for employers Quick Reference Guide for Plan Administrators of Personal Funding Accounts inside:

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1 for employers Quick Reference Guide for Plan Administrators of Personal Funding Accounts inside: Welcome... 2 Implementation of Personal Funding Accounts... 4 Steps for Employers... 4 Steps for Employees... 5 Group Setup and Launch... 6 Premera Setup... 6 Administration of Personal Funding Accounts... 7 Employer Dashboard... 7 Participant Access to Online Account... 7 Ongoing Administration Employer... 8 Eligibility Reporting... 8 Contribution Transmittals... 8 Weekly Claims Funding... 9 HSA Funding... 9 Reports... 9 Ongoing Administration Premera Administration Billing Member Claims Claims Processing Ongoing Administration Participant Managing Accounts Receipt Requirements Payment (Debit) Cards Claim Substantiation Definitions Contact Information... 16

2 Welcome We re pleased to be your choice for Personal Funding Accounts and hope this guide can be a useful tool in making administration as effortless as possible. 2

3 This Guide will provide you with the information that you need to set up and administer the Personal Funding Accounts you have selected. Selecting Premera as your administrator for Personal Funding Accounts will make life easier! Your monthly eligibility health plan reporting also provides the data needed for your funding accounts, thus simplifying the process for you. Other updates to employee information that you currently provide will also be used for Personal Funding Account updates. This means that the only additional reporting needed for Personal Funding Accounts is for annual elections and ongoing contributions. Detailed information on elections and contributions is provided later in this Guide. Note: This information is not intended to provide tax or legal advice. Employers and their employees should consult with their own legal or tax advisors regarding their personal circumstances before taking action. Advice, if any, included in this material was not intended or written by Premera to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on any taxpayer. 3

4 Implementation of Personal Funding Accounts Steps for Employers 1. Complete these documents with your sales representative or producer Funding Account Setup Information This form provides the details of the Personal Funding Account(s) you have selected, including whether or not you have selected a healthcare payment (debit) card. Electronic Funding Authorization This form provides the information Premera needs to complete the Automated Clearing House (ACH) transactions that fund your account(s). Funding Account Administrative Services Agreement Please sign and return the agreement promptly. This contract explains how Premera will administer your funding accounts, including terms and conditions, and roles and responsibilities of each party. Read the Agreement carefully and contact your Premera sales representative if you have questions. 2. Submit implementation information Submit these forms to Premera: Funding Account Setup Information Form Electronic Funding Authorization HSA Transfer Forms Completed by employees who wish to transfer funds from another HSA account Submit eligibility information for employees who have chosen Personal Funding Account(s) by one of the following methods: Manual Submit completed Funding Account Enrollment and Change Applications. Electronic Submit the Premera enrollment spreadsheet (ask your sales representative for a template). 834 File Very large groups who are set up to transmit 834 files may use this method. This method typically involves a long lead time and IT resources. 3. Fund your accounts An automatic withdrawal from your bank account via ACH will provide initial funding for the Personal Funding Accounts. See your sales representative for details about required minimum funding (RMF) to cover daily payment card transactions and employee reimbursements. Note: The development and distribution of ERISA plan documents are your responsibility as the plan sponsor of your funding account(s). Your Premera sales representative can provide a template Summary Plan Description as a starting point. This can be included with ERISA information you include in any member benefit booklets you might produce. In order to realize the full tax advantages of your Personal Funding Account(s), it is critical that you comply with all current tax laws and other regulations. Please consult your legal counsel regarding your plan document needs. 4

5 Steps for Employees 1. Employees complete your health plan enrollment process You may use your automated enrollment service, or application form if it provides the information we need. Or, we can provide a Personal Funding Account Enrollment and Change Application to capture the required information. 2. Employees make annual elections for Health FSA and Dependent Care FSA contributions Employees who choose these accounts must indicate their irrevocable annual election amount and authorize you, as their employer, to make payroll deductions under your Section 125 (Cafeteria) plan. 3. Employees make annual elections for HSA contributions Employees who choose a qualified high deductible health plan may also indicate their annual election amount, if any, and authorize you, as their employer, to make payroll deductions. Note: All Personal Funding Accounts are established in the name of the employee. Unless your plan document states otherwise, employees may use funds in their accounts to pay for eligible expenses for qualified family members. 5

