SAVE 25% HOW FSAs WORK S AV E $ 2 5 T O $ 4 0 F OR E V E RY $ I N YO U R F S A. Flexible Spending Accounts TO 40%

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1 HOW FSAs WORK Here are 3 typical examples of how the Flexible Spending Account (FSA) can give you tax savings throughout the year. There is a worksheet inside and on our website to help you figure out your own tax savings. VISIT OUR WEBSITE TO LEARN MORE. Flexible Spending Accounts Single parent with one child n Qualified Over-the-Counter items n Eyeglasses, Eye Exams & Contacts n Laser vision correction n Before and after-school care & daycamp , SAVES $1,875 to $2,920 SAVE 25% TO 40% Young couple with two children n Sealants, crowns & bridges n Braces, spacers & retainers n After-school care, daycamp & pre-k ON THE DOLLARS YOU SPEND FOR QUALIFIED EXPENSES 1,500 4,080 6,580 SAVES $1,645 to $2,632 Mature couple with dependent elder n Chiropractor & podiatrist fees 100 n Physical therapy n Smoking cessation program 560 n Weight-loss program (for specific disease) 380 n Elder daycare for dependent adult SAVES $1,875 to $3,000 7,500 Here s an example of how a typical employee s take-home pay increases by participating in the FSA. She pays her insurance premiums, health and daycare expenses through the FSA with tax-free dollars and she actually saves $100 each month! H E A LT HC A R E DE PE N DE N T C A R E Her paycheck without the plan Insurance premium Health & daycare expenses - FICA, federal & state taxes -500 Her paycheck with the plan Insurance premium* Health & daycare expenses* - Adjusted earnings $1,600 FICA, federal & state taxes -400 Net pay without the FSA $1,100 Net pay with the FSA $1, *paid through the FSA SAVED $100 S AV E $ 2 5 T O $ 4 0 F OR E V E RY $ I N YO U R F S A. visit ustomdesig nb ene f its.com

2 SAVE ON ITEMS NOT COVERED BY HEALTH INSURANCE Flexible Spending Accounts (FSAs) are a benefit that allow you to pay for certain items TAX-FREE. The two main types are for Healthcare and Dependent Care. You decide on an amount that is set aside each pay period for these expenses. Do not put more in the FSA than you can reasonably use because funds do not rollover and are lost if not spent. The full amount of annual Healthcare FSAs are available at the beginning of the plan year. Dependent care is available only as funds from your paycheck are deposited. With a little planning, you can save more on things you normally purchase! Healthcare FSAs are a simple way to save $25 to $40 for every $100 you spend. QUALIFIED HEALTHCARE ACCOUNT EXPENSES if purchased during the plan year Acupuncture Alcoholism treatment Ambulance Artificial limbs/teeth Braces Chiropractors Christian Science practitioner s fees Contact lenses & solutions Copayments Costs for physical or mental illness Crutches Deductibles Dental services Dentures Diabetic test strips Diagnostic tests & labs Dietary supplements prescribed by a doctor Drug & Medical supplies (syringes, needles, etc.) Eyeglasses* Eye examinations Eye surgery (cataracts, LASIK, etc.) Hearing devices & batteries Hospital bills Insulin Laboratory tests Laser eye surgery Medical supplies Obstetrical expenses Orthodontia (braces) Orthopedic devices Over-the-counter drugs (see below) Oxygen Physician fees & copayments Prescription Drug Medications Psychiatric care Psychological services & care Rental of Medical Equipment Routine physicals & tests Smoking cessation drugs* Smoking cessation programs Sunglasses* Surgical services & fees Weight loss programs or OTC drugs (if associated with a specific disease)* Wheelchair Vitamins* X-rays Only healthcare expenses not reimbursed by insurance can be claimed. *if prescribed by a doctor or may require a doctor s letter of medical necessity INELIGIBLE EXPENSES UNDER THE HEALTHCARE ACCOUNT Cosmetic surgery & procedures Dental bleaching Marriage or family counseling Premiums you or your spouse pay for insurance Weight loss for general health or appearance CHANGES FOR OVER-THE-COUNTER MEDICATIONS As a result of Health Reform legislation, over-the-counter medications are only eligible with a doctor s prescription. Since a prescription is required for these expenses, the FSA Card cannot be used to buy them. However, they are still eligible if you pay up front and request reimbursement. See below for more information. Listed below are some of the items that will require a doctor s prescription to be eligible for reimbursement from the Healthcare FSA: n Asthma medications n Cold, flu & allergy medications n Cold relief syrup or tablets n Cough drops or syrup n Flu relief tablets or liquid n Sinus medications n Arthritis pain reliever n Pain relievers, aspirin & non-aspirin n Throat pain medications n Acid reducers n Antacid gum, liquid or tablets n Anti-diarrhea medications n Laxatives n Pinworm treatment n Upset stomach medications FILING CLAIMS FOR OVER-THE-COUNTER MEDICATIONS An FSA Claim Form, receipt and doctor s prescription is required for over-the-counter medicines reimbursed under the Healthcare FSA. If a physician has prescribed an over-the-counter medicine for ongoing treatment (such as daily aspirin or a daily antihistamine), submitting a copy of the prescription with each claim will result in the fastest reimbursement. If you provided a copy of the prescription already and do not wish to include it in future submissions, you may note this on the claim form. This additional step for CDB may slow the reimbursement as we will need to verify the original claim submission in order to process additional claims.

