1. Proprietary and Confidential FBMC & The State of South Carolina MONEYPLU$ Training August / September 2005

2. The EZ REIMBURSE ® MasterCard ® Card The EZ REIMBURSE ® MasterCard ® Card is issued by MetaBank

3. What is the EZ REIMBURSE ® Card? Stored Value Card (not a credit or debit card). The value of the card is pre- loaded at the beginning of each plan year and matches the annualized election of the participant's Medical Spending Account Gives participants immediate access to their Medical Spending Account funds. Can be used only for the Full Medical Spending Account.

4. Reimbursement with the Card: Health Care Provider The MSA is funded each paycheck. When purchasing eligible medical services, the Card is presented for payment like any other MasterCard ®. Any co-payments, deductibles or uncovered amounts are paid directly from the participant’s MSA. Documentation requested via a monthly statement MUST be provided. Requests will be in Blue on the statement The participant has immediate access Medical Spending Account Dollars! THE TRANSACTION IS INSTANTANEOUS!

5. Reimbursement with the Card: Pharmacy The MSA is funded each paycheck. The Card is presented to the pharmacist and processed via pharmacy’s claims system. Any co-payments, deductibles or uncovered amounts are paid directly from the participant’s MSA. The transaction is INSTANTANEOUS and PAPERLESS! The participant has immediate access to Medical Spending Account dollars. NO DOCUMENTATION NEEDED.

6. Health care Providers Examples of eligible service providers: Podiatrists Doctors and Physicians Medical / Dental Labs DentistsOphthalmologistsChiropractors Ambulance Services Chiropractors Optical Goods OptometristsHospitals Participating Pharmacies Participating pharmacies can be found at www.fbmc-benefits.com www.fbmc-benefits.com

7. Auto Adjudication Known Co-Payment Matching to Merchant Category Codes (MCC). South Carolina has a $ 15.00 co- payment at a doctor’s office. Doctors have a MCC of 8011. When a transaction for $15.00 is presented to FBMC with an 8011 MCC, FBMC automatically adjudicates the expense as an office visit. Example Substantiation Methods

8. If a transaction is submitted to FBMC in the amount of $ 40.25 with an MCC of 8011, FBMC will require third party substantiation since $ 40.25 is not a “known co- payment” under any health plan. Example

9. Substantiation Methods Submission of Documentation Independent third party review. 213-eligible expenses. EOB and/or documentation must include: –The date of the service, and –The $$ amount, and –Description of services rendered, and –Service provider.

10. Notification for required Documentation  The Monthly Statement will notify participant of all activity that occurred for all Money PLU$ accounts they are participating in to include: –Payroll contributions, –Employer and employee contributions, –Reimbursements; paper claims and EZ REIMBURSE ® Card transactions, and –A list of all transactions that require documentation.  All transactions requiring documentation will be colored in BLUE.  If a transaction shows outstanding two consecutive times on a Monthly Statement, the card is suspended and correction procedures are initiated.

11.  FBMC suspends card privileges. (Note, employee may still submit paper claims for eligible expenses)  FBMC uses Automatic Substitution Process.  Employee reimburses account with a personal check.  Employer adjusts W-2. If/when a claim is determined to be unqualified or cannot be auto-adjudicated and documentation has not been received: Correction Procedures Revenue Ruling

12. What is Automatic Substitution?  Example:A participant uses the Card on 01/01/05 for a health provider expense which was $30.00, but does not provide documentation within the established timeframe. The Card is suspended. Then, the participant later submits a paper reimbursement claim on 04/01/05 for a different expense in the amount of $50.00. The automatic substitution process will apply $30.00 to the outstanding Card transaction to payback the expense, $20.00 is sent to the participant, and the card is automatically reinstated. Correction Procedures

13. Correction Procedures Revenue Ruling Reclassification Employer will treat unqualified expense as business indebtedness and reclassifies the ineligible expense as income to the participant. Employer will treat unqualified expense as business indebtedness and reclassifies the ineligible expense as income to the participant. –Employer receives a “reclassification report” at the end of the run-out period. The amounts shown on the report will reflect the amount that should be reclassified on the next W-2. –Amounts are reporting on the W-2 for the tax year in which the unqualified expense is written off business indebtedness.

