® A Division of ADP National Accounts FSA It Paysto Participate! Flexible SpendingAccounts ProBusiness, A Division of ADP National Accounts
What Are Flexible Spending Accounts? And Why Should I Participate? • Flexible Spending Accounts (FSA) allow you to set aside pre-tax dollars to pay for certain health and dependent care expenses. • Flexible Spending Accounts (FSA) are a “tax free” benefit through the IRS • Flexible Spending Accounts (FSA) are a great way to reduce your taxable income
Tax Savings Example Without FSA With FSA Gross Monthly Salary $3,000 $3,000 Pre-tax Contribution to Reimbursement Account - 0 - - $ 300 Taxable Salary $3,000 $2,700 Less: FICA & Federal Tax* $1,050 $ 945 Take Home Pay $1,950 $1,755 After Tax Expenses - $ 300 - 0 - Net Take Home Pay $1,650 $1,755 Increase in Monthly Spendable Income N/A $ 105 Increase in Annual Spendable Income N/A $ 1260 * State tax savings are available in most states but are excluded from this example. Your tax savings may vary based on your tax bracket and income.
Your Flexible Spending Account Components • Health Care Spending AccountUn-reimbursed or uncovered eligible health care expenses (copayments, Rx, dental/vision, deductibles) • Dependent Care Spending AccountEligible dependent care including child care, disabled spouse & incapacitated parent expenses • Premium Payment PlanPay for your share of employer-sponsored insurance premiums
How Do Flexible Spending Accounts Work? • Calculate and decide on your plan year election • Complete an enrollment form authorizing deduction on a pre-tax basis from each paycheck. Your contributions will be placed into your account throughout the plan year • As you incur* expenses, submit and the necessary receipts anda claim form to ProBusiness • ProBusiness will reimburse you for your expenses * Incurred means a Plan Participant has been provided services that gives rise to an expense, not when the Plan Participant is formally billed, charged for, or pays for the services.
Planning is Important! • Be conservative when establishing your plan contributions • Target 80% of your estimated expenses • Only services incurred during the plan year are eligible • You have a grace period to submit claims after the plan year is over
Changing Your Flexible Spending Account Election Once enrolled and your period of coverage begins, your election is irrevocable except in these instances: • During open enrollment • You experience a qualified family status change
What Are Qualified Status Changes? • Marital status change • Number of dependents • Employment status • Dependent satisfies or ceases to satisfy the requirements for unmarried dependents • Residence • Adoption Assistance
® A Division of ADP National Accounts Health Care Reimbursement Account
Orthodontia treatment Rx co-payments Acupuncture Chiropractic Contraceptive Prescriptions Psychiatrist/Counseling Durable Medical Equipment Over the Counter (OTC) Drugs or Medicines used for medical care Deductibles Co-insurance PPO, HMO or EPOco-payments Dental expenses Eye glasses, contact lenses Contact solutions, cleaners Diabetic supplies Health Care Expense Eligibility
Ineligible Health Care Expenses • Cosmetic Treatments • Cosmetic Prescriptions • Teeth Bleaching • Health Club Memberships • Herbs and Vitamins • Dietary Supplements • Union Dues or Insurance Premiums * This is only a partial list of health care expenses that are not eligible for reimbursement from your Health Care Reimbursement Account.
Health Care Spending Account Claims To receive reimbursement, your documentation must include: • Date of service • Diagnosis or description of Service • Dollars outstanding after insurance or other payment (money you owe)
® A Division of ADP National Accounts Dependent Care Reimbursement Account
Can I Use The Dependent Care Account? YES, as long as... • You & your spouse are gainfully employed or looking for work OR • You are a single, working parentOR • Your spouse is a full-time student for at least 5 months during the calendar year
Eligible Dependent Care Expenses Care through kindergarten • If the provider cannot separate the cost of care from the cost of schooling, the entire amount is reimbursable. • If the provider separates the cost of care from the cost of schooling, only the cost of care is reimbursable.
Eligible Dependent Care Expenses • Care before & after normal school hours • Beginning with 1st grade, it is mandatory that the cost of care and the cost of schooling be separated. Only the cost of care is reimbursable. Care before & after normal school hours qualifies. • Day camps • Au pair or nanny expenses(including their associated payroll taxes) • Day care for a disabled spouse or dependent parent that lives with you
® A Division of ADP National Accounts A Division of ADP National Accounts Reimbursement Process
Reimbursement Process Submit a Claim Form: • For Health Care: include Explanation Of Benefits statements, co-payment receipts, “super bills” that include description of service, date(s) of service and out of pocket costs (copies are recommended) • For Dependent Care: include receipts for expenses or have the care provider sign the claim form. The provider’s tax ID number or social security number must be provided on the claim form.
Don’t Forget . . . If you are submitting a paper claim . . . • To sign the claim form • To indicate the $ amount being requested • Supporting claim documentation – the IRS does not allow: • cancelled checks • credit card receipts • balance-due statements
Paper Claim Reimbursement Process • Fax your signed reimbursement form & documentation to us @ 800-269-5231 • Reimbursements will occur according to the reimbursement schedule in your welcome packet • Questions? • Visit our Web Site: www.probusiness.com • E-Mail us at: firstname.lastname@example.org • Call us: 1-800-269-0020
Enroll Using the World Wide Web! • Access the ProBusiness’ Web site from work or home at www.probusiness.com • Refer to the step-by-step on-line instructions • Once enrolled you will receive: • Confirmation your data was received • A welcome kit with a confirmation statement and reimbursement schedule following open enrollment
® A Division of ADP National Accounts FSA It Paysto Participate! Enroll in your Flexible Spending Account Plans today!