MCR, LLC. Plan Year:... January 1, 2018 to December 31, FSA Health Care Maximum Election:... $2, [pre-funded election]

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1 Flexible Spending Accounts MCR, LLC The FSA plans are provided to allow employees the ability to set aside pre-tax dollars to pay for out-ofpocket expenses incurred by both the employee and their eligible dependents. Plan Year:... January 1, 2018 to December 31, 2018 FSA Health Care Maximum Election:... $2, [pre-funded election] DCA Dependent Care Maximum Election:... $5,000,00 [election is not pre-funded] If you are married and file a separate return, the maximum election amount is $2,500. Run Out Period: Days from Last Day of Plan Year Allows time after the last day of the plan year to submit manual claims for dates of services incurred during the plan year expenses are eligible based on the date of service, not the payment date. Reimbursement Method... CareFlex Benefit Card / Manual Claim Termed Employees Coverage Ceases... Date of Term Benefit Card Deactivated... Date of Term Term Run-Out Period Days from Date of Term Employee Eligibility Regular full-time employees working 40 or more hours per week; Regular part-time employees working 32 to 39 hours per week; Limited part-time employees working 20 to 31 hours per week. Waiting period is 30 days from date of hire. Benefit Changes Election(s) remains in effect until the end of the plan year. Changes to elections are only permitted if you experience a qualifying event (i.e., birth, adoption or death of a dependent; marriage or divorce; or if you or your spouse experience a change in employment or medical insurance coverage). Additional changes for a DCA include a significant increase or decrease in the cost of services. A qualifying event may allow for an increase or decrease of your benefit amount consistent with the event. Changes to benefits must be made within 30 days of the date of the qualifying event. FSA Health Care Coverage includes all qualified dependents, including spouse. Dependent children are covered to the end of the calendar year that the child turns 26. Eligible expenses include all qualified 213(d) medical expenses not reimbursed by other insurance, including vision expenses, dental expenses, and over-thecounter medicines and medical supplies. A FSA Expense Guide can be found under the CareFlex Forms icon in the Quick Links box on the CareFlex website A physician s prescription or completed OTC Prescription Form is required for payment of over-the-counter medicines. Cosmetic procedures must be medically necessary to correct a birth defect or condition resulting from an accident a letter of medical necessity is required. DCA Dependent Care Coverage includes dependents thru age 12; disabled/elder dependents (regardless of age). Eligible expenses include care centers, providers of care outside of the home, dependent care provider who comes to your home, before/after school care, and summer day camps. A DCA Expense Guide can be found under the CareFlex Forms icon in the Quick Links box on the CareFlex website Expenses for a child in nursery school, pre-school, or similar programs for children below the level of kindergarten are eligible. Expenses to attend kindergarten or a higher grade, summer school, overnight camps, and tutoring are not eligible expenses.

