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Commonwealth of Massachusetts

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Presentation on theme: "Commonwealth of Massachusetts"— Presentation transcript:

1 Commonwealth of Massachusetts
GIC Flexible Spending Account Program

2 Agenda Welcome & Introductions Payroll Coordinator Packets
Flexible Spending Account Administration How You Can Help How Benefit Strategies Can Help You Questions / Wrap-up

3 What is a Flexible Spending Account (FSA)?
A Flexible Spending Account (FSA) is an employee benefit program that allows participants to set aside money on a pretax basis for certain kinds of expenses. A FSA provides tax savings to offset the rising cost of health and day care expenses.

4 Helping Employees Effectively Enroll
Assist employees to understand and maximize the financial and tax benefits provided by the plan Explain that employees should be aware of their health care costs: How much do we spend a year on prescription drugs? How often do we visit the doctor? How many dental visits do we need this year? What are my health insurance co-payments and deductibles? Teach employees to better manage their health care Understanding what is and isn’t considered dependent care eligible and when it can and cannot be used.

5 How Does the FSA Work? Employee elects to participate and enroll
Pre-tax premiums (annual election divided by number of pay periods) are reduced from employee pay checks Enrollee/Dependent incurs an eligible expense Enrollee completes a claim form or files a claim online Benefit Strategies verifies claim and sends reimbursement to participant via check or direct deposit, or Participant can use their FlexExpress card for health care expenses and retain receipts for substantiation

6 Types of FSAs Health Care Spending Account (HCSA)
For eligible healthcare expenses not paid by insurance Annual election is available the first day of the plan year If a participant separates from the plan, they are eligible for the entire annual election regardless of their contributions, however they can only file for dates of service prior to the termination date (participant may choose to continue the plan through COBRA) Account maximum: $5,000 per participant per year ($500 minimum) No IRS mandated household maximum

7 Types of FSAs (continued)
Dependent Care Assistance Program (DCAP) For eligible dependent care expenses that allow the employee (or the employee and their spouse, if married) to work or look for work, or that allows the spouse to attend school full time. Funds are available as contributions are made If a participant separates from the plan, they are eligible up to the contribution amount for any dates of services within the plan year DCAP maximum: $5,000 per household*, ($0.00 minimum) *Household maximum per plan year as per IRS

8 Eligible Healthcare Expenses
Eligible healthcare expenses incurred by the participant and/or dependents include: Acupuncture Childbirth classes Chiropractic care Co-payments, co-insurance and deductibles (but not insurance premiums) Expenses that exceed medical, dental, vision plan limits (dollar or visit maximums, out-of-network providers)

9 Healthcare Expenses (continued)
Dental care Including crowns, endodontic services, implants, oral surgery, periodontal services, sealants Eye exams, glasses, contact lenses Including prescription sunglasses Hearing aids Home medical equipment Wheelchairs, oxygen, respirators, etc. Infertility treatments Laser Eye Surgery

10 Ineligible Healthcare Expenses
Cosmetic services (unless resulting from disease or illness) Expenses claimed on tax return Expenses reimbursed by other sources (insurance) Fees for exercise or health clubs (unless prescribed by a physician for a medical problem) Hair transplants Insurance premiums Vitamins Weight loss programs for general well-being

11 Dual Use OTC Items Acceptable OTC (Can use debit card)
Dual Use OTC : Dr.’s note required, Debit Card Will not work Bandages Allergy and Sinus medicine Blood Pressure Monitors Antacids and Digestive Aids Dentures Asprin and other pain relievers Eye Glasses Cold and Flu Medicine First Aid Kit Cough Drops/syrups and Lozenges Hearing Aids (also batteries) Ear drops Crutches, Canes, Walkers Herbal or Homeopathic medicine Pregnancy Tests Laxatives Medical Equipment Sleep aids

12 Eligible Dependent Care Assistance Program Expenses
Care for dependent children up to 13th birthday A person of any age who can be claimed as a dependent on federal income tax return and who is mentally or physically incapable of self care Child care at a daycare center, day camp, nursery school or by a private sitter Late pick-up fees Before and after-school care (not tuition) Housekeeper caring for an eligible dependent Au Pair placement fees and weekly stipend

13 Ineligible Dependent Care Assistance Program Expenses
Education or tuition fees Late payment fees Overnight camps (in general) Agency fees for finding a care provider Sports lessons, field trips, clothing Mileage reimbursement to/from the care provider

14 Comparison of After-Tax versus Pre-Tax Savings
With FSA Without FSA Annual Pay $50,000 Pre-Tax FSA Contribution $2,000 $0 Taxable Income $48,000 Federal Income & Social Security Taxes $11,842 $12,495 Post-tax Dollars Spent On Eligible Expenses Spendable Income $36,158 $35,505 TOTAL SAVINGS $653

15 “Use It or Lose It” Rule Participants forfeit money unspent at the end of the plan year IRS Rule (Section 125 of IRS Code) Funds cannot be rolled over to the next plan year and cannot be paid out without eligible expenses Participants must plan carefully when making elections Healthcare and Dependent Care Accounts are eligible for a 2 ½ month extension to spend down balances