6 Group Setup and Launch Premera Setup FSA and HRA For Health and Dependent Care FSAs, and HRAs Premera will determine the minimum funding level once your accounts have been established and approximately two weeks before the effective date. The minimum funding level is typically ten percent of the total annual employer and employee contribution amount. Funds will be pulled via ACH from the bank account you included on your Funding Account Setup Information form. An will notify you of the amount approximately 24 hours before the funds are transferred. The funds will be used for claims payments during the plan year, and the minimum balance will be replenished weekly. HSA For HSA accounts, no pre-funding is required. Instead, HSAs are funded each time HSA contributions are reported to Premera (most commonly at the time you run payroll). Premera will enter your group and participant eligibility information into our system. For HSA accounts, we will transmit participant information to our banking partner, UMB Bank.* Accounts will be opened automatically to ensure that all participant accounts are set up correctly at UMB Bank. This enables reported contributions to be posted and deposited correctly and does not require any action by your employees. HSA Fund Transfer to UMB Bank Premera may, upon request, coordinate a bundled transfer of HSA funds as part of the initial group implementation. This is only available for participants who are covered as employees of the employer s health plan. Coordination is not available for participants who are allowed by the employer to either a) waive coverage, or b) choose to be covered as a dependent based on their qualifying relationship with another employee. Welcome Kits Welcome Kits will be mailed to participants after your accounts have been set up and participant information has been entered into the system (approximately 5 10 days after enrollment is processed). If you offer a payment (debit) card, the member will receive the Welcome Kit and payment card to use for the chosen Personal Funding Account(s). If you do not offer a payment (debit) card, the Personal Funding Account information can be included in your health plan Welcome Kit. Availability of Funds Note that fund availability for employees varies by account type and setup. For example, you may choose to make the annual contribution amount for HRAs available at the beginning of the plan year, but Dependent Care FSA funds can only be accessed in an amount equal to the current balance in the account. See your sales representative for specific details. *UMB Bank is not associated with Premera Blue Cross 6

7 Administration of Personal Funding Accounts Employer Dashboard Existing Premera customers completing a renewal will have immediate access to the Employer Dashboard for Personal Funding Accounts. New customers will first visit premera.com to access the employer web portal. Subject to timely submission of setup information, the Employer Dashboard for Personal Funding Accounts will be available through a link on this portal no more than two weeks after the effective date. Please contact your company s group benefits administrator to learn how to access the employer web portal and to obtain the required PIN. Use the Employer Dashboard to report contributions and produce reports.* Follow these steps to access the Employer Dashboard: Log in as an Employer at premera.com Click on Employer Management in the left navigation Participant Access to Online Account When participants receive their Welcome Kits, they will be able to visit premera.com to view account information. Participants follow the access information in the Welcome Kit to do the following online: Check account balance(s) View payment card transactions (if applicable) Complete profile information, such as: Set up direct deposit Select click-to-pay, if desired Select payee Approve claims for payment, if offered Enter a new claim for reimbursement by check or direct deposit View the status of a claim Check to see if receipts are required for any claims Click on Profile tab on top navigation Click on any Account Type listed under Funding Accounts *Please note that all viewable member-level information is compliant with HIPAA. 7