2 Flexible Spending Accounts Important Plan Information Reimbursements Participants can access funds with the CareFlex Benefit Card. If the benefit card is not used, manual claims can be submitted to CareFlex. Claim filing options: online through the CareFlex Participant Portal or CareFlex Mobile App, or by submitting a completed reimbursement request form with appropriate documentation to CareFlex. Online Account Access CareFlex provides electronic access to your plan enrollment guide, plan design, account balance, transactions history, online claim filing, and more through the CareFlex Participant Portal and CareFlex Mobile App. Once you register, the same Username and Password is used to access your account through both the portal and the mobile app. CareFlex Participant Portal to access the portal, go to the CareFlex website and select the View My Account link under the Account Holders section; or go directly to the CareFlex Participant Portal: CareFlex Mobile App CareFlex offers a free mobile app for ultimate on the go convenience. Simply search for CareFlex Mobile App in the Apple App Store or Google Play. Documentation Requests Always save your prescription labels, itemized receipts, itemized provider statements, and medical insurance Explanation of Benefits (EOBs)! When CareFlex requires documentation to verify benefit card transactions, it s a quick and easy process, but keeping your prescription labels, itemized receipts, itemized provider statements, and medical insurance EOBs on file makes it easier when the time comes. Requests will be sent by (if we have your address on file) or mail. How to pay for medical services When paying for health care, be sure to always present your medical ID card first to ensure proper processing of your services. If you are asked to pay a copayment, pay with the CareFlex Benefits Card or pay out of pocket and request reimbursement from your account. If you re asked to pay additional charges, do not pay the provider until the claim has been processed by your health insurance plan and you receive your Explanation of Benefits (EOB). This helps avoid overpayment. Compare your EOB to the provider bill to verify the amount being charged is the same as the patient responsibility on the EOB. Then, pay with your CareFlex Benefits Card or pay out of pocket and request reimbursement from your account. CareFlex Benefit Card: The CareFlex Benefits Card will be mailed in a standard, plain white envelope. NOTE: If you already have a benefit card you will not receive a new card unless your card is set to expire; your new plan year funds will be loaded on your existing card on the first day of the plan year. CareFlex Benefits Cards are valid for three years; replacement cards are automatically ordered before the card expires. Not all cards expire at the same time; dependent cards may have a different expiration date than the employee s card. A Valid Thru date can be found on the front of the benefit card. Should a CareFlex Benefits Card become lost, stolen, or destroyed, please contact CareFlex immediately at (888) to deactivate the card. Dependent benefit cards can be requested for eligible dependents. A card is not required for dependents, but may be useful for spouses and dependents that do not live with the employee. To request a dependent card, submit an Additional Card Request Form to CareFlex. The Additional Card Request Form can be found under the Download Forms icon on the home page of the CareFlex website Support@CareFlex.com Toll Free Phone Secure Fax Office Hours: Monday thru Friday 205 W. Dares Beach Road, Prince Frederick, MD :00 am to 5:00 pm

3 Flexible Spending Accounts (FSA) are employer-sponsored benefits that allow you to set aside a portion of your salary, before taxes, to pay for qualified health care and dependent care (day care) expenses. Because that portion of your income is not taxed, you end up with more money in your pocket. The end result is that you decrease your taxable income and increase your spendable income. If you expect to have health care and dependent care (day care) expenses that won t be paid by any other insurance, you should take advantage of your employer s Health Care Spending Account (FSA) and/or Dependent Care Spending Account (DCA). The average person will save 30% on the cost of eligible expenses already incurred. You do not have to be enrolled in your company insurance plan to be eligible to participate in a FSA. You can enroll even if you receive insurance coverage through your spouse s employer.

4 Essential health care expenses for you and your dependents not paid by any other insurance are reimbursable through a Health Care Spending Account. The benefit covers qualified expenses that you, your spouse, and your dependents incur. Dependent children are covered up to age 26 regardless of their tax dependent or full-time student status. For purposes of the Health Care Spending Account, a dependent child may be married and live separately from the accountholder. Note, dependents of your dependent child (including their spouse) are not covered unless these individuals are being claimed as your tax dependent. Typical qualified expenses include medical and prescription copayments and deductible expenses, vision care expenses, eligible dental care expenses (cosmetic dentistry not eligible), and over-the-counter medicines and products. Overthe-counter medicines and products are reimbursable when the product is used for medical purposes. Eligible expenses include medicines or products that alleviate or treat injuries or illness. Over-the-counter medicines or products that merely benefit your general health are not reimbursable without a letter of medical necessity. Examples of products that require a physician s prescription or letter of medical necessity include: pain relievers, cough medicine, allergy medicine, vitamins, minerals, and calcium. [Reference the FSA Expense Guide for more information.] The Health Care Spending Account is pre-funded, allowing participants access to funds up to their annual election amount from the first day of the plan year. Day care expenses for children through age 12 or for dependents of any age who are physically or mentally unable to care for themselves are reimbursable through a Dependent Care Spending Account. There are two requirements for eligible dependent care expenses to qualify. First, it is necessary for both you and your spouse to work in order to remain eligible for reimbursement from the Dependent Care Account. Second, the total amount of expenses to be reimbursed through the account cannot be greater than your income or your spouse s income, whichever is lower. The maximum yearly deposit amount is $5,000; this exceeds the Federal Tax Credit for one child. If you are married and file a separate return, the maximum election is $2,500. The DCS is not pre-funded; you will only receive reimbursement for dependent care expenses up to the amount contributed to date. [Reference the DCA Expense Guide for more information.]

