FSA Frequently Asked Questions Employer

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1 Check out these frequently asked questions to learn more about Flexible Spending Accounts. Q What is a Flexible Spending Account (FSA)? A An FSA is a benefit you sponsor for your employees. It lets your employees set aside pre-tax dollars to pay for eligible expenses like: Health care Dependent care Transportation (fringe benefit plan) Parking (fringe benefit plan) Q Who can offer an FSA plan? A In most cases you can offer an FSA to your employees. Generally, self-employed individuals, partners and some subchapter S shareholders can t participate in an FSA. You should check with your legal or tax advisor if you have any questions regarding your specific situation. Q Who may contribute to an FSA? A Employees contribute to their own FSA through pre-tax salary deduction. You can also contribute money to your employees FSAs. Q How much money can be contributed to an FSA? A An FSA is limited by law. The 2018 limits are: Health care FSA - $2,650 Dependent care FSA - $5,000 for a single person or married filing jointly, and $2,500 for married filing separately Transportation FSA - $255 per month Parking FSA - $260 per month These are maximum limits. Your plan documents must state a maximum dollar amount or percent of salary that can be contributed. 1

2 Q Can an FSA be offered with any HealthPartners plan? A Yes, an FSA plan can be offered alongside any HealthPartners medical or dental plan. However, according to IRS regulations, if employees contribute to an HSA they can only enroll in a limiteduse FSA. A limited-use FSA only reimburses expenses for: Dental Vision Preventive care Q What are eligible medical expenses? A These are common eligible expenses: Doctor visits Chiropractor fees Prescription drug copays Dental care and vision care not already covered by a health plan are also eligible health care expenses. Generally deductions allowed for medical expenses on your federal income tax, according to the Internal Revenue Code Section 213 (d), may be reimbursed through your FSA. You can log onto healthpartners.com to view a list of common qualified expenses. Q What are eligible dependent care expenses? A These are common eligible expenses: In-home child care Licensed daycare and preschool facilities Before or after school programs Elder care They can be used for an eligible dependent who is: Either under the age of 13 or meets the Qualifying person test. The test is described in IRS Publication 503. Go to irs.gov to view IRS Publication 503. Physically or mentally unable to care for oneself. And they live with the employee more than half the year. 2

3 Q What are eligible transportation and parking expenses? A These are some common eligible expenses: Transportation:» Bus and light rail fares» Train and subway tickets Parking:» Parking ramps, lots and meters Q Are there any regulations I need to know about? A Yes. Health care FSAs are governed by Internal Revenue Code, Section 125 when offered through a cafeteria plan. If the health care FSA isn t offered through a cafeteria plan, it s subject to Internal Revenue Code Section 105. Usually they re subject to ERISA, COBRA and HIPAA laws. Section 129 of the Internal Revenue Code is for dependent care FSAs. Q How often are reimbursement requests paid? A They re processed daily and reimbursed weekly. Claim reimbursement requests received by noon on Thursday will typically be reimbursed the following week. If more information is needed to process the claim, HealthPartners will send a request electronically or by mail, depending on the member's preference. Q What reimbursement options does HealthPartners offer my employees? A It depends on the type: Health care Dependent care Transportation/Parking FSA reimbursement options Automatic myhp Mobile App & Online Paper Health care X X X Dependent care X X Transportation/Parking X X 3

4 Options for reimbursement 1. Automatic : If medical expenses are at a network provider or pharmacy, the medical claim is automatically sent to HealthPartners for processing. Any payment responsibility from that claim is automatically sent to the health care FSA for reimbursement. This option isn t available for limited-use FSAs. Employees can opt out of the automatic feature. Employees must opt out of the automatic if either of the following is true: a) They have dual health plan coverage through a spouse. b) They have a dependent covered under their health plan who doesn t qualify as a tax dependent under the federal tax code. 2. myhp Mobile App & Online : Employees can log on to their account at healthpartners.com and submit their request online. Employees can also download the myhp app to their mobile phone to take a picture of their receipt and submit claims. 3. Manual : For eligible expenses, employees complete the health care reimbursement request form and send it to HealthPartners by mail or fax. Forms are online at healthpartners.com or employees can call Member Services at or Q Does HealthPartners support the health care FSA roll over option? A Yes. You have the option of offering the roll over or grace period. You can t offer both. Q Does HealthPartners offer the grace period option for health care and dependent care FSAs? A Yes. You can choose whether or not to have the grace period. The grace period allows employees up to two months and 15 days beyond the end of the plan year. This lets employees incur and submit reimbursement requests using the previous year s FSA balance. In the case of a calendar year plan, the grace period may extend to March 15 of the following year. Expenses from Jan. 1 to March 15 can be reimbursed from the previous year s FSA. 4

5 Q How does the grace period affect employees wanting to contribute to an HSA? A An employee who s enrolled in a health care FSA with a grace period can contribute to an HSA if: There s no money left in the FSA at the end of the plan year, or They ve reached the end of the grace period. Q What capabilities does HealthPartners mobile app have? A Members can view claims, payments and balances. They can submit claims or documentation by using the camera function. 5