical and dependent care expenses. Enrolling in an FSA is like giving yourself a raise because you set money aside for eligible expenses before your employer deducts taxes from your paycheck. This means the amount of income your taxes are based on will be lower, and as a result, your tax liability will also be lower. Flexible Spending Accounts (FSA) provide an option to help you cover qualified healthcare expenses and/or costs associated with caring for a child or elderly dependent while you are at work. There are three types of FSAs; Healthcare Flexible Spending Account: reimburses you for eligible expenses not paid by a medical plan. What s covered? See page 9 of this booklet for a list of common items. The full list can be found by logging in at Additional information can also be found at Dependent Care Flexible Spending Account: reimburses you for daycare expenses incurred for eligible children under age 13 and/or adults who routinely spend at least 8 hours per day in your home and are unable to care for themselves. Limited Purpose, Post-Deductible Flexible Spending Account (LFSA): is similar to a regular healthcare FSA but is used if you are also enrolled in a high deductible health plan (HDHP) with a Health Savings Account (HSA). Federal regulations for HDHPs and HSAs require that until you meet your deductible, the LFSA can only be used to cover dental and vision costs. Once your deductible is met, you can use your LFSA for reimbursement for all eligible medical expenses. The maximum contribution for the Medical FSA for 2015 is $2500 per employee. The 2015 maximum for the Dependent Care FSA is $5000 per family, or $2500 per employee if married filing separately. FSA...a valuable benefit FSAs are a valuable part of the benefits package provided by your employer. They allow you to set money aside each year for eligible healthcare and dependent care expenses BEFORE your taxes are deducted from your paycheck. That means you pay less tax. These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 2

3 Healthcare Flexible Spending Account How Can a Healthcare Flexible Spending Account save you money? Money that you contribute to a Healthcare FSA is deducted from your paycheck before taxes are calculated. That means that you give money to yourself and you don t get taxed on it! It also means that your paycheck isn t reduced by the full amount you pledged to contribute. For example, say you elected to put $100 in your FSA every payday. Since that deduction comes first, and then your taxes are calculated, your paycheck won t be $100 lower! Because everybody s tax situation is different, it s impossible to say what the lower amount will be, but it will not be the full amount of your FSA pledge. Your tax advisor would be able to give you specifics. An example of how you can have more money available to pay for eligible healthcare expenses: Without an FSA $ Monthly budget for medical care expenses Taxes on the $ taken from your paycheck $ Amount left for out-of-pocket medical care expenses With an FSA $ Monthly FSA deposit for medical care expenses No taxes (FSA contributions are never taxed) $ Amount left for out-of-pocket medical care expenses How Much Can You Save? The Healthcare FSA (Healthcare Spending Account), regulated by the IRS, lets you pay for eligible healthcare expenses with pre-tax dollars. In other words, the money you deposit into your FSA will never be taxed stretching the purchasing power of every dollar you set aside in an FSA. Take the Value of FSA Quiz! Q. Which of the following may be eligible healthcare expenses through your Flexible Spending Account? Braces and orthopedics Eye Care *Eye drops *Saline solution Diabetes Management *Insulin *Syringes *Blood Glucose test kits Bandages and dressings *Antiseptic liquid and ointment *Bandages A: All of the above, and many other healthcare expenses through your Flexible Spending Account 3

