Download If the employee is married, but their spouse has no

2014 Flex Spending Account
Employee Enrollment Packet
Provided by:
3449 E. Copper Point Dr.
Meridian, ID 83642
(800) 786-7930
I.
WHAT IS A FLEXIBLE SPENDING ACCOUNT?
The Flexible Spending Account (FSA) is a way for employees to convert salary dollars into taxfree benefits. Under this program, employees may deposit a portion of their salary (before taxes)
into one or more individual expense-reimbursement accounts. Then, during the year, as
employees incur eligible medical, dental, vision, and/or dependent-care expenses, they send in an
"expense report," and are reimbursed for these expenses with a tax-free withdrawal from their
flexible spending account. Expenses must be incurred while participant is eligible and enrolled in
the FSA plan. Two types of expenses qualify for FSA, and each has its own account.
A. DEPENDENT CARE ACCOUNT
This account can be used to reimburse for eligible employment-related dependent-care expenses
for qualified dependents. Eligible expenses, as defined by the tax code, are expenses paid to a
person who is not an employee’s dependent, their spouse, or child under the age of 19, and that
were incurred only for the purpose of enabling the employee or their spouse to remain gainfully
employed.
If the employee’s spouse is a full-time student or incapable of self-care, and they are
utilizing the dependent care assistance plan as part of a cafeteria plan, their
payments are limited to the smallest of the following amounts:
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$5,000 ($2,500 if the employee is married, but filing separately);
the employee’s earned income; or
the spouse’s earned income, if the employee is married at the end of
the taxable year.
If the employee is married, but their spouse has no earned income, the
spouse is deemed to have earned income of $200 per month ($400 per
month if there are two or more qualifying individuals) in each month
that their spouse is either a full-time student or incapable of self-care.
Receiving payments in excess of the above limits could result in serious tax
consequences. For more information, please contact your tax professional.
B. HEALTH CARE ACCOUNT
Effective January 1, 2013 the IRS maximum election amount is $2,500.
This account may be used to reimburse employees for a long list of IRS-approved medical expenses
incurred by the employee and his/her family. For example, such claims might include:
1. medical expenses not paid by the group insurance plan, such as the deductibles and the coinsurance paid by employees;
2. dental expenses not reimbursed or payable under your dental plan (including checkups,
fillings, braces, etc.);
3. vision-care expenses not reimbursed or payable under your vision plan (including
examination and corrective lenses); and
4. routine physical examinations, cosmetic surgery associated with accident, illness or birth
defects, and other medical expenses not paid under the group medical program.
II.
WHO IS ELIGIBLE TO PARTICIPATE?
Any full-time benefit-eligible employee working at least 20 hours per week may enroll during the next year-end
enrollment period.
A. ENROLLMENT PROCEDURES:
Enrollments must take place before the beginning of the plan year (most plans typically run
January 1 – December 31). It is necessary to re-enroll prior to each year of participation. At that
time, employees must complete an enrollment form indicating how much money they wish to have
deducted from their paycheck for each of the two accounts. Employees are not allowed to change
the amounts of deductions during the year unless they have a change in family status.*
Reimbursement through the dependent care account will be allowed only up to the current
account balance. Reimbursement through the health care account will be allowed up to the total
amount elected for the entire plan year. Furthermore, the IRS dictates that employees will forfeit
money left in any account for which they have not submitted claims for the plan year.
* Change in family status examples -- marriage, birth, adoption, divorce, death, or change in
spousal employment.
B. CLAIMING REIMBURSEMENT OF EXPENSES
The FSA plan reimburses out-of-pocket expenses which have been incurred during the plan year
by the participant. To receive tax-free reimbursement from the FSA
account(s), employees simply submit a claim form, together with the receipts
for their eligible expenses. The employer also has the option of setting up an
automatic “rollover” whereby eligible expenses are automatically reimbursed
from the employee’s FSA account after a medical claim is paid by AmeriBen
(auto rollover is not available with Flex Debit Card use). Each year stands
alone. Claims will continue to be processed for 90 days following the close of
the plan year, but only for expenses incurred before the end of the year,
unless stated otherwise in your Plan Document. AmeriBen can also
accommodate any employer-elected extensions based on IRS Notice 200542. Funds remaining after this time period will be forfeited to the plan.
