Flexible Spending Account (FSA)

Transcription

1 Flexible Spending Account (FSA) ENROLLMENT GUIDE Offering you more choices for managing your healthcare dollars 1

2 ConnectYourCare & Consumer-Directed Healthcare Congratulations you may now begin taking advantage of Consumer-Directed Healthcare! Your employer has chosen to offer a Flexible Spending Account (FSA) from ConnectYourCare as part of your organization s benefits package. Who is ConnectYourCare? ConnectYourCare has been selected to administer your company s Consumer-Directed Healthcare (CDH) account. ConnectYourCare was founded to advance consumers choice, convenience and control over healthcare. ConnectYourCare provides a healthcare payment card, giving you a convenient way to pay for qualified medical expenses. We also provide a member website, called the CDH Portal, where you can manage your account and access a wealth of health information, including care and disease guides, a medical encyclopedia and hospital and prescription comparison tools. What is Consumer-Directed Healthcare? Consumer-Directed Healthcare (CDH) is a new way of looking at health insurance. It was created to provide consumers with better access to reliable health information, improved resources for making healthcare decisions and more control over their healthcare dollars. Society teaches us to be savvy consumers. Researching products before buying has become an automatic step for the majority of our purchases. Our involvement in healthcare decisions, however, remains among the lowest of all our consumer purchases. With CDH, you become more engaged in your healthcare decisions and have access to tools that can help you make smart spending choices. How is Consumer-Directed Healthcare different from traditional healthcare? CDH provides you with greater control over your healthcare expenses through healthcare savings accounts, such as a Flexible Spending Account (FSA). These accounts let you choose how to spend your healthcare dollars. How can a CDH account help me and my family? You will have more control over how your healthcare dollars are spent, a better understanding of healthcare costs, and access to reliable health education tools that enable you to make better healthcare decisions. 2

3 Flexible Spending Account Overview What is a Flexible Spending Account (FSA)? A Flexible Spending Account is a tax-advantaged account that allows you to use pre-tax dollars to pay for out-of-pocket qualified medical or dependent care expenses. You choose how much money you want to contribute to an FSA at the beginning of each plan year and can access these funds throughout the year. Account Advantages Tax advantages. Under an FSA, you can reduce your taxable income by the amount you contribute to your FSA. You can then use these pre-tax dollars to pay for expenses that would have otherwise been paid with after-tax dollars. In addition, you do not pay social security tax on the income reduction. Easy to access. Funds in the account are easily accessed with the ConnectYourCare healthcare payment card. Your account balance is available at any time online or over the phone. Multiple uses. There are hundreds of eligible healthcare expenses for your FSA funds, including prescriptions, over-thecounter medications, doctor office co-pays, health insurance deductibles and coinsurance. FSA funds may be used for any eligible healthcare expense not covered by insurance or any other plan for yourself, your spouse or tax dependents. See the list of Eligible Expenses in this guide for more details. Rapid Reimbursements: Reimbursements are easy through our healthcare payment card. Using the card for a qualified purchase automatically creates a claim in your online account in our Consumer-Directed Healthcare (CDH) Portal. If you did not use your card, you can follow four easy steps to create your claim online and submit your receipts. Even if you pay for an expense using your healthcare payment card, you may still need to submit receipts for that purchase. The CDH Portal will post a notice in your account when receipts are needed. Or you can send your reimbursement requests and receipts through the mail if you do not have access to a computer. Save money on taxes Use pre-tax money for qualified healthcare or dependent care expenses Better manage out-ofpocket healthcare expenses Fund Availability Rules and Regulations The IRS requires that employers make the full annual FSA election available to employees when a reimbursable expense occurs, regardless of whether you have deposited enough to cover the full amount at that point in time. For example, you may designate $1,200 per year, equal to a payroll deduction of $100 a month. You are eligible for reimbursement up to the full $1,200 in the first month, even though you have only deposited $100 in your account. You must use all your funds by the end of your plan year. At the end of each plan year, IRS rules require that you forfeit any money deposited in an FSA account that has not been spent. These remaining funds revert back to your employer to cover the plan s administrative fees. Use the FSA calculator in this guide to estimate your expenses. 3