4 How do you know how much money to contribute to your FSA? One of the most important rules surrounding FSAs is use-it-or-lose-it. Money left in your account at the end of the year cannot be rolled over to the next plan year. Expenses incurred during the Grace Period may be paid or reimbursed from benefits or contributions remaining unused at the end of the immediately preceding Plan Year only. The Grace Period only applies if there are unused funds remaining at the end of the Plan Year. So it is important to plan carefully FSA Calculator: Logon to: Enter your company name, Click on Forms, Click on FSA Calculator. when deciding how much you want to contribute. An FSA calculator is located in this booklet, and also on the HealthSCOPE Benefits website to help you estimate how much money to set aside and how much money you may save on taxes. Remember, you can only contribute up to $2500. It s true that healthcare expenses often come up without warning. Accidents happen that result in injuries and there is no way to predict when something like that will happen. However, there are some things we can do to calculate what we might need to cover out-of-pocket for healthcare expenses in the upcoming year. Here are some ideas for where to start: Look at last year s medical expenses. Do you, or any of your covered dependents, take prescriptions medications on an on-going basis? Do you have a condition that requires regular trips to your healthcare provider? What about dental or vision costs? Consider putting aside money to cover things like orthodontia and contact lenses or eye glasses. Consider any medical expense that you anticipate for this year that you may not have had last year. Things like pregnancy or surgery that you, or any of your covered dependents, might be anticipating. Take a look at the list included in this booklet as well as IRS Publication 502 (found on to see if there are any expenses that might apply to you. Included in this booklet on page 8 is a worksheet to help you calculate how much you should elect in your healthcare and/or dependent care FSA. How can you pay claims with your Healthcare FSA? There are a couple of ways to pay claims with your FSA dollars: Use your Flex Benefits Card. When you enroll in a Healthcare FSA, you will automatically receive a Flex Benefit Card. The Flex Benefit Card is an easy way to pay for qualified expenses directly from your FSA account. Here are a few examples of how it works: *If your provider requests payment at the time of service, just give them your Flex Benefit Card for payment like you would a personal credit card. *If you receive a bill from your provider for your portion after the claim has been processed, there is usually a place on the invoice for you to enter a credit card account for payment. Simply enter your Flex Benefit Card information and return it to your provider. If there is not an option to enter payment information on the invoice, call your provider and ask if they accept credit cards. They will probably be able to take your information over the phone to settle your account. *If you are purchasing prescription medications, provide your Flex Benefit Card to the pharmacy for payment. If you pay for the purchase out-of-pocket rather than using the Flex Benefit Card at the time of your purchase, you can submit a request for reimbursement to get paid back from your FSA. All you need to do is fill out a claim form and submit it along with the receipt. You can submit your claim via paper or These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 4

5 Things you need to know about the use of your Flex Benefits Card. In most ways, your card works just like any debit card. When you receive your Flex Benefit Card, please read the Cardholder Agreement and sign the back of your card to indicate that you understand and accept the terms of the agreement. Use the card to pay for eligible products and services. Be sure to keep all of your receipts, as you will likely be asked to provide them to verify the eligibility of your purchases. There are three limitations on your Flex Benefit Card that you need to know about: 1. Use of the Flex Benefit Cards is limited to specific merchants based on the type of FSA you have selected and the expenses deemed eligible by your plan. For example, if you accidentally used the card at a sporting goods or clothing store, the purchase would be declined because those merchants do not provide qualified benefits or services. The Flex Benefit Card system is programmed to include merchants like healthcare providers and pharmacies. 2. You cannot use it at an ATM terminal, or to obtain cash back when making a purchase. 3. You are not given a PIN number with this card. Should a merchant or provider ask you for PIN number, just explain that this particular card does not have one; it should be submitted like a credit card purchase. When given the option between debit and credit at the terminal, choose credit. TIP: Your Flex Benefit Card is good for up to three years. So hang on to it! Even if you use up this year s funds, you will be able to use the card again next year if you re-enroll. Eligible healthcare expenses You may be able to use your card to pay for products and services such as these: Co-pays (including doctor, dentist, and pharmacy) Prescription drugs and medical supplies Diabetic supplies Eye glasses and contact lenses Orthodontic services See page 9 of this booklet for a partial list of eligible expenses. You can find the complete list by logging onto Don t forget: if you are enrolled in a high deductible health plan, you can only use your healthcare FSA for dental and vision expenses until you meet your deductible! Ineligible healthcare expenses There is a list of common ineligible items included in this booklet and generally applies to anything that is not listed in your plan document(s). Please keep in mind that you are responsible for how the funds in your account are spent; these tax-exempt accounts are governed by the IRS and your plan documents. If you are ever in doubt about the eligibility of a particular produce or service, contact HealthSCOPE Benefits. Once in while, a card holder will accidently use his or her card for a non-eligible item, and occasionally the transaction will go through. It may happen to you somewhere down the road. If it does, contact HealthSCOPE Benefits as soon as you become aware of the mistake. Your representative will tell you how to reimburse your account for the ineligible item. 5

6 Flex Benefit Card overdrafts In most cases, the transaction will simply be denied. You will have to pay for the product or service yourself and submit the receipt, along with a claim form. You will then be reimbursed for any eligible expenses with whatever is left in your account. Be sure to save your receipts! For some expenses, additional information may be needed, including receipts, to verify eligibility of the expense and to comply with IRS rules. That is why it is important for you to save all these receipts, and fax or mail them promptly when asked for them. If you do not comply, we will be forced to declare those expenses ineligible and you will have to reimburse your account. If you fail to do so, you could jeopardize the tax-exempt status of your account and lose access to your Flex Benefit Card. TIP: To protect your account s tax-exempt status and comply with IRS rules, you may sometimes have to provide your receipts. These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 6