C. EFFECT ON OTHER BENEFITS:
The dollars allocated to an FSA account, for non-taxable benefits, are not subject to income taxes,
or to the Social Security (FICA) tax. This produces current tax savings; however, it will result in a
modest reduction in future Social Security benefits. You may wish to consider taking the tax
savings realized from participating in the FSA and invest these dollars in a qualified retirement
plan.
D. LEAVE OF ABSENCE
When an employee that is participating in the FSA plan takes a leave of absence, he or she will not
lose their benefits, as long as the contributions continue. Contributions can be handled in a number
of ways, depending upon the employee’s circumstances:
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Pay anticipated contributions from last paycheck before the leave begins.
Pay contributions during leave (lose tax advantage with this option).
Pay missed contributions from paycheck upon return to active employment status.
For the healthcare and dependent care plans, the employee can lower the annual election
amount. (The new election amount, however, cannot be less than the amount the
participant has contributed to date).
E. COBRA
Employers with 20 or more employees are subject to COBRA regulations and must offer COBRA to
their employees participating in the FSA healthcare plan. Generally there is no advantage to the
employee to elect COBRA and continue their participation in the FSA plan unless there is a
remaining balance in the FSA account that has not been reimbursed as of the termination date. If
the employee elects COBRA, the employee is required to continue to make contributions to the FSA
plan, however, these contributions will be on an after-tax basis.
The dependent care plan is not subject to COBRA and cannot be continued through COBRA.
F. TAX CONSEQUENCES
Although most employees will find it advantageous to participate in the FSA, employees may wish
to consult their financial advisor before electing to enroll. If employees are reimbursed for certain
expenses under the FSA, they cannot use these same expenses as deductions or credits for income
tax purposes. Each employee should review his own situation carefully. The decision to enroll in
FSA in a given year is irrevocable.
III.
FLEX DEBIT CARD
AmeriBen offers a Flex Debit Card option to streamline the claims process. By using a Flex Debit Card the
participant does not have to pay the expenses up front and be reimbursed. Many claims can be paid without
the submittal of receipts simply because it is swiped at a point-of-service that is qualifies for autoadjudication. Be advised that receipts must still be saved for expenses paid with the Flex Debit Card.
Flex Debit Cards are available for both Medical and Dependent Care FSA’s.
However, there are additional rules that apply to using the Flex Debit Card
for dependent care expenses. The use of the Debit Card cannot be used to
“pre-pay” for care (i.e. services must have been provided); “if a dependent
care provider requires payment before the dependent care services are
provided, the expenses cannot be reimbursed at the time of payment
through use of a debit card or otherwise.”1 Check with your Benefits
Department as this option may not be offered by your company.
IV.
AN EXAMPLE OF HOW A FLEXIBLE SPENDING ACCOUNT WORKS
Let's assume Roger works for AJAX Company. His wife, Nancy, works for XYZ Company. They have a oneyear-old son. While the company provides medical insurance for Roger, he has also signed up for coverage
(with the $200 individual deductible) for his family. In addition, Roger and Nancy estimate that over the next
12 months, they will have at least $600 in eligible medical expenses (which are not reimbursed by the group
insurance program and are expenses which they must pay before the $200 deductible is fulfilled), and in
dental, vision care, and other medical expenses ineligible under the group insurance plan (such as routine
physical exams, well-baby care, chiropractic treatments, cosmetic surgery associated with accident, illness
or birth defects, etc.). Roger and Nancy pay $125 per month for the daytime care of their son.