5 When you participate in a Health Care FSA, you elect to have a specific dollar amount deducted from your gross (before tax) salary each pay period. [This lowers your taxable income. That means you also increase your take home pay, or spendable income!] Let s look at an example: John Smith earns $30,000 per year and pays 30% for federal, state, and FICA taxes. He spends $1,500 per year in health care expenses for deductibles, eyeglasses, and dental visits for his family. Salary and Expenses Without FSA With FSA Gross Annual Salary $30,000 $30,000 Pre-Tax Health Expenses - $1,500 Taxable Income $30,000 $28,500 Income Taxes at 30% - $9,000 - $8,550 After-Tax Health Expenses - $1,500 Actual Take Home Income $19,500 $19,950 TOTAL SAVINGS = $450 Quick Facts: Your entire FSA Health Care election is available to you on the first day of the plan year! FSA expenses can be for you and your tax dependents, regardless of whose insurance covers an individual. It isn t just deductible and copay expenses that are covered under an FSA eligible expenses include non-cosmetic dental work, eyeglasses, and alternative care (such as acupuncture and chiropractic services). Your DCA election is available as funds accumulate in your account. DCA expenses can be for your dependents under the age of 13 or over 13 if mentally or physically unable to care for himself/herself. Easy to manage. You will need to keep track of your paperwork, but the CareFlex Participant Portal makes managing your account easy. Eligible Expenses Include: Dependent care center; must comply with state and local laws (applicable if more than 6 persons are cared for). Services of other providers of care outside the home (i.e., neighbors, your parents). Services of a child or dependent care provider who comes to your home. Relatives who provide care (except someone who can be claimed as a dependent or who is a child under the age of 19). Eligible Children or Other Dependents Include: Any child under age 13 who can be claimed as a dependent on your Income Tax Return. Your spouse or any dependent over 13 who is physically or mentally unable to care for himself or herself. Anyone who is physically or mentally unable to care for himself or herself for whom you contribute more than half of their support. Accessing Your Account Online The CareFlex Participant Portal and CareFlex Mobile App put account information at your fingertips 24/7. Online account features: Access account balances. View payment card charges. Enter a new claim. View claims and claims status. Access communication center messages. Find answers to frequently asked questions. Find account forms and documents.

6 Over-the-counter (OTC) drugs and medicines (other than insulin) require a physician s prescription or OTC Prescription form to qualify as an eligible medical expense under a Health Care Spending Account. This provision impacts how we pay for these qualified expenses. CareFlex Benefits Card Pharmacies and drug stores that are certified as a 90% merchant (over 90% of sales are for qualified health care expenses) will continue to accept health benefit cards; however, a physician s prescription or OTC Prescription form will be required to be submitted to CareFlex to substantiate the expense. Pharmacies that have an Inventory Information Approval System (IIAS) may accept health benefit cards to purchase OTC medicines provided that a physician s prescription is presented to the pharmacist, the pharmacist dispenses the drug in accordance with applicable law, an RX number is assigned, the pharmacist retains certain records and the records are accessible by the employer s plan or its agent. If a pharmacy will not fill the OTC medicine as a RX, you will not be able to use a health benefit card and will have to pay with another form of payment and submit a claim to CareFlex to receive reimbursement from your account. Submitted claims must include a completed reimbursement request form, an itemized receipt and a physician s prescription or completed OTC Prescription form. An adequate itemized receipt contains the name of the product, the date, and the amount paid. A physician s prescription must include: the date prescribed, name of patient, name of the OTC medicine, and the physician s address and license number. A physician s prescription or OTC Prescription form will stay on file at CareFlex for the duration of a plan year. Over-The-Counter Products OTC products that are not medicines but used for medical purposes (reference the FSA Expense Guide for more information) are reimbursable without a prescription under a Health Care Spending Account. Health benefit cards can be used to pay for eligible OTC products at merchants that have an Inventory Information Approval System (IIAS) or are certified as a 90% merchant. Purchases made at 90% certified merchants will require an itemized receipt to be submitted to CareFlex to substantiate the expense. If not paid with a health benefit card, you can submit a claim to CareFlex for reimbursement from your account. Submitted claims must include a completed Reimbursement Request form and an itemized receipt. An adequate itemized receipt contains the date, the name of the product, and the amount paid. If your receipt does not include this information, you will need to copy the label from the product or its packaging, circle the correct amount on your receipt, and submit with your completed Reimbursement Request form. Dual-Purpose Products Certain OTC products are considered dual-purpose, such as vitamins and supplements. This is because for some individuals the product is used to alleviate a medical condition, while others use the product for general health and well-being. These dual-purpose products may be eligible for reimbursement, but require a Medical Necessity form stating your specific diagnosis or medical condition, a recommendation to take the specific OTC medicine to treat your condition, and documentation of the product and cost. Please note: submitting a Medical Necessity form with your claim does not guarantee that the expense will be approved. Excluded Items OTC products that are not medicines or merely benefit your general health are not reimbursable without a Medical Necessity form. An OTC Prescription/Medical Necessity Form can be downloaded from the CareFlex website A Pharmacy Locator can also be accessed from the website.