7 Dependent Care Flexible Spending Account How you can save money with a Dependent Care Flexible Spending Account. With the cost of child and elder care rising, managing quality care for loved ones can be a daunting task. A dependent care FSA allows you put aside a portion of your earnings into a special reimbursement account, on a pre-tax basis. Because the money goes into your dependent care account before Federal Income or Social Security taxes are withheld, you pay less in taxes. During the year, you use these funds to reimburse yourself for dependent care expenses. Who qualifies as an eligible dependent for a Dependent Care FSA? Dependent children under the age thirteen who are claimed as dependents on your tax return, and your spouse or other adult dependent, such as a parent, who is physically or mentally incapable of self-care and for which you maintain a household. What types of dependent care expenses can be reimbursed? Here are some examples of eligible dependent care expenses: Payments to nursery schools and daycare centers Before and after school care Summer day camp (but not overnight camp) for children up to age 13 Costs for elder daycare can only be reimbursed if the dependent regularly spends at least eight hours per day in your home. Payments made to an individual or to a relative who cares for your dependents are also eligible, provided that this relative is not a person who you claim as a dependent. How much can I deposit into a Dependent Care FSA? The IRS limits the amount of a tax-free reimbursement to $5000 for couples filing jointly or individuals who are single and head of household. If you are married filing separately, you can each set aside $2,500. How can I pay for dependent care with my Flex Benefit card? There are a couple of different ways: You can use the convenient Flex Benefit Card. When you enroll in a Dependent Care FSA, you will automatically receive a Flex Benefit Card. The Flex Benefit Card provides the most convenient way to access your Dependent Care FSA contribution. The Flex Benefit Card is a special VISA that draws from your Dependent Care account. If the provider you use accepts VISA, you can swipe your Flex Benefit Card for reimbursement. Remember, you must have funds in your Dependent Care account in order to use the Flex Benefit Card. If you prefer, you can pay your dependent care expenses up front and request reimbursement from your Dependent Care FSA. Just complete the claim form and send it in with a receipt to receive reimbursement, or go online and submit your claim via our website at Can I still claim the Dependent Care Tax Credit? You cannot use the Dependent Care FSA and the Federal dependent care tax credit for the same expenses. You will need to determine which approach would be most advantageous. Lower income families may be better off claiming the child-care credit than using an FSA, but it s best to check with a Certified Public Accountant. 7

8 Flexible Spending Account Worksheet and Eligible Expenses Guide Estimating Your Healthcare Expenses The planning worksheet below can help you estimate your eligible healthcare expenses that may not be covered under your company s group insurance plan. Remember, all eligible healthcare expenses for you, your spouse and your eligible dependents are reimbursable from your Healthcare FSA. Medical Expenses Estimated Plan Year Expenses Vision Expenses Copays $ Contact Lens supplies $ Deductibles $ Copays $ Lab Fees $ Deductibles $ Physical Exams $ Eye Exams $ Physician fees $ Prescription eyeglasses or sunglasses $ Prescription drug expenses $ Other medical expenses $ Dental Expenses Other Expenses Copays $ Acupuncture or chiropractic $ Deductibles $ Hearing aids $ Dentures $ Immunizations fees $ Examinations $ Psychiatrist, psychologist counseling* $ Orthodontia $ Medically Required Equipment $ Restorative work $ Emergency Room Charges $ Teeth Cleaning $ Other eligible expenses $ Other dental expenses $ TOTAL Column 1 $ TOTAL COLUMN 2 $ Estimated Plan Year Expenses Total Column 1 $ + Total Column 2 $ = TOTAL ESTIMATED EXPENSES *Allowed for treatment of physical or mental disorder (e.g. depression, alcohol or drug treatment). A diagnosis is necessary for reimbursement. Examples of costs your healthcare FSA may cover: Copays, deductibles, and out-of-pocket costs. Acupuncture as a treatment. Certain alcoholism and drug addiction treatment costs. Artificial teeth or dentures. Braille books for visually impaired. Certain residential improvements to accommodate the disabled. Eye examinations, contact lenses (including cleaning and maintenance supplies and eyeglasses). Guide dogs for sign or hearing impaired persons. Car controls for disabled drivers. Hypnosis to treat illness. Lead-based paint removal. Learning disability tuition/therapy. Psychological or psychiatric care. Nursing home expenses. Certain medical transportation. Important Note! Reimbursement for certain services listed above is subject to specific requirements. Call the IRS toll free at , or visit to obtain a copy. Special Rules for Orthodontic Care Orthodontic expenses are reimbursed after the service is provided, not when the expense is paid. The total cost for braces cannot be reimbursed at the time the appliance is installed, even if it has been paid in full. Reimbursements are allowed according to the monthly fee stated in the contract or service agreement drawn between the Orthodontist and patient. Initial down payments are also reimbursed according to the contract. If treatment is provided with a contract or service agreement, or if the total cost of the braces is paid upfront, reimbursements will be apportioned by dividing the total cost by the number of office visits required to complete the treatment. The Orthodontist must provide written documentation of the apportioned amounts. Initial requests for reimbursements should include a copy of the orthodontic care contract. These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 8