1
Prop. Treas. Reg. § 1.125-6(g)(1); see also IRS Notice 2006-69 (July 11, 2006)
Roger and Nancy decide to put $125/month ($1,500/year) in the Dependent-Care Account so their child
day-time care costs will, in the future, be pre-tax. Roger and Nancy then put another $50/month
($600/year) in the Health-Care Account from which he will be reimbursed for medical, dental and visioncare expenses on a pre-tax basis. For purposes of this example, we'll assume that they have health-care
expenses equaling their account contributions. Here is the difference the FSA will make in the amount of
earnings on which they pay taxes:
Without FSA
With FSA
$26,000
$26,000
Roger & Nancy's Yearly Gross Earnings
Less:
FSA contriubutions to Dependent Care Account
(12 months x $125)
FSA contriubutions to Heatlhcare Account
(12 months x $50)
$
-
($1,500)
$
-
($600)
Taxable Earnings
$26,000
$23,900
($5,200)
($4,780)
Less:
Taxes (estimated at 20%)
Roger & Nancy's After-Tax Earnings
$
20,800
$
19,120
Less after-tax payments of
Dependent-care expenses
Health
Spendable Dollars
$
($1,500)
N/A
($600)
N/A
18,700
$
19,120
$420
19200
19100
19000
18900
18800
18700
18600
18500
18400
Without FSA
With FSA
Spendable $
As you can see, Roger and Nancy used
the dependent and health-care accounts.
With the two accounts, they reduced
their taxes and gained spendable
income by using the FSA. They expected
to have these dependent and healthcare expenses anyway. The FSA simply
lets them pay with pre-tax dollars,
thereby reducing their tax bill.
V.
ALLOWABLE EXPENSES
Eligible Expenses
BABY/CHILD TO AGE 13
 Lactation Consultant*
 Lead-Based Paint Removal
 Special Formula*
 Tuition: Special School/Teacher for
Disability or Learning Disability*
 Well Baby /Well Child Care
DENTAL
 Dental X-Rays
 Dentures and Bridges
 Exams and Teeth Cleaning
 Extractions and Fillings
 Oral Surgery
 Orthodontia
 Periodontal Services
EYES
 Eye Exams
 Eyeglasses and Contact Lenses
 Laser Eye Surgeries
 Prescription Sunglasses
 Radial Keratotomy
HEARING
 Hearing Aids and Batteries
 Hearing Exams
LAB EXAMS/TESTS
 Blood Tests and Metabolism Tests
 Body Scans
 Cardiograms
 Laboratory Fees
 X-Rays
MEDICAL EQUIPMENT/SUPPLIES
 Air Purification Equipment*
 Arches and Orthotic Inserts
 Contraceptive Devices
 Crutches, Walkers, Wheel Chairs
 Exercise Equipment*
 Hospital Beds*
 Mattresses*
 Medic Alert Bracelet or Necklace
 Nebulizers
 Orthopedic Shoes*
 Oxygen*
 Post-Mastectomy Clothing
 Prosthetics
 Syringes
 Wigs*
MEDICAL PROCEDURES/SERVICES
 Acupuncture
 Alcohol and Drug/Substance Abuse
(inpatient treatment and outpatient
care)
 Ambulance
 Fertility Enhancement and Treatment
 Hair Loss Treatment*
 Hospital Services
 Immunization
 In Vitro Fertilization
 Physical Examination
(not employment-related)
 Reconstructive Surgery (due to a
congenital defect, accident, or medical
treatment)
 Service Animals
 Sterilization/Sterilization Reversal
 Transplants (including organ donor)
 Transportation*
MEDICATIONS
 Insulin
 Prescription Drugs
OBSTETRICS
 Breast Pumps and Lactation
Supplies
 Doulas*
 Lamaze Class
 OB/GYN Exams
 OB/GYN Prepaid Maternity Fees
(reimbursable after date of birth)
 Pre- and Postnatal Treatments
PRACTITIONERS
 Allergist
 Chiropractor
 Christian Science Practitioner
 Dermatologist
 Homeopath
 Naturopath*
 Optometrist
 Osteopath
 Physician
 Psychiatrist or Psychologist
THERAPY
 Alcohol and Drug Addiction
 Counseling (not marital or career)
 Exercise Programs*
 Hypnosis
 Massage*
 Occupational
 Physical
 Smoking Cessation Programs*
 Speech
 Weight Loss Programs*
Note: This list is not meant to be all-inclusive, as other expenses not specifically mentioned may also qualify. Also, expenses marked with an
asterisk (*) are “potentially eligible expenses” that require a Note of Medical Necessity from your health care provider to qualify for
reimbursement. For additional information, check your Summary Plan Document or contact your Plan Administrator.
