Health Care Flexible Spending Account Dependent Care Flexible Spending Account. Enrollment Information Guide

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1 Health Care Flexible Spending Account Dependent Care Flexible Spending Account Enrollment Information Guide

2 Flexible Spending Accounts (FSA) Benefits There are many benefits available to you by participating in a ADP Flexible Spending Account program. By taking advantage of the ADP FlexDirect Flexible Spending Accounts offered by your employer, you can: Reduce the cost of qualified Health Care or Dependent Care expenses by using pre-tax dollars Reduce your taxable income Pay for health care and dependent care expenses with pre-tax dollars and have more money to spend on other things you want or need Pay for the expenses directly at the point of sale with your ADP FlexDirect FSA Card and eliminate the hassle of claim forms and waiting for reimbursements.

3 Health Care Spending Account The Health Care Spending Account is a great way to pay for eligible health care expenses that are not reimbursed through your health care plan. Under IRS regulations, eligible expenses include: Annual medical and dental plan deductibles, co-payments and co-insurances Medical and dental expenses not reimbursed by any other plan Un-reimbursed orthodontic expenses (upon completion of work) Eyeglasses, contacts (and solutions), LASIK surgery and eye exams Prescription medications Over the Counter non-prescription medicines. Examples include pain relievers, antacids, allergy medicines and cold medicines. (In order to be reimbursable under a health FSA, OTC drugs and medicines must be purchased to alleviate or treat personal injuries or sickness not merely for benefiting one s general health.) The ADP FlexDirect FSA Card can be used at almost any eligible health care provider; including doctor s and dentist s offices, pharmacies, hospitals and vision care locations. Simply pay for your eligible health care expenses by using the card at the time of purchase. The limit on the card will be your annual elected amount for health care. If a service provider does not accept the cards, you can always submit a claim for reimbursement.

4 Dependent Care Spending Account A Dependent Care Spending Account reimburses you for care provided to dependents so that you (and your spouse, if you are married) can work. Care can be for: Your dependent child or children age 12 and under, and Any dependent of any age if he or she lives with you and cannot care for himself or herself, such as an elderly parent or disabled child. Eligible Dependent Care expenses include: Day care provided in your home Day care provided outside your home, including: qualified day care providers, day camp, before and after school programs and elder day care facilities. The ADP FlexDirect FSA Card can be used at any eligible dependent or elder care provider including day care and elder care providers. The limit on the card will be the balance in your dependent care account at the time you pay for the service. If a service provider does not accept the card, you can always submit a claim for reimbursement.

5 Transaction Processing and Reimbursement You can now pay for your health care and/or dependent care expenses by using an ADP FlexDirect FSA Card. It works just like a MasterCard credit card. The card makes payments directly from your FSA account(s) so you don t need to pay cash for services up front. It also eliminates the waiting period for reimbursement checks and the hassle of filling out claims forms. Reimbursement Amounts For Health Care FSA expenses and claims, you may be reimbursed up to your annual elected limit, less any previous payments already made during the year. For Dependent Care FSA expenses and claims, you will be reimbursed up to the amount actually in your account at the time your request is received just like a savings account! Deadlines for Filing Claims After the plan year ends, there is a grace period in which you can submit claims for expenses incurred during the previous plan year. Keep in mind that any money remaining in your account(s) at the end of the plan year will be forfeited. Save Your Receipts!! The IRS requires documentation of your expenses, so you may be asked to submit a receipt after you pay. Failure to submit receipts may result in your expense being deemed ineligible, requiring you to repay the amount to the Plan. If you are not able to or do not want to use your ADP FlexDirect FSA Card, you may submit a paper claim form. Just complete a Flexible Spending Account claim form (please remember to sign the form!), attach your proof of expense and mail or fax it ADP

6 Tax Saving Example Gross Salary Health & Dependent Care Expenses Paid Through FSAs Taxable Salary Taxes (30%) Health & Dependent Care Expenses NOT Paid Through FSAs Take-home Pay With FSAs $35,000 $4,000 $31,000 $9, $21,700 Without FSAs $35, $35,000 $10,500 $4,000 $20,500 Tax Savings $1,200

7 Tax Savings Calculator To calculate your tax savings and spendable income increase, please visit and click on Savings Calculator. From the selection listed to the left of the screen, simply choose the plan type you are interested in. This feature will ask you a series of questions in order to calculate your potential savings by participating in a Flexible Spending Account Plan.