4 Dependent Care Assistance Program Overview Dependent and Elder Care Assistance Program FSA (DCAP) You may also choose to enroll in a Dependent Care Assistance Program FSA (DCAP), which covers employment-related dependent and elder care expenses and is an alternative to the Dependent Care Tax Credit. If you work and have children, a disabled spouse, or dependent parents, you know how important it is to have reliable and affordable care for them while you are at work. A DCAP allows you to pay for these expenses and get a tax break at the same time. Expenses must be for dependents that are claimed as an exemption on your federal tax return. Typical expenses under this account include charges for day care, nursery school and elder care (unless it is for medical care) for your legal dependents. See the list of Eligible Expenses included in this guide for more details. Eligibility Requirements To be reimbursed through your DCAP for child and dependent care expenses, you must meet the following conditions: You must have incurred the expenses in order for you and your spouse, if married, to work or look for work, unless your spouse was either a full-time student or was physically or mentally incapable of self-care. You cannot have made the care payments to someone you can claim as your dependent on your federal tax return or to your child who is under age 19. Your filing status must be single, qualifying widow(er) with a dependent child, married filing jointly, or married filing separately. You and your spouse must maintain a home that you live in for more than half the year with the qualifying child or dependent. Fund Availability Rules and Regulations Unlike the FSA, you may only receive reimbursement from your DCAP account equal to the amount you have actually deposited. You must use all your funds by the end of your plan year. At the end of each plan year, IRS rules require that you forfeit any money deposited in a DCAP account that are not spent. These remaining funds revert back to your employer to cover the plan s administrative fees. Use the FSA calculator on page 10 to estimate your expenses. 4

5 Flexible Spending Account FAQs How much can I contribute to my FSA? There is no statutory limit on the amount of money you or your employer can contribute to an FSA, however, at the beginning of the plan year, your employer must define either a maximum dollar amount or maximum percentage of compensation that can be contributed to your health FSA. Please see your plan documents or consult with your Human Resources office for more information. For a Dependent Care FSA, you may not contribute more than $5,000 according to IRS regulations. How will I be able to access my FSA funds? You will receive a healthcare payment card from ConnectYourCare to access your FSA funds. You can also pay for eligible expenses with any other form of payment and request reimbursement from your account. When can I request reimbursement from my FSA? You have access to the account when your plan becomes effective. What happens if I use the account for a non-eligible expense? If you file a manual request for reimbursement, the request will be denied. If you used your ConnectYour- Care healthcare payment card and the expense is deemed ineligible, you will be required to reimburse your account for that transaction. How can I find out my account balance and review transactions? ConnectYourCare Account Balance and Claims Status information is available 24 hours a day, 7 days a week: Log on to the Consumer-Directed Healthcare (CDH) Portal at and visit My Account for online account balance information. Call for automated balance information. If you need Customer Service assistance, representatives are available from Monday through Friday, 8:00 8:00 EST at Or for support at service@connectyourcare.com. How will I know if I need to submit a receipt to ConnectYourCare for substantiation? If a receipt is needed, you will be notified by or letter within a week of your payment card swipe. You can also review if your claim requires receipts online by logging into your account and visiting the Claim Center. You need to submit receipts if you see a notice. What if I don t submit my receipts? You must provide the receipts within the time requested, or the transaction will be deemed ineligible, and you will be required to refund the amount of the transaction. If you fail to submit required receipts within 60 days, your payment card will be deactivated. If you fail to reimburse the account, the amount of the ineligible expenses may be added to your W-2 or withheld from your pay. Read More FAQs Online 5

