HealthEquity FSA/DCRA Flexible Spending Account/Dependent Care Reimbursement Account

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1 HealthEquity FSA/DCRA Flexible Spending Account/Dependent Care Reimbursement Account FSA/DCRA Employer Enrollment Guide Easy as 1, 2, 3 HealthEquity makes implementing FSA/DCRA easy. This guide provides detailed steps for the three implementation phases: Phase 1: Preparation Phase 2: Implementation Phase 3: Go Live Select Blue Shield health plan with HealthEquity FSA Complete group setup, FSA application, and three-party agreement Send group setup to HealthEquity Send election amounts to HealthEquity Load enrollment data and create FSA accounts Send employee welcome materials 45 days Preparation Implementation Go Live Distribute FSA application Review FSA application Send employee enrollment to Blue Shield and HealthEquity Send enrollment file to HealthEquity Conduct customized employer portal orientation Send initial funding Table of Contents Phase 1: Preparation... 2 Phase 2: Implementation... 3 Phase 3: Go Live... 4 FSA/DCRA Eligibility and Election Standard Data Flow... 5 FAQs... 6 Resources... 9 Blue Shield is an independent member of the Blue Shield Association

2 Offering your employees the best The Blue Shield and HealthEquity solution is the leading provider of healthcare account administration. Single account view of all HealthEquity accounts and Blue Shield healthcare transactions* Dedicated employer team Customized employer portal 24/7/365 dedicated customer service Convenient plan ordering or card stacking available for multiple reimbursement accounts Phase 1: Preparation 1. Employer selects Blue Shield of California plan with FSA/DCRA powered by HealthEquity (45+ days prior to effective date) Employer works with Blue Shield account manager to finalize selection of health plans offered to employees 2. Blue Shield distributes FSA/DCRA application to the employer/broker (45+ days prior to effective date) Review detailed timeline with Blue Shield account manager and determine milestone dates Review the FSA/DCRA plan offerings and individual features documents, available at All reimbursement plan applications have an optional FSA/DCRA section that can be completed to implement an FSA/DCRA HRA (health reimbursement arrangement) Plan 3 application should be used by default unless also implementing an additional HRA plan For additional support in application completion, call , option 3 or raclientservices@healthequity.com Blue Shield account manager provides an overview of available educational and support materials Educational resources available at 3. Blue Shield completes group setup, FSA/DCRA application is sent to HealthEquity, and employer signs three-party agreement (30 days prior to effective date) Blue Shield assigns new billing units for members who are eligible for an FSA/DCRA Complete the Blue Shield group setup form, and to cdhproduct@blueshieldca.com Blue Shield account manager sends completed FSA/DCRA application to HealthEquity at raclientservices@healthequity.com Blue Shield account manager works with employer to sign third-party agreement * Discuss exclusions to integrated claims with a Blue Shield account manager.

3 Phase 2: Implementation 4. HealthEquity reviews FSA/DCRA application with employer (2-3 days after receipt of application) Upon receipt of FSA/DCRA application, HealthEquity RA Client Services contacts employer to review the application Discuss methods for data transmission from employer to HealthEquity for the following: FSA enrollment data to HealthEquity for participants who did not select a Blue Shield plan DCRA enrollment data to HealthEquity FSA/DCRA election amounts 5. Blue Shield sends employer group setup form with unique billing units to HealthEquity (25 days prior to effective date) 6. Employer has employees enroll in the plan and sends employee enrollment to Blue Shield and HealthEquity (25 days prior to effective date) Employer sends employee enrollment to Blue Shield via established group enrollment process for FSA particpants who also selected a Blue Shield plan Employer sends: FSA enrollment data to HealthEquity for participants who did not select a Blue Shield plan DCRA enrollment data to HealthEquity 7. Employer sends election amounts to HealthEquity for FSA/DCRA (20 days prior to effective date) Employer sends FSA/DCRA election amounts for all participants to HealthEquity 8. Blue Shield sends enrollment file to HealthEquity (20 days prior to effective date) Blue Shield sends initial enrollment file to HealthEquity via secure FTP After initial setup, Blue Shield sends daily enrollment and claims data files to HealthEquity via secure FTP 9. HealthEquity uploads enrollment file into system and performs FSA account setup (1-3 days after receiving enrollment file) Enrollment information is received by HealthEquity Enrollment information and election amounts are loaded then the employer portal is created HealthEquity RA Client Services completes unique plan setup according to plan application HealthEquity creates individual member accounts