8 Ongoing Administration Employer Eligibility Reporting Report your updates monthly via the same process you used for health plan eligibility paper application, online employer portal, spreadsheet or electronic file. These updates may include: Address changes New additions Terminations The following changes may only be submitted via the Funding Account Enrollment and Change Application, spreadsheet or electronic file: Health FSA election amount following a qualified change in status Dependent Care FSA election amount following a qualified change in status Contribution Transmittals Contribution reporting is based on the schedule you established at implementation, and often follows your payroll schedule. Premera will request an ACH transfer each week for Health FSA, Dependent Care FSA, and HRA claims paid. The ACH transfer for HSAs is based on your contribution reporting cycle. HSA and Dependent Care FSA contributions both employer and employee must be reported each time they are made. You may choose, but are not required, to report Health FSA contributions as this gives you more reporting options from the Employer Dashboard. For detailed information about contribution transmittals, ask your Premera sales representative. Choose one of these methods for reporting contributions: Online Employer Dashboard Log in to the Employer Dashboard (see page 7) Click on Contribution Management Click on Transaction ID for the upcoming cycle Report current contribution amounts for each employee account: HSA: You can enter employer and employee contributions separately. Expected Amount will show $0. Enter correct amount as Current Contribution. Dependent Care FSA (DCAP): Expected Amount is calculated from annual election. Make changes to Current Contribution as needed. Changes: The changes you make are for the current cycle only and are not saved for future cycles. Click Recalculate after entering all contributions Click Approve Contributions Verify information is correct, then click Next Thank you message confirms your submission Contribution Spreadsheet Use the template supplied by your Premera sales representative Electronic File (834) Select this method only if you utilize 834 files for other updates to Premera 8

9 Weekly Claims Funding Funds are transferred weekly from your bank account via ACH to cover claims for the following accounts. Visit the Employer Dashboard if you need to designate a different bank account. Health FSA Dependent Care FSA HRA To estimate your weekly funding amount: Log in to the Employer Dashboard (see page 7) From the Reports menu, click on Weekly Claims Detail Select an invoice with end date of Current and click Next View invoice details, such as Total which is the estimate of your weekly funding amount You will also know your weekly funding amount from an we send you the day before each transmittal. HSA Funding HSA accounts are funded via an ACH transaction each time contributions are reported to Premera. Therefore, funding follows the same schedule as contribution reporting, typically coinciding with your payroll cycle. Reports A variety of reports are available from the Employer Dashboard: Participant account balance (only HIPAA-compliant data is shown) Weekly claims detail Claims needing documentation Paid claims Savings account forfeitures Rejected claims requiring refund from employees End-of-year spending account statements 9

10 Ongoing Administration Premera Administration Billing Premera will bill you for the administration of your Personal Funding Accounts monthly, on or about the 20th, based on participants effective on the 1st of the month. Please report participant terminations promptly as administration fees are based on enrollment as recorded in Premera s system. Billing credit is not given for funding account fees based on retroactive terminations. Annual fees are included in the first monthly administrative billing of the plan year. This bill is to be paid separately from your medical premiums. Send payments to: Premera Blue Cross Complementary Products PO Box Seattle WA Member Claims Member claims received online or by paper are processed daily as received. All claims are batched and paid weekly. Premera will make reasonable efforts to recover ineligible funds for FSA and HRA accounts either directly from the participant or via reduction to a future funding account payment. Recovered funds will be credited to the employer to reduce the next weekly claims funding amount due. In the event we can t recover an ineligible payment, we will report this to the employer for appropriate action. Claims Processing For Streamlined Claims Option Premera will automatically create funding account claims each week based on eligible expenses from health plan claims paid. This greatly reduces the need for employees to manually submit claims for reimbursement. For example: Premera pays a medical claim that requires the employee to pay $100 towards deductible, and this is an eligible expense under the employee s funding account. Premera automatically creates a funding account claim for that $100. Exceptions to Streamlining In certain cases, we are prevented from streamlining charges based on regulations or the need for additional documentation. Some claims excluded from streamlining may be eligible for reimbursement by manual submission. More information is available online in the participant FAQs. The following types of claims are not streamlined and may require manual submission: Coordination of Benefits (COB) These claims must be processed by both the primary and secondary healthcare plans prior to reimbursement. Domestic Partner/Child of Domestic Partner Premera is unable to determine the tax status of the member, as required by the IRS, at the time the claim is processed. Disallowed Health Plan Claim Premera is unable to determine if disallowed amounts may be eligible expenses under the funding account. Privacy for Dependents Claims for dependents over a certain age and all spouses are protected by HIPAA or privacy rules. Sensitive Diagnosis, Procedure or Drug Claims such as those related to STDs, HIV and AIDS, chemical dependency, reproductive health, genetic information, and mental health are considered sensitive and will not be streamlined. Ineligible Expenses Claims for expenses not allowed in the funding account plan design are not streamlined. 10