6 CDH Portal: Online Account Information and Tools A major component of Consumer-Directed Healthcare (CDH) is providing consumers with the tools and education they need to make informed healthcare decisions. Our online CDH Portal puts the account information and health education tools you need to make wise healthcare decisions at your fingertips. Where to Begin: Go to Select the log in link from the upper right hand corner. Sign in with your user name and password. If it is your first time visiting the site, choose New User Registration to select your user name and password. online CDH portal Health Education Tools The online CDH Portal gives consumers access to valuable health education tools, including: Online Account Access ConnectYourCare makes it easy to access and manage your Flexible Spending Account online. Use the CDH Portal to: Get Account Balance View Payment Card Charges Enter a New Claim View Claims/Submit Receipts* for Purchases Requiring Substantiation View Claim Status *Remember to save your receipts; IRS rules require them as verification. Care Guides: Information on chronic conditions, such as asthma and high blood pressure Hospital Comparisons: Independent comparisons of area hospitals by procedure or diagnosis Prescription Center: Average costs for thousands of prescription drugs, cost effective prescription alternatives, and printable guides to take to a doctor Pregnancy Center: Important information for all stages of pregnancy Healthy Living Tips: Advice on living, eating and exercising Medical Encyclopedia: Detailed information on thousands of health topics, including symptoms, surgical procedures, medical tests, poisons, and injuries Diseases and Conditions: A - Z listing of over 1,500 ailments with treatment and prevention options Special Topics: A collection of health related topics from Aging to the Food Guide Pyramid and much more! 6

7 CDH Portal Account Online Access ConnectYourCare makes it easy to access and manage your Flexible Spending Account online at the Consumer-Directed Healthcare (CDH) Portal. Where to Begin: Go to Select the log in link from the upper right hand corner. Sign in with your user name and password. If it is your first time visiting the site, choose New User Registration to select your user name and password. Get Account Balance: Your account balance is updated in real time. Log into the CDH Portal and select My Account. Balance displays for all healthcare accounts if you have more than one. Click on the Account Name to get details of the credits and debits to specific accounts. Set Up Direct Deposit: You are eligible to receive funds by check or direct deposit. For quicker service, we suggest you sign up for direct deposit. Log into the CDH Portal and select My Account. Click Direct Deposit and enter necessary bank information. Enter a New Claim: If you pay for an expense out of pocket (without using your healthcare payment card), you must enter a claim for reimbursement and submit your receipts. Entering a new claim is easy. Log into the CDH Portal and select Claim Center. Click on Add New Claim. Follow the four easy steps on the screen to enter information about your claim. Continue through the screens until the Claims Submission Form displays. Print the Claims Submission Form to use as your cover sheet, then fax it with your receipts to the number shown on the form. You can also scan the receipts to your computer and them to the address on the form, or mail them to our claims center through the postal service. Submit Receipts* for Purchases: Even if you pay for an expense using your healthcare payment card, you may still need to submit receipts for that purchase. A notice will be posted in your online account when receipts are needed. To submit a receipt or to determine if you need to submit a receipt for a purchase, simply: Log into the CDH Portal and select Claim Center. All claims display; ones needing receipts show at the top. Click on Reprint Form next to the claim to print your Claim Submission Form, then fax, or mail it with your receipts to the number or address shown on the form. To view details of a claim, including copies of previously faxed receipts, click on View Details. View Claim Status: At any time after your request is sent in, you can return to the Claim Center to see the status of your claim. Log into the CDH Portal and select Claim Center. The status of all claims will be displayed. View Reimbursement Schedule: Requests are processed usually within two days of receipt and sent out reimbursements on your next scheduled reimbursement cycle as established by your employer. View your reimbursement schedule online: Log into the CDH Portal and select Claim Center. Click View Reimbursement Schedule. *Remember to save your receipts; IRS rules require them as verification. Receipts for FSA purchases must contain: Date of service Name and address of service provider or merchant Description of the service or expense provided Amount charged Receipts for DCAP purchases must contain the information above, and: Name and age of the dependent Please note that non-itemized cash register tapes, credit card receipts and cancelled checks alone do not provide proper substantiation. 7