3 FSA WORKSHEET Now that you know about the many ways you can use pre-tax earnings to keep more of what you earn, simply complete this basic worksheet to figure out what you spend and what your savings will be. Once you enroll, the entire amount you estimate for healthcare expenses for the year will be available to you on the first day of the plan year. Dependent care expenses are available when you make deposits with each paycheck. TAKE HOME MORE OF THE MONEY YOU EARN. Use this worksheet to figure out what to put into your Flexible Spending Account and what you will save. Then, complete an election form. After that, a portion of the money will be deducted automatically from your paycheck before taxes. HEALTHCARE EXPENSES FOR EXPENSES NOT COVERED BY INSURANCE to doctors n Eligible over-the-counter items n Prescription drugs n Office visits & checkups n Prescribed sunglasses & eyeglasses n Contact lenses, solutions & supplies n Eye exams, surgery & LASIK n Dental cleanings, fillings & x-rays n Sealants, crowns, bridges & dentures n Braces, spacers & retainers n Wisdom teeth, implants & oral surgery n Psychologist & psychiatrist fees n Obstetrics & fertility n Lab tests & body scans n Chiropractic & podiatrist fees n Oxygen, insulin, syringes & supplies n Hearing aids, batteries & exams n Artificial limbs & braces n Arches & orthopedic shoes n Walkers, canes & wheelchairs n Physical & speech therapy n Weight-loss program (prescribed by doctor) n Quit-smoking program & medications n Alcoholism & drug treatment n Medical alert bracelet & fees n Reconstructive surgery (birth defect, disease) n Wigs for hair loss caused by disease n Special school for disabled child n Travel & mileage to doctor or hospital TOTAL 1 DEPENDENT CARE EXPENSES SO YOU CAN WORK n Nanny & babysitter thru age 12 n Pre-K or nursery school n Before & after-school care thru age 12 n Day camp thru age 12 n Daycare for a disabled adult or child n Elder daycare for parent or dependent TOTAL 2 Federal Limits: - Married Filing Jointly or Single: $5000 Maximum Allowable per year - Married Filing Separately: $2500 Maximum Allowable per year ESTIMATED ANNUAL EXPENSES & TAX SAVINGS Save between 25% and 40% on FICA, federal & state income tax (in applicable states) + Enter your tax: YOU SAVE: 1 2 x % Based on national averages, you ll save 25% if your annual household earnings are less than $30,000, 36% if you earn $30,000 to $60,000 or 40% if you earn more than $60,000. Federal and/or plan limits apply to all options. See your summary plan description for plan limits. =

4 HOW FSAs WORK Here are 3 typical examples of how the Flexible Spending Account (FSA) can give you tax savings throughout the year. There is a worksheet inside and on our website to help you figure out your own tax savings. VISIT OUR WEBSITE TO LEARN MORE. Flexible Spending Accounts Single parent with one child n Qualified Over-the-Counter items n Eyeglasses, Eye Exams & Contacts n Laser vision correction n Before and after-school care & daycamp , SAVES $1,875 to $2,920 SAVE 25% TO 40% Young couple with two children n Sealants, crowns & bridges n Braces, spacers & retainers n After-school care, daycamp & pre-k ON THE DOLLARS YOU SPEND FOR QUALIFIED EXPENSES 1,500 4,080 6,580 SAVES $1,645 to $2,632 Mature couple with dependent elder n Chiropractor & podiatrist fees 100 n Physical therapy n Smoking cessation program 560 n Weight-loss program (for specific disease) 380 n Elder daycare for dependent adult SAVES $1,875 to $3,000 7,500 Here s an example of how a typical employee s take-home pay increases by participating in the FSA. She pays her insurance premiums, health and daycare expenses through the FSA with tax-free dollars and she actually saves $100 each month! H E A LT HC A R E DE PE N DE N T C A R E Her paycheck without the plan Insurance premium Health & daycare expenses - FICA, federal & state taxes -500 Her paycheck with the plan Insurance premium* Health & daycare expenses* - Adjusted earnings $1,600 FICA, federal & state taxes -400 Net pay without the FSA $1,100 Net pay with the FSA $1, *paid through the FSA SAVED $100 S AV E $ 2 5 T O $ 4 0 F OR E V E RY $ I N YO U R F S A. visit ustomdesig nb ene f its.com