8 Frequently Asked Questions What is a Flexible Spending Account (FSA)? A Flexible Spending Account is an employer-sponsored benefit that allows you to pay for certain approved Health Care and/or Dependent Care expenses with pre-tax income for a plan year. How do I know how much money to contribute to my FSA? You should review your last year s out of pocket Health Care and/or Dependent Care and use the worksheet at to determine how much you should contribute. Can I change my election amount? You cannot change your election amount during the plan year unless you have a qualified change in status (marriage, divorce, widowed, birth of a child or adoption of a child). What if I don t use all of my election by the end of the plan year? You will forfeit any unused funds at the end of the plan year. Be careful when coming up with your election amount and log on to often to check you r balance and to ensure you are spending your entire election amount. What if I have my husband's/wife s health/dental insurance, can I still participate in the health Care FSA? Yes. Can I use my FSA for my child in college? Yes, as long as you are claiming your child as a dependent on your taxes. If I make an election for dependent care expenses, can I continue to deduct my dependent care expenses from my tax return? No. You must determine which method provides you with better savings, the tax deduction or the FSA, and select one. What is the ADP FlexDirect FSA Card? The ADP FlexDirect Card is similar to a MasterCard credit card. With this card, you can pay for your qualified health care and dependent care expenses. The ADP FlexDirect Card offers point of service reimbursement for your eligible expenses and eliminates the need for submitting reimbursement requests. You may still be required to provide receipts and other required substantiation for your purchases. ADP will contact you if documentation is needed to verify your transactions. Please make sure you save all of your receipts. How will the ADP FlexDirect Card work if I have both a Health Care FSA and a Dependent Care FSA? You will simply present your card to a qualified merchant that also accepts MasterCard as a form of payment. When the merchant processes your transactions, ADP will determine which account to use based on the type of merchant that is processing the transaction. Can I use my card to pay for over-the-counter medicines that my doctor suggested I take? Generally, over-the-counter drugs and medicines purchased to alleviate or treat personal injuries or sickness are reimbursable under the health FSA assuming your plan allows it. Specific examples of allowable OTC drugs and medicines include antacids, allergy medicines, pain relievers and cold medicines. Remember, expenses incurred to benefit one s general health are not reimbursable. For example, amounts paid for dietary supplements, such as vitamins, that are merely beneficial to general health are not reimbursable under a health FSA. Also, toiletries (e.g., toothpaste), cosmetics (e.g. face creams), sundry items, and items used for cosmetic purposes (e.g., Propecia, Rogaine) remain ineligible for reimbursement. What if I go to a discount store or supermarket to buy my prescriptions and get my eye exams? How will you know what I m buying?: Our system is set up to record any transactions that do not correspond to your health plan co-pays. Therefore, you may be asked to submit a receipts/claim form after you make the purchase so we can substantiate your claim. Be sure to save your receipts! We ll let you know if we need them. How does the ADP FlexDirect Card know if an expense qualifies for reimbursement? Each provider that accepts MasterCard is assigned a Merchant Code. The ADP FlexDirect Card is only accepted at merchants that process qualified transactions.

9 Frequently Asked Questions Will transactions be denied if there is not enough money in the account? Yes, your transaction will be denied if you attempt to purchase items or services that exceed your annual limit for Health Care expenses or your available balance in your Dependent Care account. What will be the ADP FlexDirect Card spending limit? At the beginning of the plan year, your annual elected amount will be available in your Health Care FSA. Each time you use your ADP FlexDirect Card, the transaction will be deducted from your annual elected amount. The balance in your dependent care FSA will be increased each time your payroll deduction is processed. You will be able to spend up to the amount currently in your Dependent Care Account at the time of purchase. What will happen if the expenses exceed the amount available in your account? If the amount in your account is not enough to cover your entire purchase, you will need to either split the transaction (ask the merchant to process only the amount available) or pay for the expense using some other method and then submit a reimbursement claim to ADP. What if the provider does not accept MasterCard? If your provider does not accept MasterCard as a form of payment, you will need to submit a reimbursement claim to ADP. What if the card is lost or stolen? If your card is lost or stolen, please contact ADP immediately at Your card account will be closed and a new card will be sent to you. What will happen to the ADP FlexDirect Card when employment or plan participation terminates? Your card will automatically be deactivated if you terminate participation in the plan. You may be asked to turn in your card at this time. Need More Information? If you need more information about Flexible Spending Accounts, please contact your Human Resources Representative or your tax advisor. You can also refer to the ADP FlexDirect website at

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