11 Ongoing Administration Participant Managing Accounts Online Participants have access 24x7 to their Personal Funding Accounts, including UMB Bank HSA accounts, online through premera.com. Claims Submissions Participants can enter claims online (if a payment card was not used and the claim was not streamlined). Paper claim forms are also available on request for participants without Internet access. Tracking Claims The status of individual claims is available online. This is also where a participant can learn if additional documentation is needed. Personal Options Certain options are available online for participants to select. These may include, depending on the funding account plan design, preferred reimbursement method, click-to-pay or payee choice. Claims Payments The participant may choose payment by check or direct deposit. The default is by check to the participant. Check stubs include information on what is being paid. For payments made directly to providers or by direct deposit, details are available online. If you have chosen the click-to-pay option, participants must go online to select which claims are paid from their personal funding account. Receipt Requirements The IRS requires that online and paper claims be substantiated with detailed receipts that include the date of service, provider s name, patient s name, type of service and the amount paid. For online claims, participants can print a cover sheet from their online account. The cover sheet identifies the claim using a bar code. The participant can return the cover sheet with receipts by scanning and uploading to the website, or by fax or regular mail. For manual claims, Premera may request receipts to validate claims for FSA and HRA accounts. Participants need to provide receipts when requested. Get the Latest You can register to receive additional news and information about Premera Blue Cross and your healthcare benefit plans! Just send us an to employer.relations@premera.com. HSA Statements Participants with HSA accounts will receive statements from UMB Bank monthly for accounts with activity, or quarterly if there is no activity. Information on investment options for HSA account balances will become available online once minimum balances are met. 11

12 Payment (Debit) Cards Employers have the choice of whether or not to offer a payment card. Payment cards are not available for Dependent Care FSAs (DCAP). HRA plans can be designed to support payment cards. This debit card, issued by UMB Bank,* is widely accepted by providers and retailers. The card can only be used for qualified healthcare expenses as outlined in your plan. Additional Cards Each participant is issued one card. The participant may request additional cards for a spouse or dependent, or replacement cards through their online account or by calling customer service at A small fee for additional cards will be deducted from the participant s funding account. When requesting a card in a dependent s name, the participant will be asked to provide the dependent s name, Social Security Number, and date of birth. Approved Merchants Visit premera.com/merchants for a list of merchants who accept the debit card. This list is continually updated as additional merchants are added. *UMB Bank is not associated with Premera Blue Cross 12

13 Claim Substantiation The IRS requires substantiation for all FSA and HRA claims but, currently, not for HSA expenditures. However, participants should always keep all their receipts related to funding account payments as they may be needed for tax preparation or a tax audit. Auto-Substantiation Many claims are auto-substantiated, but for those that are not the participant must submit receipts. Recurring claims with the same dollar amount and at the same provider only require receipts for the first submission. If you have selected a payment card with your funding account plan, Premera will use the claims data to substantiate purchases made with the card. In most cases, participants will not need to submit receipts. Stores with the Inventory Information Approval System (IIAS) automatically check to ensure items paid for with the payment card are qualified healthcare purchases. Manual Substantiation Some payment card purchases, however, will require the participant to submit documentation. Premera will send three requests for substantiation. If the information is not provided or it shows the item was not a qualified expense, it will be deemed ineligible. If no action is taken following requests for substantiation, the payment card will be deactivated. Once the participant resolves the substantiation, the card will be reactivated. Participants may return the funds or they may be withheld from future claims. 13