5 HOW YOUR FSA CARD WORKS Over 80% of Healthcare FSA expenses are automatically approved so, in most cases, you won t need to submit claims or documentation for FSA Card use. However, always keep copies of your receipts and other supporting documentation. Below is a table to help guide you when using your FSA Debit Card. FSA CARD ACTION TYPE OF VENDOR OR TYPE OF SERVICE HELPFUL HINTS No Substantiation Required The FSA Card will work without anything further from you! Please keep a copy of documentation just in case. Healthcare Providers with Copays: Hospitals Pharmacy Physician s Office Vision Care Providers Urgent Care Outpatient Surgery Centers Prescriptions & other qualified over-the-counter items can be purchased at participating retailers. See list inside for more information. Recurring Expenses: by indicating expenses are recurring in exact equal amounts for the exact same provider on the FSA Claim Form, you will not need to continue to send in supporting documentation and claim forms. Coinsurance is where the employee pays a percentage versus a flat copay. These may require you to submit supporting documentation. It s important that you keep all of your supporting documentation. You will receive a letter if supporting documentation is required by the IRS guidelines. Examples include Dependent Care and monthly visits to certain types of healthcare providers. May require supporting documentation The FSA Debit Card can only be used at Healthcare providers like Dentists, Doctors or Vision Care Providers. If you use the FSA Card, you will receive a letter if documentation is required for these common types of expenses: n Deductibles or Coinsurance n Spouse s insurance out-of-pocket expenses n Caregivers for Dependents (Dependent Care) You will receive a letter if more information is required. To avoid having your card suspended, please submit requested documentation no later than 30 days after the reminder letter is sent to your home. Cannot use the FSA Card n Due to Health Reform, over-the-counter medications require a doctor s prescription and cannot be purchased with the FSA card but they are still eligible for reimbursement. n Any non-qualified expense n Any non-participating provider, merchant or retailer not mentioned above If an item is a qualified expense for this plan year, you can use another form of payment and submit your claim with supporting documentation. Over-the-Counter medicines must have a doctor s prescription submitted with the claim for reimbursement. Although it is a Debit Card, please ask cashiers to run your FSA Card as a Credit Card

6 USING YOUR FSA INSTRUCTIONS FOR FILING A CLAIM FSA CARD USERS Please do not send documentation unless you receive a letter from CDB. Nearly 80% of FSA Card transactions do not require anything further. ONLINE Login to the Custom Design Benefits FSA portal. Select the Request Payment button at the top of the screen and follow prompts to complete your claim form electronically. Then , fax or mail your documentation to Custom Design Benefits. Retain a copy of this for your records. Complete the FSA Claim Form & attach scanned documentation to the . All other questions and forms should be ed to our Flex address. FlexClaims@CustomDesignBenefits.com FLEX@CustomDesignBenefits.com FAX Complete the FSA Claim Form & fax with documentation MAIL Complete the FSA Claim Form & mail with documentation. (Please keep copies of your documentation.) 3737 West Fork Road Cincinnati, OH QUESTIONS? Local Cincinnati Toll-Free Toll-Free 24-Hour Balance Inquiry GETTING ONLINE To learn more about FSAs, visit our website, and click on the FSA+HRA button (see image at right). Our website offers: n Worksheet & Calculator Figure out how much to elect in your FSA based on what you normally spend and estimate your tax savings. n Forms Download forms or complete electronically and to us. n Frequently Asked Questions Answers to common questions about FSAs are provided online with links to other resources. Once you become an FSA participant, you can review your account online. From our home page, click on MyFlexOnline (see image at right). The first time you access your account, click New User to register and set up your own Username and Password. look for this image: When you select MyFLEX LOGIN from the home page you will be directed to MyFlexOnline. At MyFlexOnline, you can check your FSA and HRA year-to-date expenses, check your account balance, print reports, and file claims.