16 Grace Period for Healthcare Expenses
Participants have from January 1, 2012 to March 15, 2013 to incur eligible Healthcare and Dependent Care expenses 14 ½ months to spend annual allotment All contributions not spent on eligible expenses by March 15th will be forfeited Participants must file claims by April 15th following the end of the plan year

17 How Grace Period Claims Are Paid
If a participant has an available prior plan year account balance and is also participating in the current year plan Expenses are paid from the prior plan year first for debit card or manual claim submission Based on what claim/debit card transaction is recorded first (not what the earliest Date of Service is) Not applicable to participants with a $0 prior plan year account balance or if participant did not have a prior plan year account

18 How to Use Your Funds! Health Care Spending Account
Use the FlexExpress debit card where accepted File a claim and upload receipts online! Complete a healthcare reimbursement claim form Attach appropriate documentation An explanation of benefits (EOB ) or itemized bill is required for medical, dental and vision expenses Dependent Care Assistance Program Complete a dependent care reimbursement claim form (cannot use debit card for DCA) Attach a receipt or bill from the provider, or Have the provider sign the affidavit section of the claim form (Canceled checks are not acceptable) , mail, upload or fax claims and receipts to Benefit Strategies for reimbursement.

19 FlexExpress Debit Card
Easy access to healthcare account funds Free to all enrolled participants ($5.00 per additional card) Use for co-pays, deductibles, co-insurance and other items not covered by insurance and over-the-counter medications Funds are deducted immediately from your FSA No need to file claims Updates your account balance and transaction history Participants must retain all receipts – IRS mandate

20 Participant Online Services
Track Account balances at GIC has their own FSA page (click on the GIC icon in lower right hand side of home page) Participant will need to log on using assigned username and password Sign up for Direct Deposit to receive reimbursements directly to your bank account Include address on claim forms and receive a monthly statement of account Re-enrollment for current participants at login above

21 Reimbursement Forms Available online at, or
By telephone at FLEXGIC ( ) Claims can be faxed to or Mailed to: Benefit Strategies, LLC PO Box Manchester, NH ed to:

22 New! Technology Enhancements
Receipt Upload Now upload receipts after submitting a claim online! Once the receipt is uploaded someone from Benefit Strategies will substantiate those claims online, there is no need to send in a claim form or confirmation Using this new feature will not only save time and money but will also give the convenience of managing your account on your own terms Detailed instructions can be found on our website Text Message Alerts Text Messaging is becoming even more mainstream! 76% of US adults have mobile phones 67% use text messaging You can receive notifications about the following: Mobile Receipt Reminders Mobile Claim Confirmation Mobile Denial Simply login into your account to opt in and out of the text message communications at any time!

23 New! Technology Enhancements (continued)
iPhone and Android Mobile Applications Smartphone adoption is growing rapidly 47% increase in Smartphone sales in 2010 vs. 2009 A predicted 50% of US mobile users will have smart phones 2011 Applications are available via Consumer Portal Apple App Store Google Android Market Through the application the following information is accessible Available balance View account activity Final service date (final date to incur claims) Final filing date (final date to submit claims) Convenient customer service contact information Detailed instructions can be found on our website

OCTOBER 3rd – NOVEMBER 18th, 2011 Assist participants on the advantages of being enrolled in an FSA: Display the poster and encourage employees sign up or call us with questions Send reminder s to employees regarding open enrollment Photocopy and distribute the employee letter Forward GIC s about open enrollment to your employees Call Benefit Strategies if you need more information, handouts or have any additional questions

25 Working with Benefit Strategies
All paper enrollment forms must be sent to BSL no later than 12/2 Enrollment reports for each division will be sent by BSL to the division’s POC by 12/16 If there is an employee on the report that the POC doesn’t have an enrollment form for, the POC must work with that employee to get one on file and update the payroll for 2012 Please notify BSL ASAP if the enrollment report is missing a participant that you have an enrollment form for and they will be added

26 How Benefit Strategies Can Help YOU!
Existing participants in 2011 can RE-ENROLL on line during Open Enrollment between October 3rd and November 18th, Simply follow the instructions that appear when you log into your account. New participants or first-time enrollees must complete a paper enrollment form and turn it in to their HR department. A link to the form is on the GIC home page on Benefit Strategies will receive payroll information from all agencies to assist in identifying a qualifying event An error report will go the agency’s Payroll Coordinator via if an exception is discovered for confirmation of whether it is a “payroll correction” or a true “qualifying event” Benefit Strategies will send quarterly enrollment reports to PC to confirm employee deductions are on track to meet yearly goal amounts.

27 How Benefit Strategies Can Help YOU!
Fast, friendly customer service and administrative support! 1.877.FLEXGIC or Dedicated Account Specialists: Dave Willey / Jasmine Shamer /

28 Questions? Thank you!

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