7 All enrollees will receive a CareFlex Benefits Card to access funds. The full election amount is available on the card on the first day of the plan year to pay eligible expenses. The card swipe process works like any MasterCard transaction, but will only work to transfer funds for properly coded transactions. Transactions at merchants not providing authorized services will be denied. Transactions that exceed your annual election amount will also be denied. The Care- Flex Benefits Card is valid for a three-year period, allowing next plan year s election to be loaded on the card. Your card is programmed to work only at pharmacies, discount stores, and grocery stores that submit a health care transaction total to CareFlex. To locate certified merchants, use the Pharmacy Locator provided on our website: Remember to save your itemized receipts! At times documentation is requested to verify purchases. Keeping itemized receipts on file makes it easier when the time comes. Medical Services When you pay for health care, be sure to always present your health insurance ID card first to ensure proper processing of your services. Copays: If you are asked to pay a copay, you may pay with the CareFlex Benefits Card, or you may pay out of pocket and request reimbursement from your account. Save your itemized receipt to submit as documentation. Additional Charges: If you re asked to pay additional charges, do not pay your provider until the claim is processed by your health insurance plan and you receive your Explanation of Benefits (EOB). This helps avoid overpayment. Compare your EOB with the provider bill to verify the amount being charged by your provider is the same as the patient balance on the EOB. Then, pay with your Care- Flex Benefits Card, or pay out of pocket and request reimbursement from your account. The Pharmacy When purchasing prescriptions, be sure to always present your health insurance ID card first to ensure proper processing of your charges. You may pay with your CareFlex Benefits Card, or pay out of pocket and request reimbursement from your account. Save your itemized receipts to submit as documentation. IIAS (Inventory Information Approval System): technology used by retailers to ensure benefit card transactions are eligible health expenses. Every item in the store's scanner database is flagged for plan eligibility. Note: no documentation will be required for verification of expenses purchased at a merchant with IIAS. 90% Rule: certifies at least 90% of gross sales in the prior tax year were for eligible health expenses. Note: you will be required to submit documentation to verify expenses purchased at a merchant who is 90% certified.

8 Changing an Election The elections you make at the beginning of the plan year will remain in effect until the end of the plan year. Changes to elections are only permitted if your family status changes. A change in family status is generally defined as a birth, adoption, or death of a dependent; marriage or divorce; or if you or your spouse experience a change in employment. Acceptable changes in status for a Dependent Care Spending Account include a change in the child care/elder care provider or a significant change in the cost of coverage, such as a cost increase charged by your current daycare provider. A change in status allows a participant to increase or decrease an election amount consistent with the event. Changes to an election must be made within 30 days of the date of the status change. CareFlex will verify that your event qualifies, requesting additional documentation if necessary. The IRS allows pre-tax contributions as long as benefits do not favor highly compensated employees. Testing will be completed following the open enrollment period to verify benefits do not disproportionately favor highly compensated employees. Participants will be notified if elections require a change. Run-Out Period The Run-Out Period allows additional time after the last day of the plan year to submit manual claims for dates of service incurred during the plan year. Plan year funds are no longer available on the CareFlex Benefits Card after the last day of the plan year. The Run-Out Period allows time for participants to submit expenses to be manually reimbursed from available funds remaining in the plan year. [Reference your Plan Design communication for the run-out period timeframe.] Unused Account Balance Any funds remaining after the conclusion of the plan year, including the run-out period, will be forfeited. The plan does not allow for the payment of late claims or the return of unused funds. Review your employer s plan design to determine time frames for submitting claims after the end of the plan year or after you terminate employment/coverage. Settling Outstanding Previous Plan Year Expenses Your benefit card will only recognize new plan year funds. Once the new plan year begins, do not use your benefit card to pay for dates of service incurred in the previous plan year. If you receive an invoice during the new plan year for dates of service in the previous plan year, pay with another form of payment and submit a manual claim to CareFlex for reimbursement from previous plan year funds. NOTE: All reimbursement requests received after the run out period will be denied.