4 Phase 3: Go Live 10. HealthEquity s employer welcome kit and conducts welcome call and portal orientation with employer (5-7 days after receiving enrollment file) HealthEquity RA Client Services contacts employer to conduct welcome call with portal orientation and training to include reports, funding of FSA/DCRA accounts, paying invoices, Web messaging and eligibility management 11. HealthEquity mails welcome kits and HealthEquity VISA health account cards (if applicable) to members (8-14 days after enrollment file is loaded) HealthEquity mails welcome kits to all members HealthEquity Visa health account card is mailed separately, where applicable Account holders are mailed a debit card for themselves and spouse if included on initial enrollment file Additional cards for dependents can be requested by calling member services at First three cards for each account are free of charge, each additional card incurs a fee, outlined in employer welcome materials 12. Employer processes initial FSA funding to HealthEquity (By plan effective date) Employers use their HealthEquity Employer Portal to initiate an electronic funds transfer, such as ACH, from their bank account to HealthEquity to fund their reimbursement accounts Ongoing funding occurs based on account usage and reimbursement account funding option selected A custom employer portal is created by HealthEquity. To access the portal, go to This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC. HealthEquity, Inc. is the custodian of your health accounts and is independent from Blue Shield of California. Neither HealthEquity nor Blue Shield of California provides medical or tax advice. Content should not in any case replace professional medical or tax advice. Blue Shield and the Shield symbol are registered marks of the BlueCross BlueShield Association, an association of independent Blue Cross and Blue Shield plans. Copyright 2012 HealthEquity, Inc. All rights reserved. HealthEquity, the HealthEquity logo, and Building Health Savings are service marks of HealthEquity, Inc.

5 FSA & DCRA Eligibility and Election Standard Data Flow Employer Blue Shield HealthEquity This model represents the FSA data flow for employer account setup. Please note that Integrated means that Blue Shield eligibility and claims will be sent directly to HealthEquity and non-integrated means the relationship is direct between the employer and HealthEquity. Integrated: Employer will still be required to submit FSA election amounts and Payroll deposits directly to HealthEquity Non-Integrated: All DCRA (dependent care FSA) and any FSA where the employee waives BSC medical Communicate group/billing units to employer Blue Shield will setup billing units for FSA Note that FSA accounts without a Blue Shield medical plan and all DCRA are sent directly to HealthEquity from the ER and a BU may not be setup Eligibility & Election Data for Account Creation Employer collects OE data from employees Employer sends eligibility to Blue Shield for medical and any associated HealthEquity accounts (medical FSA) Blue Shield creates Employer Group Set-up files with FSA marked Y for each applicable Billing unit Employer sends DCRA and non-medical FSA enrollment directly to HealthEquity Employer sends HealthEquity election information via portal or file (group size dependent) Individual enrollment loaded into Blue Shield system Employer group Setup file Non-Blue Shield integrated FSA/DCRA accounts are created Communicated via daily eligibility file Integrated medical FSA is set up Payroll Deposits Employer gathers payroll withholdings for FSA and DCRA Loaded into HealthEquity system

6 Questions employees may ask about HealthEquity FSAs/DCRAs Q: Are there different types of flexible spending accounts (FSAs)? A: Yes. The three main types of FSAs are: A healthcare FSA for qualified medical, dental, vision, or other healthcare costs, including insurance deductibles, copayments, and coinsurance. A dependent-care FSA for child, elder, or other dependent care. A limited-purpose FSA (LPFSA) for dental and vision expenses. This type of FSA is for those who have a health savings account (HSA). Q: Who owns the FSA? A: The money is yours to use during the plan year. Ultimately your employer owns the account and any unused balances after the end of the plan year or a run-out period are forfeited back to your employer. Q: Does the money in my FSA earn interest? A: No. The money is simply set aside tax-free to be used for qualified expenses. Q: What happens to the money in my FSA if I leave my job or retire? A: There may be a run-out period when you can continue to submit expenses incurred before you left. Any balance after that is forfeited to your employer. Q: How much can be contributed to my FSA? A: While the IRS doesn t currently set minimum or maximum annual contributions for health care FSAs, your employers might. And in 2013, the IRS will set an annual contribution limit of $2,500 for healthcare FSAs. Unlike current healthcare FSA maximums, the maximum contribution to a dependent care FSA is set by the IRS. It s equal to the earned income of the employee (or spouse, if the spouse earns less) up to $5,000 per family or $2,500 for a married person filing separately. Q: Who can put money in my FSA? A: You and your employer, although employers rarely contribute to employees FSAs. Q: What is an eligible expense? A: For a healthcare FSA, deductibles, coinsurance amounts, copays, and other expenses described in IRS Publication medical and dental expenses are eligible or qualified expenses. Go to index.html for a current complete list. Premiums for health and other insurance aren t eligible. For a dependent care FSA, expenses must be incurred for the care of eligible members of your family to enable you to work, seek employment or go to school. See the complete list in IRS Publication 503 Child and Dependent Care Expenses at Contact your HR department for specifics of your plan.

