EMPLOYEE GUIDE TO FLEXIBLE SPENDING ACCOUNTS

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1 EMPLOYEE GUIDE TO FLEXIBLE SPENDING ACCOUNTS CONGRATULATIONS! You are qualified for a Consumer Driven Health Care Plan and/or Cafeteria Plan Consumer Driven Health Care (CDHC) and Cafeteria Plans refer to pre-tax medical plans that include Flexible Spending Accounts (FSA), Dependent Care Assistance Programs (DCAP) and Health Reimbursement Accounts (HRA). Please take a few moments to read this packet as it will serve as a guide to your online account setup and proper procedures for enrolling and filing claims. At Benefit Solutions, Inc. we seek out innovative approaches to serve our customers in the best ways possible. For more information, please contact us at (206) or us at flexspending@bsitpa.com. TABLE OF CONTENTS Page 2 FSA Overview 2 Tax Savings Example 3 List of Typical Qualified Medical Expenses 4 Elections and Your Tax Savings 5 Enrollment Form 6 Online Enrollment 7 Your Flexspending Debit Card 8 Tips For Using the Flexspending Debit Card 9-14 Filing and Substantiating a Reimbursement Claim Online 15 Filing a Paper Reimbursement Claim 16 Dependent Care Assistance Program (DCAP) 1

2 FSA OVERVIEW You can pay less in taxes and increase your take-home pay by signing up for a healthcare Flexible Spending Account (FSA) and/or a Dependent Care Assistance Program (DCAP). A Flexible Spending Account (FSA) allows you to set aside money for out-of-pocket healthcare expenses on a pre-tax basis. A Dependent Care Assistance Program (DCAP) allows you to set aside pre-tax dollars for dependent care expenses. These funds can be used for child-care expenses as well as expenses related to the care of any type of dependent. FSA and DCAP are Use It or Lose It. Money must be spent within the coverage period. The coverage period generally ceases upon termination of employment or end of the plan year. If you terminate employment, you may still access the funds available in your account for claims accrued prior to your termination date. Contact BSI, your administrator or access your online account for regulations on your group s grace period to submit claims. TAX SAVINGS EXAMPLE Here s a typical example of tax savings: Before FSA After FSA ($150/month) Annual Income $36, $36, FSA contributions $0.00 $1, New Taxable Income $36, $34, Federal and Social Security Taxes (assuming a 32.67% rate) $11, $11, Take-home pay $24, $24, Annual Tax Savings $0.00 $ By contributing money to an FSA, it is reducing your annual gross income. This will also reduce your Federal and Social Security tax savings because your taxes will be based on your annual gross income. Please take a moment to see what sort of annual tax savings you could be taking advantage of by enrolling in an FSA today. Remember that a FSA for Medical Expenses and a DCAP will both deduct from your total gross income, but are still two separate accounts and money cannot be commingled. 2

3 LISTS OF TYPICAL QUALIFIED MEDICAL EXPENSES This is only a partial list; these are the most typical expenses employees will pay every year with out-of-pocket dollars. An FSA will ensure you have money to pay for all these expenses and it is a pre-funded benefit. This means once you make an election, you are eligible for that full amount immediately upon the first day of the plan year. So if you need the money now, you ve got it! Qualified Expenses (partial list) Acupuncture Adoption Alcoholism treatment Ambulance Artificial limbs Artificial teeth Birth control pills Breast pump and supplies Blood pressure monitoring device Blood sugar test kits and test strips Chiropractor Contact lenses Contraceptive devices Crutches Dental treatment Dentures Dermatologist Diabetic supplies Diagnostic items and services Drug addiction treatment Egg donor fees Elastic hosiery (prescription) Eyeglasses, equipment and materials Fertility treatment Fluoridation devices Flu shots Guide dog Hearing aids and batteries Hospital services Immunization Insulin Lab fees Laser eye surgery Learning disability instructional fees (prescribed) Lodging (at hospital or similar institute) Neurologist Obstetrical expenses Occlusal guards to prevent teeth grinding Optometrist Oral surgery Organ transplant (including donor's expenses) Orthodontia* Orthopedist Osteopath fees Oxygen and oxygen equipment Pediatrician Physiotherapist Podiatrist Prenatal care Prescription medicines Preventive care screening Sterilization procedures Stop-smoking aids Surgeon Telephone or TV equipment to assist the hard-of hearing Therapy (for medical care) Transportation expenses (relative to health care) Vaccines Vasectomy Wheelchair X-rays Disclaimer: Subject to change. Some items above may require additional documentation under IRS regulations. Please refer to the IRS website for complete list. Receipts required for substantiation of expenses. *Orthodontia is a limited reimbursement. Please contact your administrator for details. Potentially Qualifying Expenses (partial list) Acne treatment (when prescribed and recommended by a medical provider) Air conditioner (when necessary for relief from an allergy or for relief from difficulty in breathing and prescribed by a medical provider) Alternative healers, dietary substitutes and drugs and medicines Automobile modifications Behavioral modification programs Chelation therapy (lead poisoning) Christian Science Practitioner Hormone replacement therapy Language training Lead based paint removal Massage therapy Nursing services Orthopedic shoes and inserts Over-the-counter drugs Psychiatric care Psychoanalysis Psychologist Special school costs for the handicapped Specialty food or beverages Tuition and travel expenses for a child with special needs at a particular school Varicose veins Vitamins Weight loss programs Wig 3