VI.
INELIGIBLE EXPENSES
The IRS does NOT allow the following expenses to be reimbursed under Health Care FSAs, as they
are not prescribed by a physician for a specific ailment. This is not an all-inclusive list.
Ineligible Expenses

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Contact Lens or Eyeglass Insurance
Cosmetic Surgery/Procedures
Electrolysis

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
Insurance Premiums and Interest (FSA
Ineligible Only)
Long Term Care Premiums
(FSA Ineligible Only)
Marriage or Career Counseling
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Personal Trainers
Sunscreen (spf less than 30)
Swimming Lessons
Note: This list is not meant to be all-inclusive.
Please Note: The IRS does not allow Over-the-Counter (OTC) medicines or drugs to be purchased with Health Care
FSA funds unless accompanied by a prescription and the prescription is filled by a pharmacist. If you have an OTC
prescription, you can use your benefits card for these purchases.
Ineligible Over-the-Counter Medicines and Drugs (unless prescribed in accordance with state laws)
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Acid controllers
Acne medications
Allergy & sinus
Antibiotic products
Antifungal (Foot)
Antiparasitic treatments
Antiseptics & wound cleansers
Anti-diarrheals
Anti-gas
Anti-itch & insect bite
Baby rash ointments & creams
Baby teething pain
Cold sore remedies
Contraceptives
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Cough, cold & flu
Denture pain relief
Digestive aids
Ear care
Eye care
Feminine antifungal & anti-itch
Fiber laxatives (bulk forming)
First aid burn remedies
Foot care treatment
Hemorrhoidal preps
Homeopathic remedies
Incontinence protection & treatment
products
Laxatives (non-fiber)
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Medicated nasal sprays, drops, &
inhalers
Medicated respiratory treatments &
vapor products
Motion sickness
Oral remedies or treatments
Pain relief (includes aspirin)
Skin treatments
Sleep aids & sedatives
Smoking deterrents
Stomach remedies
Unmedicated nasal sprays,
drops & inhalers
Unmedicated vapor products
OTC items that are not medicines or drugs remain eligible for purchase with FSAs. You can use your benefits card for
these items.
Eligible Over-the-Counter Items
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Baby Electrolytes and Dehydration
Pedialyte, Enfalyte
Contraceptives
Unmedicated condoms
Denture Adhesives, Repair, and
Cleansers
PoliGrip, Benzodent, Plate Weld,
Efferdent
Diabetes Testing and Aids
Ascencia, One Touch, Diabetic Tussin,
insulin syringes; glucose products
Diagnostic Products
Thermometers, blood pressure
monitors, cholesterol testing
Ear Care
Unmedicated ear drops, syringes,
ear wax removal
(Product categories are listed in bold face; common examples are listed in regular face.)
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Elastics/Athletic Treatments
ACE, Futuro, elastic bandages, braces,
hot/cold therapy, orthopedic supports,
rib belts
Eye Care
Contact lens care
Family Planning
Pregnancy and ovulation kits
First Aid Dressings and Supplies
Band Aid, 3M Nexcare, non-sport tapes
Foot Care Treatment
Unmedicated corn and callus
treatments (e.g., callus cushions),
devices, therapeutic insoles
Glucosamine &/or Chondroitin
Osteo-Bi-Flex, Cosamin D,
Flex-a-min Nutritional Supplements
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Hearing Aid/Medical Batteries
Home Health Care (limited segments)
Ostomy, walking aids,
decubitis/pressure relief,
enteral/parenteral feeding supplies,
patient lifting aids, orthopedic
braces/supports, splints & casts,
hydrocollators, nebulizers,
electrotherapy products, catheters,
unmedicated wound care, wheel chairs
Incontinence Products
Attends, Depend, GoodNites for
juvenile incontinence, Prevail
Prenatal Vitamins
Stuart Prenatal, Nature's Bounty
Prenatal Vitamins
Reading Glasses and Maintenance
Accessories
VII.