8 Using Your Healthcare Payment Card ConnectYourCare also provides a convenient healthcare payment card to access account funds. You will receive this card in the mail. Use Your Card Use your healthcare payment card to directly pay for services at approved merchants (see sidebar). The money comes right out of your Flexible Spending Account (FSA), so use it like a checking account. Although your payment card says debit, you must select credit at your provider location, and no personal identification number (PIN) is required to use it. Know Your Balance By frequently checking your account balance online, you will have a good idea of how much is available in your account. When you swipe your payment card, the system makes sure that your coverage is active and that you have sufficient funds in your account for the full transaction amount. If not, the transaction will be declined. Know What s Eligible Familiarize yourself with what is an eligible expense through the online Consumer-Directed Healthcare (CDH) Portal. When you purchase eligible items along with personal items, be sure you have them rung up separately. If you use the card for ineligible FSA expenses, you will be asked to reimburse the plan. Save Your Receipts Although your payment card eliminates the need to file paper claims, the IRS requires that your FSA charges be verified. Save your receipts to confirm your purchases. Lost or Stolen Cards Report a lost or stolen card immediately to ConnectYourCare by calling toll-free Use Your Card At Approved Merchants Your card has been programmed to work only at designated healthcare merchant locations based on their merchant category code (MCC). Your card should only be used for eligible expenses, and it is required that you save your receipts. You will not be able to use your healthcare payment card at locations that are not eligible merchants. For eligible purchases at other locations, you can pay for items with other means and then submit a request for reimbursement through your CDH Portal: This card is issued by UMB Bank, n.a. pursuant to a license from Visa U.S.A. Inc. 8

9 Healthcare Payment Card FAQs Is this a regular credit card? No, the healthcare payment card is a debit card to access funds from your Flexible Spending Account (FSA). It is provided to give you quick access to the funds in your account and should only be used at qualified locations for eligible expenses. When paying for eligible expenses at a qualified merchant, simply swipe the card as you would a regular credit card; no personal identification number (PIN) is required. If offered the option, always select credit from the card terminal. Your card will be automatically activated the first time you use it. Where can I use my healthcare payment card? Your healthcare payment card can be used nationwide at qualified service providers that accept Visa debit cards. The card is programmed to work only at merchant locations that are designated as healthcare merchants based on their Merchant Category Code (MCC). Examples of qualified merchants include pharmacies, doctor and dentist offices, vision centers, and hospitals. Remember to only use it for qualified healthcare expenses and save your receipts! What are the benefits of the card? The main benefit of the healthcare payment card is convenience. It allows you immediate access to your account funds. Rather than paying out of pocket for qualified expenses, filing a claim and then waiting for reimbursement, using the card will allow you to access your funds directly and pay the provider. While you may still need to fax in receipts to support your purchase, you will not have to wait for your money to be reimbursed. The card also eliminates the need for you to fill out a claim form online or manually by paper. If we still need receipts from you, we ll send you a request. Since you can use that request as the claim cover sheet, it s a simple process to attach your receipts and fax, or mail to the Claims Department. Do I still need to keep my receipts? YES! Third party documentation may be required any time you use your payment card or request reimbursement. Therefore, always hold on to your receipts* in case further documentation is requested. Receipts for FSA purchases must contain the following information: Date of service Name and address of service provider or merchant Description of the service or expense provided Amount charged Receipts for DCAP purchases must contain the above information, as well as: Name and age of the dependent *Please note that non-itemized cash register tapes, credit card receipts and cancelled checks alone do not provide proper substantiation. What happens if I use the card for an ineligible expense? If you use the card for an ineligible FSA expense, you will be required to reimburse your account for that transaction. How many cards will I receive? You will only receive one healthcare payment card. You may order an additional card for a spouse or dependent, or if your card is ever lost or stolen, for a charge of $5.00 per additional card. Simply contact ConnectYourCare at to request a card. Walgreens, Wal-Mart and Drugstore.com automatically ensure items purchased with your healthcare payment card are qualified expenses, reducing the need to submit receipts! Read More FAQs Online 9

10 Flexible Spending Account Tax Savings Tax Benefits from Opening a Flexible Spending Account While there s no such thing as free money, a Flexible Spending Account can help your money go a lot further. Review the savings example below and use our Savings Calculator on the next page to see how much you could save by enrolling in a ConnectYourCare FSA. TAX SAVINGS EXAMPLE Traditional Employee FSA Participant Gross Pay $40,000 $40,000 FSA Contribution $0 $5,000 Taxable Income $40,000 $35,000 Taxes* 12,400 $10,850 Spendable Income $27,600 $29,150 Tax Savings $ 1,550 *Assumes an estimated tax rate of 31% based on a combination of social security, federal and state income taxes using national averages. 10