9 FLEXIBLE SPENDING ACCOUNT... Eligible and Ineligible Healthcare Expenses IRS regulations govern the eligibility of expenses, which include those that are not fully covered by a healthcare plan and are prescribed by a physician or other licensed professional primarily for preventing, treating or mitigating a physical defect or illness. A partial list of eligible expenses is provided below. Acupuncture Alcoholism or drug dependency treatment centers Ambulance Artificial limbs and teeth Birth control pills and devices Braille books and magazines Childbirth preparation classes for mother, excluding portion for mother s coach Contact lenses and contact lens solutions Dental treatment (non-cosmetic), including dentures, and orthodontia (braces and retainers) Eye Examination Eye laser surgery Prescription eyewear Guide dog and its upkeep Fees to doctors, hospitals, etc. for: Anesthesiologist Chiropodists Chiropractor Clinic Dentist Dermatologist Gynecologist Midwife Neurologist Obstetrician Ophthalmologist Optometrist Osteopath, licensed Pediatrician Podiatrist Practical Nurse Psychiatrist Psychologist (medical care only) Sex therapist Surgeon Hearing aids/batteries Home modifications to accommodate handicapped person Most hospital services Insulin, syringes Laboratory fees Lip-reading lessons Lodging for medical care Medical supplies (prescribed) Mental institution care, mentally ill person unsafe when alone Mentally retarded, special home for Nurses expenses and board Nursing care Obstetrical expenses Operation and related treatments Organ donation, organ transplants Orthopedic shoes, excess of costs over normal shoes Over-the-counter expenses Oxygen equipment Radial keratotomy Rental of medical equipment prescribed by doctor Smoking cessation programs Special schooling for physically or mentally handicapped family Speech therapy Sterilization, legal Telephone for the deaf Television closed caption decoder equipment that displays the audio part of the TV programs for the deaf Therapy received as medical treatment Transplant, medical expenses of donor/prospective donor Transportation expenses for essential medical care (mileage varies yearly) Tuition at special school for the handicapped Vaccinations Vasectomy Visual alert system for deaf person Wheelchair X-rays Examples of Ineligible Healthcare Expenses Any illegal treatment Cosmetic surgery, electrolysis, teeth bleaching, and hair transplant that is not medically necessary Cost of illegal drugs, even if physician directed Cost of remedial reading classes for nonhandicapped child Dancing or ballet, even when recommended by doctor Diaper service Fees for exercise, athletic, or health club memberships Funeral expenses Marriage counseling Maternity clothes Non-prescription sunglasses Vitamins, unless recommended by a physician as treatment for a specific, diagnosed medical condition Parenting classes Spousal or personal insurance premium Swimming lessons 9

10 FLEXIBLE SPENDING ACCOUNT...Healthcare Expenses: Over-the-Counter Items This List is Subject to Change as the federal government releases new guidance under healthcare reform These items can be submitted for FSA Reimbursement without a prescription These items will require a prescription to be eligible for FSA reimbursement ANTISEPTICS Benzocaine swabs Boric acid powder First aid wipes Hydrogen Peroxide Iodine tincture Rubbing Alcohol Sublimed Sulfur powder DIABETES Diabetic lancets Diabetic supplies Diabetic test strips Glucose meters EAR/EYE CARE Airplane ear protection Ear water-drying aid Earwax removal drops Homeopathic earache tabs Contact lens solution HEALTH AIDS Antifungal treatments Bandages Crutches Denture adhesives Incontinence supplies Lice control Moisturizers (KY, Replens type products) Pedialyte type products Respiratory stimulant ammonia PERSONAL TEST KITS Blood pressure monitor Cholesterol tests Colorectal cancer screening tests Home drug screening tests Ovulation indicators Pregnancy tests Thermometers Upset stomach medications REQUIRES A PRESCRIPTION* Asthma medications Cold, Flu & Allergy Over-the-Counter medications Eye drops Minerals Multi-vitamins Over-the-Counter medications Pain relievers Saline nose drops Skin Care Products Acne treatments Anti-itch lotion Bunion and blister treatments Corn/callus removal medications Diaper rash ointment Eczema cream Medicated bath products Medicated powder Wart removal medications Stomach care Special supplements Vitamins REQUIRES A LETTER OF MEDICAL NECESSITY Ear plugs Cold or hot compresses Foot products (arch support, cushion) Foot spa Gauze and tape Herbs Gloves and masks Leg or arm braces Massagers Special teeth cleaning system *Over-the-counter Medications will not be Eligible for Flexible Spending Account Reimbursement unless you have a prescription. These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 10