4 ELECTIONS AND YOUR TAX SAVINGS Please take a moment to plan out how many of these expenses you will be paying out-of-pocket for the year and fill in your estimates for each of the sections. Then, follow the simple math and find out what your tax savings will be. Section A: Health Related Expenses: (Estimated medical expenses not reimbursed by your health plan per year for you, your spouse and your dependents) $ Acupuncture $ Ambulance $ Alcoholism treatment $ Contact lens & supplies $ Co-pays $ Deductibles $ Dental co-pays $ Dental deductibles $ Dental surgery $ Dental x-rays $ Diabetic supplies (insulin) $ Drug addiction treatment $ Eligible hospital charges not covered by insurance $ Eye glasses $ Lab fees $ Laser eye surgery $ Medical miles, paid according to IRS annual limits. $ Non-cosmetic dental services $ Orthodontia $ Prescription expenses (co-pays) $ Routine physical $ Vision exams $ Wheelchair(s) $ X-Rays Total annual amount $ Section B: Dependent Care Expenses: Eligible dependent care expenses must be for the care of your child under the age of 13, or your spouse or other dependent(s) who are physically and/or mentally incapable of self-care. Eligible reimbursable expenses are those dependent care expenses incurred only during the time you (and your spouse, if applicable) are working, looking for employment, or attending school full-time. IRS regulations govern the eligibility of expenses. For additional information on eligible expenses, see IRS Publication 503, available from your local IRS office. Monthly $ Annual Total $ Section C: Total Section A + Section B = Total Election $ $ $ 4

5 PLEASE COMPLETE THE ELECTION FORM AND INCLUDE AN ADDRESS 5

6 ONLINE REGISTRATION The following steps need to be taken in order for Benefit Solutions, Inc. (BSI) to properly administer your plan(s). BSI will provide online access to you through ibsi, BSI s Online Benefits System. Obtaining Your Username and Password: 1.) To access your Consumer Driven Health Plan (CDHP) account online, you will need to register for ibsi via the link provided from HelpDesk@iBSIsolutions.com. The invitation will be sent to the address you provided upon election. 2.) Clicking on the link will take you to the login screen where you will create your username and password. If the registration link asks you to LOGIN and not to REGISTER, do the following: Delete your browser history and cookies Close all open browser windows Click on your registration link again 3.) Once you have completed this form you will be registered to use the ibsi online tool. To access your CDHP account, click on the Flex Spending and CDHP link located in the sidebar in the lower left of the screen. Please review your benefit election amount and familiarize yourself with the website. If your account does not open, please verify that you are not blocking pop ups. 4.) Your account can be accessed in the future by going to the website and clicking ibsi on the right side of the screen. 6

7 YOUR FLEXSPENDING DEBIT CARD A BSI Debit Card should be arriving at your home address within 7-10 days. The envelope will say Important Benefit Information Enclosed on the front. You are not required to perform any actions to activate this card. You can begin using it immediately at medical or dependent care facilities. Always get a receipt from your provider Make sure receipt has the Date of Service, Cost & Services Provided Submit your receipts to substantiate your debit card claims Debit Card Claim Substantiation Upload the receipt to the Consumer Driven Health Care website Or receipts to: flexspending@bsitpa.com Or Fax receipts to: Or Mail receipts to: Benefit Solutions PO Box 6 Mukilteo, WA Don t forget to keep your receipts. The BSI Debit Card gives you immediate access to your CDHP funds, but you are still required to substantiate most claims that are made with it. Unless you are using the debit card to pay for a recognized co-pay of your major medical plan, you will be required to show proof that your claim was a qualified medical expense. What is claim substantiation? Claim substantiation means providing proof that the claim made by you was actually a Qualified Medical Expense (See page 3 for details on qualified medical expenses). What you need to provide for claim substantiation You must have ONE of the following valid receipts to substantiate your claim: Store/Pharmacy receipt, including name of product and date of service Co-pay receipt from medical provider, including date of service Itemized bill from medical provider, including date of service, description of service and patient name 7