11 Flexible Spending Account Calculator While there s no such thing as free money, a Flexible Spending Account (FSA) can help your money go a lot further. Use our Savings Calculator below to see how much you could save by enrolling in an FSA. Or, try our online FSA Savings Calculator: Eligible FSA Expenses An FSA can cover medical, dental or vision expenses that you would otherwise pay out of pocket. Enter the annual amounts you spend on each expense to see how much you should contribute to your FSA. Medical deductible $ Office visit copays Chiropractic services $ Psychiatric services $ Medical supplies and equipment $ Laboratory or x-ray charges $ Surgical or outpatient procedures $ Hospitalization expenses $ Prescription drugs $ Over-the-counter drugs $ Other medical expenses $ Dental deductible $ Dental preventative visits $ Orthodontia expenses $ Other dental expenses $ Vision deductible $ Vision exam $ Glasses, contact lenses, supplies $ Other vision expenses $ Other expenses $ Annual FSA Election $ IRS rules require that you forfeit any unspent money in your FSA and/or DCAP at the end of the plan year. This worksheet can help you estimate what you really expect to spend. Plan Carefully! Dependent Care Assistance Program FSA (DCAP) A Dependent Care Assistance Program FSA (DCAP) covers the cost of most types of caregivers who watch your dependents while you work. Enter the amounts you spend on each expense to see how much you should contribute to the DCAP. Day care center $ Au pair or in home care $ Nursery school $ Before school care $ After school care $ Elder care $ Other dependent care expenses $ Annual Elections Annual DCAP Election (X) tax rate (from left & above) (from table below) = Tax Savings! Annual Household Income Estimated Tax Rate* less than $30,000 25% $30,000 - $39,999 29% $40,000 - $69,999 31% *The tax rates are estimated based on a combination of social security, federal and state income taxes using national averages. 11

12 Eligible FSA Expenses Sample Eligible FSA Expenses The following are eligible for tax-free purchase with your FSA funds. Acupuncture Alcoholism treatment Ambulance Artificial limb Automobile modifications for physically handicapped person Birth control pills Blood pressure monitoring device Braille books & magazines (above the cost of regular printed material) Chiropractic care Christian Science practitioner Contact lenses & related materials Crutches Dental treatment Dentures Diagnostic services Drug addiction treatment Eye examination Eye glasses & related materials Fertility treatment Flu shot Guide dog or other animal aide Hearing aids Hospital services Immunization Insulin Laboratory fees Laser eye surgery Medical testing device Nursing services Obstetrical expenses Organ transplant Orthodontia (not for cosmetic reasons) Over-the-counter medications (see separate list for details) Oxygen Physical exam Physical therapy Prescription drugs Psychiatric care Smoking cessation program Surgery Transportation for medical care Weight loss program to treat obesity Wheelchair Sample Expenses that are NOT Eligible for FSA Funds These items are never eligible for tax-free purchase with FSA funds. Cosmetic surgery Exercise equipment Fitness programs Funeral expenses Hair transplants Household help Illegal operations and treatments Insurance premiums Maternity clothes Teeth whitening Vitamins 12

13 Eligible Over-the-Counter Expenses Your FSA can also be used for some over-the-counter (OTC) medications. Sample Eligible Over-the-Counter FSA Expenses These OTC items are eligible for purchase with your FSA funds. Acne medications Allergy prevention/treatments Anesthetic mouth gels and rinses Antacids and acid reducers Anti-itch creams Antiseptics Bandages and dressings Cold and flu medicines Cold sore remedies Contact lens solutions Decongestants Eye drops Eye patches Oral pain relievers Pain and fever relievers Prenatal vitamins Reading glasses Sinus medications Smoking cessation products Sunburn creams/sun block The Maybe List These products have more than one purpose and may be eligible if prescribed by a doctor for a specific condition or disease. Fiber supplements Herbal supplements Orthopedic shoe inserts Snoring cessation aids Weight loss and dietary supplements Sample Over-the-Counter Expenses that are NOT Eligible for FSA Funds These OTC items are never eligible for tax-free purchase with FSA funds. Cosmetics Denture supplies Deodorant Lens cleaners Moisturizers and wrinkle creams Sun tan lotions Toothpaste, toothbrushes and mouth wash Tooth whitening products Vitamins taken to improve overall health 13