11 Accessing your Flexible Spending Account online To access your Flexible Spending Account online: 1. Log on to 2. Select Member. 3. Enter your company name, Click Enter. 4. Select Flexible Spending Account Status link. 5. Enter your Username and Password on the Secure Login Screen 6. From this screen you can: File an FSA claim Check your account balances Check claim history Check your Flex Benefit Card transactions Update your profile Get plan descriptions and other documentation Retrieve downloadable forms Submit a Customer Care inquiry These materials were created to help you understand the benefits available to you. This is not a Summary Plan Description and is not intended to replace the benefit summary of schedule of benefits contained within the Plan. If any provision of these materials is inconsistent with the language of the Plan, the language of the Plan will govern. HealthSCOPE Benefits is not an insurer or guarantor of benefits under the Plan. 11

12 FLEXIBLE SPENDING ACCOUNT PAPER CLAIM FILING INSTRUCTIONS 1. Please complete the Medical/Dental/Vision and Dependent Care FSA Reimbursement form in full, sign and date it, and attach copies of all receipts, invoices, or Explanation of Benefit (EOB) statements. Documentation must clearly indicate: * Date services incurred or supplies purchased * Name and address of the provider of services or supplies * Social Security or Tax ID number of the provider of daycare services * Name of the person receiving the service or supplies * Type of expense * Amount of expense * Total amount paid by any healthcare plan 2. If the company s benefit plan did not or will not reimburse you for ANY portion of an expense that you are submitting, please mark across the top of the invoice or receipt, NOT PAID BY HEALTHCARE PLAN and initial it. 3. DO NOT SEND CANCELLED CHECKS OR STATEMENTS THAT ONLY INDICATE BALANCE DUE. THESE DO NOT SUPPLY THE REQUIRED INFORMATION. 4. Claims submitted without the necessary information will be returned to the claimant and will cause significant delay in processing reimbursement checks. 5. For daycare claims, submit receipt or copy of cancelled check from daycare provider showing that you have paid for the care. Include dates of service, social security or tax ID number of the caregiver. This must be included on every claim. 6. KEEP COPIES OF SUPPORT DOCUMENTION FOR YOUR RECORDS. WE WILL NOT RETURN WHAT HAS BEEN SUBMITTED. 7. Submit the Reimbursement Request to: HealthSCOPE Benefits, Inc. Attn: Flexible Spending Department Fax: OR HealthSCOPE Benefits, Inc. Attn: Flexible Spending Department P. O. Box 350 Little Rock, AR

13 HEALTHCARE REIMBURSEMENT REQUEST FORM (Please Print Legibly) EMPLOYEE INFORMATION NAME: SSN #: DAY TIME PHONE #: CHECK HERE IF NEW ADDRESS ADDRESS: EMPLOYER NAME: ADDRESS: CITY: STATE: ZIP: REIMBURSABLE EXPENSES (Attach documentation) DATE INCURRED PROVIDER OF SERVICE PERSON FOR WHOM SERVICE PROVIDED REIMBURSEMENT AMOUNT REQUESTED $ $ $ $ $ $ $ TOTAL $ CERTIFICATION I certify the following is true: The expenses listed above were incurred by me and/or my eligible dependents and qualify for reimbursement. (See Claim filing instructions worksheet is available on the website noted below). The expenses listed above are not eligible for reimbursement by any other healthcare plan. I have not and will not deduct the above listed expenses on my Federal Income Tax returns. The appropriate bills, receipts, or Explanation of Benefits are attached. Employee Signature (REQUIRED): Any person who knowingly and with intent to defraud or deceive any healthcare plan, files a statement of claim containing any materially false, incomplete or misleading information is guilty of a crime. Date: 13

14 FLEXIBLE SPENDING ACCOUNT DIRECT DEPOSIT AUTHORIZATION FORM Please complete and sign for convenient Automatic Deposit Option with notifications. Please note that an address is required to enroll in Automatic Deposit. Employer Name: Employee Name: Social Security #: Address: City, State, Zip: SIGNATURE: address: Attach a voided check or a copy of a voided check and complete the information below. Please check closely for accuracy. Bank Routing Number (9 digits) Bank Account Number Complete, Sign and Return to: HealthSCOPE Benefits P. O. Box 350 Little Rock, AR

15 27 Corporate Hill Drive; Little Rock, AR 72205