7 Questions employees may ask about HealthEquity FSAs/DCRAs Q: Does the money in my FSA roll over from year to year or do I lose it at the end of the year? A: Unused funds don t roll over. There may be a run-out period when you can continue to submit expenses incurred during the plan year. Any balance after that is forfeited to your employer. Some plans offer a grace period that lets you both continue incurring expenses and submitting reimbursements after the end of the plan year. After that, any unused balance for the previous year goes back to your employer. Q: Do participants in a dependent care FSA need to report anything on their income taxes? A: Yes. They must identify all persons or organizations that provide care to their dependent(s) by filing IRS Form 2441 Child and Dependent Care Expenses, and submit it with Form Q: Who qualifies as an eligible dependent for a DCRA? A: An eligible DCRA dependent is any dependent for which an employee pays a provider to care for him/her while they are at work. The dependent must be under the age of 13 or incapable of taking care of himself/herself, and live in the employee s home for more than half of the year. Q: Can I use my FSA for eyeglasses, contacts, or LASIK surgery? A: Yes. Q: Are orthodontics claims eligible? A: Orthodontic services can be reimbursed as provided, such as monthly payments, or as payments are made as long as the payment is proximate to the actual services provided (you can t get reimbursement for last year s payments), or as a lump sum provided services beyond the current plan year aren t included. If the entire treatment is paid in one payment, you can request reimbursement during the year the payment was made, even if the actual treatment will continue into the next plan year. Q: What do I submit for an orthodontics claim? A: Submit a copy of the contract specifying start date, length of treatment, and total cost. Q: How often can I request reimbursements? A: Reimbursements can be requested as often as a qualified expense is incurred during the plan year and before the end of the run-out period (or grace period if applicable).

8 Questions employees may ask about HealthEquity FSAs/DCRAs Q: Is there a deadline for submitting requests? A: Plans typically include a time after the end of the plan year for reimbursements requests for expenses incurred during the plan year (known as a run-out period) or expenses incurred up to the end of the extension (known as a grace period). After that, unused dollars are forfeited. Consult your HR department for details. Q: What is the maximum reimbursement from a health and/or dependent care FSA? A: The entire healthcare FSA annual election amount may be available at any time throughout the plan year or on a prorated basis. Consult your HR department on the availability of funds. The dependent care FSA balance accumulates throughout the year and is only available on a prorated basis. Health and/or dependent care FSA balances are always reduced by any reimbursements made. Q: Can I use my FSA for my children s medical expenses, copays, and deductibles? A: Yes. Your FSA can be used for the qualified medical expenses of any family member who qualifies as a dependent on your tax return. Q: Can I use my FSA for non-medical expenses? A: No. Funds can only be used for qualified medical expenses or for dependent care as outlined in IRS Publications 502 and 503. Q: My domestic partner is covered on my insurance plan. Can I use my FSA for my domestic partner s medical expenses? A: If your domestic partner meets the IRS qualifications of a tax dependent, you can use your FSA funds for his/her medical expenses. Q: Can I use my FSA to pay for voluntary cosmetic surgery? A: Your FSA can be used for cosmetic surgery only if prescribed by a physician as medically necessary. Q: Can I access my FSA online? A: Yes. You can see account balance, claim transactions, request reimbursements, and manage your personal information by visiting or your specific member portal.

9 Questions employees may ask about HealthEquity FSAs/DCRAs Q: How quickly will I get reimbursed? A: Reimbursements are usually made within five to seven days of HealthEquity receiving a completed reimbursement request form and necessary documentation. Q: How can I get my reimbursement? A: You can get your reimbursement by check or direct deposit. Q: Where can I get a reimbursement form? A: Reimbursement forms are available at or your specific member portal. Q: How do I contact HealthEquity? A: You can call HealthEquity Member Services anytime at or your dedicated service line. Resources HealthEquity RA Client Services: , option 3 raclientservices@healthequity.com 24/7/365 Member Services: memberservices@healthequity.com Employer and Member Portal Website Login: Member Single Sign-on (for participants with a Blue Shield plan): HE BSC HFS EnrollGde ER