14. Correction Procedures Revenue Ruling Reclassification  Employee has until the end of the run-out period to send in documentation. (March 31, 2006)  By this time the employee has opted in for the card, had the annual fee charged to the account in January 2006, and the card is still suspended.  The card is forever suspended if the documentation is not turned in, and the annual fee will not be refunded.

15. Revenue Ruling Reclassification How to avoid reclassification.  Each BA will receive a “payback report” in September of 2005.  BA’s could –Send letters or make phone calls to the participants explaining why it is important for the documentation to be submitted. –Communication should explain the Card will remain suspended, tax consequences, and the assessment of the 2006 annual card fee.

16. Revenue Ruling Reclassification / Payback Report Fringe Benefits Management Company Payback Report – Summary by Work Location The State of South Carolina Sept 1 2005 Transactions Settled 70 days before as of: 09/01/2005 Page 1 of 1 SSNName Employme nt Status Pay Code Total Trans Amt ($) Total Rejected Amt($) Total Payback Amt ($) Total Collectio n Amt($) 111111111 Hall, KendallACTIVEA24155.650.00 155.65 222222222 Hall, KendallACTIVEA2465.00 0.0065.00 333333333 Hall, KendallACTIVEA2434.74 15.0019.74 444444444 Hall, KendallACTIVEA24266.000.00200.0066.00 555555555 Hall, KendallTERMA24500.00250.00150.00100.00

17. Common Reasons for Card Transaction Being Declined  Participant did not activate the Card. oThe Card must be activated by calling the number on sticker affixed to front of card just like any other MasterCard ®.  Card has been suspended.  Election amount has been reached, or the expense is greater that the Medical Spending Account balance.

18. Common Reasons for Card Transaction Being Declined  Health care provider has incorrect MCC (Merchant Category Code) in the terminal that accepts the credit and debit cards.  University example: teaching hospital that was using MCC codes of a College instead of a Hospital.  Sears Optical Centers: uses the department store MCC instead of the optometry MCC.

19.  Pay for deductibles and co- payments.  Pay for non-covered medical expenses  Can be used for self and family members MoneyPlu$ HEALTH SAVINGS ACCOUNTS

20.  Set aside money pre-tax $2,650/$5,250.  Over 55 + catch up - $ 700.00 in 2006.  Requires State Health Plan "Savings Plan“ Coverage. ( high deductible).  No other medical coverage (including Full MSA).  Participant owned - "vested“.

21.  D oes not require claims adjudication.  Either pay provider or reimburse yourself.  NBSC reports withdrawals at end of year.  Participant must have and keep matching documentation. MoneyPlu$ HEALTH SAVINGS ACCOUNTS

22.  Cannot have other medical coverage, including Medical Spending Account.  Limited- Use Medical Spending Accounts are OK for certain expenses.  South Carolina’s HDHP does not cover dental and Vision, so a Limited- Use Medical Spending Account is available to HSA participants. MoneyPlu$ HEALTH SAVINGS ACCOUNTS

23. MoneyPlu$ HEALTH SAVINGS ACCOUNTS FEES  Annual $20 NBSC VISA ® fee (or $2 per month).  The fee is waived once the account balance is $2,500 or more.  $0.50 fee per check processed.  A starter supply of checks are free. ( call to order)  No additional MoneyPlu$ fees.

24. MoneyPlu$ HEALTH SAVINGS ACCOUNTS are Bank Accounts  Accounts are subject to the USA PATRIOT Act.  Signatures and beneficiaries are required.  Will not advance money nor can it be used at an ATM.

25. NEW INVESTMENT OPTIONS  Balance of $3,500 or more.  Must leave $1,000 in HSA checking account.  Fidelity Family, selected funds, internal fund expenses.  Account charges ($60 annual fee, which includes all trades, phone calls, support, etc.; debited from checking account in October).  Synovus/NBSC web site www.nationalbanksc.com. www.nationalbanksc.com

26. HSA ACCOUNT FUNDS FLOW  Payroll deducts and sends to FBMC.  FBMC reconciles, tests for contributions limit.  FBMC remits to Synovus/NBSC.  Synovus/NBSC reconciles, tests, posts to account.