9 We make it easy to access and use your account funds. There are two ways to pay for eligible expenses: 1. Use Your CareFlex Benefits Card This is the simplest way to pay for eligible expenses! Pay using your Care- Flex Benefits Card and keep your itemized receipts and statements as documentation. 2. Pay Out of Pocket and Request Reimbursement: Pay using your own personal credit card, cash, or check and keep your itemized receipts and statements as documentation. Then, log on to your online account to file for reimbursement. Upload documentation to your online claim or print the claim submission form and or fax documentation. Or, you can , fax, or mail a reimbursement request form with documentation to CareFlex. Appropriate documentation for Health Care expenses includes: a prescription label, an itemized receipt (must include the provider name, date and description of expense), an itemized provider statement (must include the provider name/address, patient name, date of service, description of service, and patient responsibility), or a medical insurance Explanation of Benefits (EOB). NOTE: Cancelled checks, credit card receipts and/or non-itemized receipts are not acceptable proof of services. The same rules apply for Dependent Care expenses. However, the Reimbursement Request Form can act as a receipt from the provider when the provider completes, signs, and dates the form. If there is not a provider signature, you must submit a detailed provider invoice or statement. [Note: Provider Tax ID or Social Security Number required.] If your dependent will be in the same day care for the entire plan year, a Dependent Care Provider Form can be completed and signed by the provider and submitted to CareFlex. Participants are responsible for notifying CareFlex if a change is made to the dependent care provider. CareFlex sends notifications to participants who have provided their address. For online claims, a notification will be sent once you file a claim notifying you that the claim has been received. Another will be sent once your claim has been reviewed and processed. For paper reimbursement requests, an will be sent once the claim has been entered in our system. Participants can track their claims through the CareFlex Participant Portal. Access your account online! Go to com/careflex/. Sign in with your Username and Password. If it is your first time visiting the site, select Register in the top right of the page to create access. Instructions for creating online access can be downloaded from the CareFlex website

10 How do I keep track of my account balance? You can track your account online through the CareFlex Participant Portal careflex/. Instructions for creating online access can be downloaded from the CareFlex website What is the CareFlex Benefits Card? The CareFlex Benefits Card is a stored value card that uses funds directly from your Flexible Spending Account. Your benefit card is activated upon its initial use for eligible expenses. Present your card to pay for services to providers accepting credit cards. The benefit card is a signature based debit card and can be used as a credit card or debit card. There is a PIN number associated with the card that can be accessed through the CareFlex Participant Portal. The card swipe process works like any MasterCard transaction, but will only work to transfer funds for properly coded transactions. Can I order a benefit card for a dependent? It is not necessary to have a benefit card for dependents, but sometimes useful for spouses or dependents away from home. To order a benefit card for an eligible dependent, please complete an Additional Card Request Form (form can be downloaded from the CareFlex website The completed and signed form can be ed, faxed, or mailed to CareFlex. How to plan an election? Calculate the total dollar amount you expect to spend on health care expenses and dependent care expenses (if applicable) over the course of the plan year. [A simple worksheet can be downloaded from the CareFlex website to assist you in this process.] Once you have determined your annual expenses, divide that amount by the number of times you are paid in a year. The same amount will then be deducted from your paycheck on a pre-tax basis each pay period. Who is the Plan Administrator? Plans are administered by CareFlex LLC, an administrative services company. CareFlex manages the plans and issues the CareFlex Benefits Card. CareFlex conducts audits on purchases made with the card and will request documentation as needed to maintain compliance with plan rules. For additional information, please contact 205 West Dares Beach Road, Prince Frederick, MD Toll Free Phone (888) / Fax (410) / support@careflex.com