14 Eligible Dependent Care Expenses DCAP funds cover care costs for your eligible dependents while you are at work. Remember to use your funds by the end of your plan year; IRS rules require that you forfeit any money deposited in a DCAP account that is not spent. Dependent Care Expenses that CAN Be Reimbursed Through a DCAP Please note: Expenses must be for dependent care provided during working hours. Before school or after school care (other than tuition expenses) Custodial care for dependent adults Licensed day care centers Nursery schools or pre-schools Placement fees for a dependent care provider, such as an au pair Care of an incapacitated adult who lives with you at least eight hours a day Child care at a day camp, nursery school, or by a private sitter Late pick-up fees Summer or holiday day camps Dependent Care Expenses that CANNOT Be Reimbursed Through a DCAP Expenses for children 13 and older Educational expenses including kindergarten or private school tuition fees Amounts paid for food, clothing, sports lessons, field trips and entertainment Overnight camp expenses Registration fees Transportation expenses Care for dependent while sick employee stays home Late payment fees Payment for services not yet provided (payment in advance) Medical care 14

15 Quick Steps for Using Your Account 1. Enroll in a ConnectYourCare Flexible Spending Account. During your company s open enrollment, enroll in a Flexible Spending Account from ConnectYourCare. Make sure you total your entire medical, dental or vision expenses that you would otherwise pay out of pocket to determine how much you should contribute to your FSA. 2. Use the online Consumer-Directed Healthcare (CDH) Portal to access health and account information. Visit and click on the log in link in the upper right hand corner of the screen. Once logged in, you can access health education tools and account information, including account balance, healthcare payment card charges, and claim information. 3. Use your healthcare payment card to pay for qualified expenses. Once you receive your healthcare payment card in the mail, you can begin using it to pay for any eligible medical expense, including prescriptions, over-the-counter medications, doctor office co-pays, health insurance deductibles and coinsurance. Remember to always save your receipts! 4. Create new claims and submit your receipts for purchases needing documentation. Using the healthcare payment card for a qualified purchase automatically creates a claim in your online account. Even if you use your healthcare payment card for a purchase, you may still need to submit receipts; a notice will be posted in your online account when receipts are needed. If you did not use your card, you can create your claim for reimbursement online and submit your receipts via fax, or mail to the Claims Department. 5. Return to the CDH Portal to manage your account. Use the CDH Portal any time of the day or night to access account information and health education tools. It s that easy! 15

16 About ConnectYourCare Top Reasons to enroll in a ConnectYourCare Flexible Spending Account An FSA saves you money in taxes. You can use your FSA to pay for hundreds of qualified expenses. The online CDH Portal puts account and health information at your fingertips. ConnectYourCare s healthcare payment card makes it easy to access your account funds. You can even use the same card for multiple ConnectYourCare accounts. ConnectYourCare simplifies and speeds up the claims process eliminating the need to mail in paper claims and decreasing the time for reimbursement. With my ConnectYourCare account, I can pay for everything from prescriptions to over-the-counter medicines to doctor copays with the swipe of one card. I can even use the same card to access my Dependent Care Account and pay for my child s daycare. There s no guessing about my account balance, because it s instantly updated online. - ConnectYourCare Member ConnectYourCare is focused on helping you become a better healthcare consumer. ConnectYourCare is a CDH solution provider that was founded to advance consumers choice, convenience and control over healthcare. ConnectYourCare delivers technology solutions with a consumer focus. ConnectYourCare is designed to help you manage your healthcare dollars while giving you access to valuable health education tools. With a ConnectYourCare account, you get a healthcare account, healthcare payment card, online account management, and health and wellness education. For more information on ConnectYourCare, please visit Questions? Visit our online FAQs ConnectYourCare Customer Service Representatives are available 8 am to 8 pm EST Monday through Friday at or at service@connectyourcare.com 16