FORMS AND INFORMATION
The next pages are forms used in the administration of a Flexible Spending Account (FSA).
1. Spending Evaluation Worksheet – use this to determine amount of healthcare and dependent
care annual elections
2. Employee Account Status Sample Letter – these are sent to each participant in October,
November and December of each plan year to notify of remaining funds in FSA
3. Leave of Absence Form – complete this form if you will be taking a leave of absence
4. Explanation of Benefits Sample – this form is sent to participants once FSA claim has been
reimbursed
5. Enrollment Form – complete this form to enroll in the FSA plan
6. Direct Deposit Form – complete this form have FSA reimbursement checks automatically
deposited into your bank account
7. Claim Form – complete this form and send with your receipts to be reimbursed from your FSA
SPENDING EVALUATION
This form may be used by your in evaluating your participation in your company’s Flexible Spending
Account.
DEPENDENT CARE EXPENSES
Annually
Monthly
(monthly x 12)
How much do you pay for daycare?
HEALTHCARE EXPENSES
Estimate your annual family healthcare out-of-pocket costs which your
insurance and your spouse’s insurance will not cover:
Medical & dental deductibles
Doctor exams/co-pays
Dental and/or vision exams
Vision expenses (contact lenses, eyeglasses)
Prescription drugs
Cosmetic surgery associated with accident, illness, or birth defects
Lasik/PRK surgery
Orthodontia (incurred in plan year)
Massage therapy
Hearing aids
Other:
TOTAL ANNUAL HEALTHCARE EXPENSES:
Annually
ACCOUNT STATUS SAMPLE LETTER
Date
Mr. J.Q. Public
98765 Your Street
Your Town, ID 01234
Dear Mr. Public:
Our records indicate that you have credits in your employer-sponsored Flexible Spending
Account Plan as follows:
Dependent Care
Medical Expenses
TOTAL
$ 40.00
80.00
$120.00
Your Flexible Spending Account Plan is a very valuable benefit but only if you can use it!
Your plan year ends December 31, 2012 and the deadline for submitting claims for this plan
year is March 31, 2013. In order to receive your benefits, you must submit a claim form
(provided to you at enrollment). Remember, federal law requires that any benefits remaining
at the end of the plan year be forfeited.
If you need any help in filing your claims, please contact AmeriBen.
Sincerely,
Flexible Spending Account Specialist
AmeriBen
FLEX LEAVE OF ABSENCE FORM
Employer Name: ________________________________________________________________________
Employee Name: _____________________________________________
Social Security #__________ - _______-__________
Mailing Address: ______________________________________________________________________
Leave of Absence scheduled from __________________________ to __________________________
I elect to have my FSA contributions handled as follows:
Healthcare and Dependent Care Contributions:




Anticipated contributions deducted from last paycheck prior to leave
Contributions continue during leave (employee pays)
Missed contributions deducted from paycheck upon return to work
Lower annual election (not lower than already reimbursed)
o New healthcare election amount _________________________
o New dependent care election amount ________________________
_____________________________________________
_________________________
Employee Signature
_____________________________________________
Date
_________________________
Employer Signature
Employer: Please provide a copy of this form to AmeriBen/IEC Group
Date
SAMPLE EXPLAINATION OF BENEFITS (EOB)
FLEXIBLE SPENDING ACCOUNT ENROLLMENT FORM
 New Election
 Election Change
PLAN YEAR:
Employee:
SSN:
Mailing Address:
Birth Date:
City/State/ZIP:
Effective Date:
FLEXIBLE SPENDING ACCOUNT ELECTION AUTHORIZATION
The following election choice(s) indicate employee’s pre-tax participation in the Flexible Spending Account where offered by employer.
DEBIT CARD  Yes
 No
MANUAL CLAIMS SUBMISSION WITH AUTO ROLLOVER  Yes
 No
MANUAL CLAIMS SUBMISSION WITHOUT AUTO ROLLOVER  Yes
 No
HEALTHCARE SPENDING ACCOUNT: Election must be for qualified expenses that cover only myself, my tax dependents
and/or spouse. Cannot exceed annual limit set by employer.