8 TIPS FOR USING THE FLEXSPENDING DEBIT CARD Services Rendered in the Plan year: Only services rendered in the current plan year are eligible to be charged on your BSI debit card. Submitting paper claims: Do not use the claim form if you are submitting receipts for charges with the debit card. This could result in duplication of payment, which you would then be responsible to refund. Invalid receipts: We cannot accept balance due or balance forward statements, payment on account, or credit card receipts for substantiation of claims. These do not provide us with the necessary information to determine if services that were rendered are eligible medical expenses. Using your debit card at providers: Your card will only be accepted at Inventory Information Approval System (IIAS) merchants, 90% rule merchants and most medical/dental care providers. For more information and detailed lists of providers please visit Substantiating Claims: You will receive reminders that will ask you to substantiate your claims made with your debit card. You must substantiate your debit card claims within 90 days. Unsubstantiated claims will be automatically denied and you will receive a request for repayment. 8

9 FILING AND SUBSTANTITING A REIMBURSEMENT CLAIM ONLINE The simplest and fastest method When you need to be reimbursed for an out-of-pocket medical expense or dependent care expense, we recommend using this method. It will reduce paper usage and the time it takes for you to get reimbursed for your claim. You can also use this method to substantiate a debit card charge (step 5). STEP Step 1 1 Under the Accounts tab, in the drop box, click on File Claims OR: Click on File Claim under the Actions Tab 9

10 Step 2 In the drop box choose what type of claim you are filing and click the File a Claim button 10

11 Step 3 If you have a valid receipt, you will mark this section Yes Enter in the Date when your services were rendered Enter in the exact Amount that you paid out of pocket Enter the Provider s Name Choose from the drop list for Category and Type 11

12 Step 4 Read the terms and conditions and check the box that you agree to them Check the box that you agree to the terms and Submit your claim 12

13 Step 5 Click on: Claims Requiring Receipts 13

14 Step 6 Find the claim you submitted, click the Upload Receipt Link, browse for the receipt you have saved on your computer and upload it. Receipt image file must be a *.jpg, *.gif or *.pdf file type. 14

15 FILING A PAPER REIMBURSEMENT CLAIM This claim form and others can be found on your online account under the tab FORMS. You can fax, or mail the claim form and receipt to the contact info listed on the first page. Remember, the receipt must match the date services were rendered, amount paid out of pocket and the providers name on the claim form. 15

16 DEPENDENT CARE ASSISTANCE PROGRAM (DCAP) Eligible dependent care expenses must be for the care of your child under the age of 13, or your spouse or other dependent(s) who are physically and/or mentally incapable of self-care) Eligible reimbursable expenses are those dependent care expenses incurred only during the time you (and your spouse, if applicable) are working, looking for employment, or attending school full-time. IRS regulations govern the eligibility of expenses. For additional information on eligible expenses, see IRS Publication 503, available from your local IRS office Dependent Care Assistance works almost in the same manner as the Health FSA. You can use your Flexspending Debit Card (at participating providers) or you can submit reimbursement claims online or using a paper claims form. You may also submit a REOCCURING CLAIM FORM (available online) which will allow you to receive continuous reimbursements in the equal amounts every month. If your dependent care varies each month, you will want to submit a MONTHLY DEPENDENT CARE CLAIM FORM (available online). Be sure to get your providers signature on the form each time. You do not have the full election amount available to you at the beginning of the year as you do with the Health FSA. The only amount reimbursable to you is the amount you have contributed within the Plan Year. The IRS set the limit for DCAP at $5,000 per household. Keep this in mind if your spouse also elects this type of coverage. *If you terminate employment, you may still access the funds available in your DCAP account for claims accrued prior to your termination date. Contact BSI or your administrator for regulations on your group s grace period to submit claims. 16