Flexible Spending Accounts

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Flexible Spending Accounts

• San Mateo County
• Paul Hackleman

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What is a Healthcare FSA?

• Allows Participants to Recover Out-of-Pocket
  Payments for Healthcare
• Accounts Are Funded from the Participants
  Pre-Tax Payroll Deductions

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How Do FSAs Work?

• Participant Determines Payroll Deduction
• Employer Takes Deductions to Fund Selected FSA
  Accounts
• Participant Submits Eligible Claims and
  Documentation to Mangrove Employer Services for
  Reimbursement

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How Do FSAs Work?

• Mangrove Reviews / Processes Claims
• Mails / Directly Deposits Bi-Weekly Check
• Use of Debit Card
• County pays for first two cards
• Additional cards are 5 each.
• Quarterly Statements
• 24 hour online access to FSA account up to the
  minute information

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How Will FSAs Benefit You?

• Pre-Tax Payroll Deductions Reduce Your Taxable
  Income
• Increases Your Spendable Income Since Services
  Are Paid For from Pre-Tax Dollars

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A True Pre-Tax Deduction

• Contributions are tax free including
• Federal
• FICA
• State

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Example - 60,000 Income
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Who is Eligible?

• Regular Employees 20 Hours per Week
• Participation Begins
• Current Employees January 1 (enroll during open
  enrollment)
• New Employees First of a Month Following 28
  Days of Employment

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Reimbursement Account

• Reimburses Out-of-Pocket Healthcare Expenses
• Incurred by Employee, Spouse, or Dependents
• Benefit Is Pre-Funded By Your Employer

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How Much Can I Contribute?

• Healthcare Account
• Minimum 25 per year
• Maximum 5,000 annually

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What are Eligible Expenses?

• Incurred for the diagnosis, cure, mitigation,
  treatment, or prevention of disease, and for
  treatments affecting any part or function of the
  body
• Incurred within the plan year
• Expenses to promote general health are generally
  not deductible

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Eligible Healthcare Expenses

• Anesthetist
• Chiropractor
• Dental
• Glasses Contacts
• Eye Exams
• Hospitalization
• Laboratory

• Fees/Co-Pays for
• Physician
• Psychiatrist
• Psychologist
• Surgery
• X-Rays
• Diagnostic
• Acupuncture
• Ambulance

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Eligible Healthcare Expenses

• Fees/Co-Pays for
• Vaccines
• Artificial Teeth
• Birth Control Pills
• Modifications to home or car due to
  disabilities
• Guide Dog cost and maintenance
• Fertility Treatments

• Nursing Services
• Medical monitoring and testing devices
• Psychoanalysis
• Travel Expenses _at_ 22 cents per mile
• Lodging 50 per person (100 per day max.)
• Smoking Cessation

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Eligible Healthcare Expenses

• Fees/Co-Pays for
• Prescriptions
• Hearing Aids Batteries
• Nursing
• Obstetrician
• Sterilization
• Limb/Breast Reconstruction
• Nursing Home

• Orthopedic Shoes
• Orthodontic
• Therapy for Drug/Alcohol Addiction
• Tuition for Learning Disabled
• Lasik Surgery
• Over-the counter drugs

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Over-The-Counter Drugs

• Revenue Ruling 2003-102 (9/3/03)
• Product must
• Be for medical care
• Satisfy definition of eligible expense
• Cannot be merely beneficial to health. (Vitamins
  / Supplements excluded)
• Be medicine or drugs (no toiletries / cosmetics)
• Be documented by receipts showing name and type
  of product purchased

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Ineligible Expenses

• Unless Prescribed By Physician and Documented -
  requires letter of medical necessity from
  physician
• Smoking Cessation Programs
• Lamaze Classes
• Exercise Equipment
• Cosmetic Services
• Weight Loss Programs

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Ineligible Expenses

• Estimated Expenses
• Premiums for Insurance Benefits
• Already Pre-Tax
• Expenses Paid By An Insurance Company or
  Submitted to Spouses Employer Sponsored FSA
• Expenses incurred prior to the start date of the
  FSA plan or incurred after your termination
  from the FSA plan.

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Termination of Employment

• Once an employee terminates employment
• No more incurred expenses are eligible
• Need to submit receipts within 60 days
• Importance of Planning
• Retirement / Termination
• Calculation of contribution

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Benny? Makes Them EASY to Use!
Introducing The Benny? Debit Visa? Cardfor All
Your Qualified FSA Expenses
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Benny Debit Card

• Other than for approved co-pays, receipts may be
  required
• Letter will be sent in 30 days from transaction
  if receipts are required.
• If receipts are required and not received in 60
  days letter is sent and the card is turned off
  and purchase may be deemed ineligible.

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How Does It Work?

• At the time of payment for prescription or office
  visit

And, payment is automatically deducted from your
FSA account.
Then, save your receipts in an envelope.
Its that EASY!
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Benny Debit Card

• For Current Participants
• A new card will not be sent
• If enroll dependent one additional card at no
  charge
• Active January 1, 2008 New Balance

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Benny Debit Card

• No required receipts for co-pays
• Doctors offices
• Pharmacies
• Hospitals
• Co-pay amount must match your health plan.
  Copies of receipts should be kept.

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Benny Debit Card

• Can be used at the following as long as they
  accept Visa
• Doctors office
• Pharmacy
• Hospital
• Dentist
• Vision provider

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Benny Debit Card

• Two cards will be received at no cost to you.
• If additional cards cost.
• You Need to ACTIVATE and SIGN the Cards
• To activate call the number on the sticker on the
  Card or log onto www.benefitone.com
• Each eligible user signs his or her name.

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Benny Debit Card

• Improvements over Prior Debit Card
• More Automatic Adjudication
• Data Matching
• Retrospective Files
• Recurring Expenses
• Enhanced Co-pay Matching System

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Plan Rules

• Expenses Must Be Incurred (Services Rendered)
  While An Active Participant
• Funds Left In the Account at the End of the Plan
  Year Are Forfeited
• Run Out Period (90 days)
• Reduction in Taxable Income May Result in Reduced
  Social Security Benefits

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Plan Rules

• Cannot Change Deduction Unless You Experience a
  Family Status Change (must be reported within 30
  days of the event)
• Marriage or Divorce
• Birth or Adoption
• Death of Spouse/Dependent
• Change in Employment Status of Spouse or Self
• Involuntary Change in Medical or Dental Coverage
• FMLA or Non-FMLA Leave

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How Do I Enroll?

• Complete the Estimated Expenses Worksheet
• Return a Completed Election Form to Human
  Resources - Pony HRD-133
• Current Participants Re-enrollment Process

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The Better You Plan The More You Will Save!