 Yes – Annual Amount: $______________
Per Pay Period: $______________
 No – I do not wish to participate in the Healthcare Spending Account
DEPENDENT CARE ACCOUNT: Cannot exceed the lower of employee’s or spouse’s adjusted income. If one spouse is a fulltime student, please inquire about limitations. Cannot exceed $5,000, or $2,500 if married & filing separately.
 Yes – Annual Amount Elected: $______________
Per Pay Period: $______________
 No – I do not wish to participate in the Healthcare Spending Account
AUTHORIZATION: (Please read all before signing)
With regard to my salary redirection agreement and my election of benefits, I understand that:
1. The dependents for whom I will be claiming medical or dependent care expenses either reside with me in a parent-child
relationship or are legally dependent on me for support.
2. I am aware that premium and other contributions made under this plan are the property of my employer and will be used
to purchase the elected coverage and cannot be refunded.
3. Reimbursement account claims must be accompanied by documentation of the out-of-pocket expense.
4. I understand that coverage applies only to expenses incurred during participation.
5. I understand this agreement cannot be changed during the plan year unless I experience a qualified status change (e.g.,
marriage, divorce, birth, adoption, death of spouse or child, change in spouse’s employment).
6. I recognize any unused elections will be forfeited at the end of the plan year.
7. This agreement cannot be revoked during the plan year.
Signature: _______________________________________________________ Date: _________________________
Company Authorization: __________________________________________________ Date: ___________________
DECLINATION OF PARTICIPATION: (Sign only if you are NOT enrolling in the flexible spending plan.)
My employer’s flexible spending plan has been explained to me and I have been given the opportunity to participate and elected
not to do so. Signature: _________________________________________________ Date: ___________________________
FLEX DIRECT DEPOSIT FORM
I hereby authorize AmeriBen / IEC Group to automatically deposit my flexible spending account
reimbursements to my bank account. *This agreement will remain in effect until I give written notice to
cancel it. Fax to 800-723-4703 or [email protected]
Employee Name:
Employee SSN:
Signature:
Date:
Checking Account OR
Savings Account
PLEASE ATTACH A VOIDED CHECK.
WE CANNOT PROCESS YOUR REQUEST WITHOUT IT.
Please Note: A 30-day written notice is required in order to cancel direct deposit.
Please Note: Your first flex claim will be sent to you by check. Any following flex claims will be by direct
deposit. When your flex claim is directly deposited into your account, you will receive an EOB in the mail
stating the dollar amount credited to your account and the date the funds were sent.
Attach a cancelled check here.
Flexible Spending Account Claim Form
Employer Name: _________________________________________________________________________________________
Employee Name: ____________________________________________
Social Security #__________ - _______-__________
Mailing Address: _________________________________________________________________________________________
Please indicate the amount of your healthcare or dependent care expense(s) below.
HEALTHCARE EXPENSES
Patient’s Name
Date(s) of Service
Type of Service (i.e.,
medical, dental, vision,
Rx)
TOTAL HEALTHCARE EXPENSES
Amount Requested
$
DEPENDENT CARE EXPENSES
Patient’s Name
Date(s) of Service
Amount Requested
TOTAL DEPENDENT CARE EXPENSES


$
Always attach a proof of expense (receipt, paid billing statement, or "explanation of benefits" from your insurance company).
All proofs of expense MUST include the date of service.
To the best of my knowledge and belief, my statements in this request for reimbursement are complete and true. I am claiming
reimbursement only for eligible expenses. I certify that these expenses have not been and will not be reimbursed under this or any other
benefit plan and will not be claimed as an income tax deduction and that these expenses have been incurred during the Plan year for which I
am seeking reimbursement.
I authorize reduction of my Flexible Spending Account by the amount of the claim.
Employee Signature: ____________________________________________________
Date: ____________________________
Please send this form with proof(s) of expense to:
AmeriBen/IEC Group Flex Administrator
P.O. Box 7186 – Boise, ID 83707 – Toll Free Fax: 800-723-4703 – Email: [email protected]
If you have any questions for completing this form, please feel free to call our Flex Administrator at 800-786-7930.