14 Definitions Personal Funding Accounts IRS-approved health funding accounts Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), and Health Savings Account (HSA) from which members can pay allowed expenses. Flexible Spending Account (FSA) A tax-advantaged account that allows employees to use pre-tax dollars to pay for out-ofpocket, qualified medical or dependent care expenses. Employees (and employers) choose how much money to contribute to an FSA at the beginning of each plan year. Funds can be accessed throughout the year. FSAs are ledger accounts owned by the employer. Funds unused at year-end are lost by the employee. There are two types of FSA accounts: the Health FSA and Dependent Care FSA (DCAP). A Health FSA can cover medical, dental or vision expenses that you would otherwise pay for out-of-pocket. Common qualified expenses covered by a Health FSA may include: Health plan deductibles, coinsurance or copays Vision care services Dental care services Hospital charges Laboratory fees Prescriptions and certain over-the-counter items A Dependent Care FSA allows the employee to pay for certain expenses for day care, pre-school and elder care (unless it is for medical care) on a pre-tax basis. Expenses must be for dependents under the age of 13, or physically or mentally incapable of caring for themselves, and necessary for the employee to work. Health Reimbursement Arrangement (HRA) A tax-advantaged account funded by an employer to help cover healthcare costs. Only the employer can contribute to the HRA. Participants can use this money to pay for any qualified healthcare expense incurred by them or their dependents. There are different kinds of HRAs, each covering a different set of eligible healthcare expenses based on the employer s plan design, which may include: Health plan deductibles, coinsurance or copays Vision care services Dental care services Hospital charges Laboratory fees Prescriptions Certain over-the-counter items 14

15 Health Savings Account (HSA) An individually owned, fully portable, tax-advantaged account that allows the employee to save and help pay for current and future medical expenses. An employee can open an HSA if they are enrolled in a qualified, high-deductible medical plan and not covered under another medical plan (including their spouse s) nor covered by Medicare. Employees also cannot be claimed as a dependent on someone else s tax return. An HSA can provide a triple tax advantage: Contributions are made on a tax-advantaged basis Any unused funds carry over from year-to-year and grow tax-deferred When used to pay for qualified medical expenses, funds can be withdrawn tax-free High Deductible Health Plan (HDHP) A health benefit plan that typically has a higher annual deductible in exchange for lower premiums when compared to traditional health plans. To be a qualified HDHP and therefore compatible with Section 223 of the IRS Code, Premera s HDHPs meet the minimum deductibles and out-of-pocket maximums required by current tax regulations. High deductible plans may offer first-dollar coverage of preventive care and still remain qualified. Contribution The amount of employee payroll deduction and the amount of employer contribution to be posted to participant accounts for Dependent Care FSA and HSA accounts. Allocation The total annual amount of money that the employer makes available to a participant in an HRA. This amount is defined by rules based on the health plan and other information you provide during the implementation process. Election Amount The dollar amount that the employee chooses as their annual contribution to their FSA or HSA account. It is also used to refer to the annual employer contribution to employee Health FSAs, if applicable. This information is necessary for the employer to set up payroll withholding for FSA and HSA accounts. 15

16 Contact Information Group Sales Western Washington, Yakima and Klickitas Counties Eastern Washington and Northern Idaho Customer Service For questions related to benefits or claims processing, please contact our customer service team at Help Desk for Online Management Services Business Offices Western Washington Premera Blue Cross th SW Mountlake Terrace, WA Eastern Washington Premera Blue Cross 3900 East Sprague Spokane, WA Claims Submission Submit claims for Personal Funding Accounts online through the secure member portal. For paper claim forms, members may call premera.com Premera Blue Cross is an Independent Licensee of the Blue Cross Blue Shield Association ( )