27. NEW IRS "GRACE PERIOD" RULING  Allows for participants to incur eligible expenses from the previous plan year MSA funds in the new plan year through March 15, 2006.  A plan year is still defined as a 12 months.

28. NEW IRS "GRACE PERIOD" RULING DEFINITIONS NEW IRS "GRACE PERIOD" RULING DEFINITIONS  Grace period –the time in which participants can access previous plan year funds for eligible expenses with a date of service in the new plan year.  Ends March 15, 2006. Eg: 2005 MSA has $ 50.00 in it. The participant incurs an expense for $ 50.00 on 01/28/2006. The participant claim will be reimbursed from the 2005 balance, and the participant does not “lose” the funds!

29. NEW IRS "GRACE PERIOD" RULING DEFINITIONS Run-out period – the time in which participants can send in paper claims for eligible expenses with a date of service from the previous plan year in order to exhaust previous plan year funds. Ends March 31 and runs concurrently with the grace period. Eg: 2005 MSA has $ 50.00 in it. The participant has documentation for an expense for $ 50.00 on 12/28/2006. The participant claim will be reimbursed from the 2005 balance, and the participant does not “lose” the funds!

30. CLAIMS DURING "GRACE" PERIOD  FIFO – first in first out.  FBMC can pay paper claims from both "old" and "new" money.  FBMC EZ REIMBURSE ® Card can pay from both "old" and "new" money.

31. CLAIMS DURING "GRACE" PERIOD Example of FIFO – paper claims 2005 MSA balance = $ 100.00 2006 MSA balance = $1000.00 Participant incurs expense on 01/15/2005 for $50.00. Paper claim is submitted on 01/20/2005. 2005 MSA balance = $ 50.00 2006 MSA balance = $1000.00 Participant then submits paper claim for expenses dated 11/15/2005 in the amount of $ 50.00. $ 50.00 is paid. 2005 MSA balance = $ 0.00 2006 MSA balance = $1000.00

32. CLAIMS DURING "GRACE" PERIOD Example of FIFO – EZ REIMBURSE ® Card and a run-out claim. 2005 MSA balance = $ 100.00 2006 MSA balance = $1000.00 Participant swipes for an expense on 01/15/2005 for $150.00. The system will automatically split the payment. 2005 MSA balance = $ 0.00 2006 MSA balance = $950.00 Participant then submits paper claim for expenses dated 11/15/2005 in the amount of $ 50.00. The $ 50.00 is rejected since the 2005 MSA is out of funds. 2005 MSA balance = $ 0.00 2006 MSA balance = $950.00

33. HOUSEKEEPING - ADMINISTRATIVE  FBMC sends a 20% supply of hard copy forms.  Return fall enrollment forms on a timely basis  Send payrolls on a timely basis.

34. HOUSEKEEPING - ADMINISTRATIVE  EVERY form signed by EE MUST come to BA first.  BA’s MUST fill out the bottom of the form completely.

35. HOUSEKEEPING - CARD & CLAIMS  Auto Adjudication --- ONLY known co-payments and Rx transactions are auto adjudicated.  Participants MUST review monthly statements for requested documentation. “ If it’s in blue, there’s something you gotta do!”  Send EZ REIMBURSE ® Card claims documentation on the Fax Transmittal Sheet.

36. HOUSEKEEPING - CARD & CLAIMS  All documentation ( card or paper) MUST HAVE:  legible claims with - date and type of service  $ amount of service  name & address of provider  Manual pharmacy claims must show above, plus  Rx number  name of drug All claims MUST be signed.

37. Thank You ! Go to www.fbmc-benefits.com for Claims Forms FAQs Participating Pharmacy lists or call 1-800-342-8017 Mon-Fri, 7 a.m. – 10 p.m. for more information. www.fbmc-benefits.com