1. 1 Section 125 Flexible Spending Accounts with the Verity National Star Card

2. 2 Two Types of Flexible Spending Accounts Dependent Care FSA Dependent Care FSA Health Care FSA

3. 3 What is a Health Care FSA? A “Health Care FSA” is a program employees can use to pay for medical expenses that are not reimbursed through insurance or any other arrangement.

4. 4 Health Care FSA Eligible Expenses (If not covered by your primary medical insurance) Deductibles and Co-pays Deductibles and Co-pays Contact Lenses Contact Lenses Special Tests Special Tests Laboratory Fees Laboratory Fees Prescription Drugs Prescription Drugs Coinsurance Coinsurance Psychotherapy Psychotherapy Fertility Treatments Fertility Treatments Crutches Crutches Eyeglasses Eyeglasses Vision Care Vision Care Hearing Aid Devices Hearing Aid Devices Dental Expenses Dental Expenses Optometrist Services Optometrist Services Physical Exams Physical Exams Acupuncture Acupuncture Orthodontia Orthodontia X-Rays X-Rays

5. 5 New Over-The-Counter (OTC) Restrictions Beginning January 1, 2011, all purchases of OTC drugs, medicines and biologicals will require another form of payment. A copy of the receipt along with the doctor’s prescription will need to be submitted directly to Verity National Group for reimbursement. Beginning January 1, 2011, all purchases of OTC drugs, medicines and biologicals will require another form of payment. A copy of the receipt along with the doctor’s prescription will need to be submitted directly to Verity National Group for reimbursement. The following categories of OTC drugs and medicines require a doctor’s prescription and thus, as of January 1, 2011 were no longer able to be purchased using the Verity National Star Card: The following categories of OTC drugs and medicines require a doctor’s prescription and thus, as of January 1, 2011 were no longer able to be purchased using the Verity National Star Card: Acid ControllersAllergy & Sinus Antibiotic ProductsAnti-Diarrheals Anti-GasAnti-Itch & Insect Bite Anti-parasitic TreatmentsBaby Rash Ointments/Creams Cold Sore RemediesCough, Cold & Flu LaxativesHemorrhoid Preps Feminine Anti-Fungal/Anti-ItchDigestive Aids Motion SicknessPain Relief Respiratory TreatmentsSleep Aids & Sedatives Stomach Remedies

6. 6 How do I Estimate FSA Contributions in Advance? Review similar expenses over the last couple of years. Review similar expenses over the last couple of years. Consider changes to family health care needs that may occur during the year. Consider changes to family health care needs that may occur during the year. Use the worksheet at www.VerityNational.com/Prosperitybank to balance risk of forfeiture versus tax saving opportunities. Use the worksheet at www.VerityNational.com/Prosperitybank to balance risk of forfeiture versus tax saving opportunities. For the 2012 Plan year, the FSA plan has a minimum annual election amount of $300.00 and a maximum annual election amount of $6000.00. If you elect less than $500 in the FSA plan there is a one time charge of $12 deducted from payroll. For the 2012 Plan year, the FSA plan has a minimum annual election amount of $300.00 and a maximum annual election amount of $6000.00. If you elect less than $500 in the FSA plan there is a one time charge of $12 deducted from payroll.

7. 7 What is a Dependent Care FSA? Dependent Care Accounts (DCAs) reimburse elder or child care expenses that allow the employee and his or her spouse to be “gainfully employed.” PLEASE NOTE: IRS mandates that the maximum election per household is $5000 per calendar year.

8. 8 After-school care or extended day care programs Au pair Babysitter Before-school care Day Camp Elder Care Nanny Preschool / Nursery school Dependent Care Eligible Expenses (For Eligible Tax Dependents)

9. 9 Do I Need to Enroll to Participate in an FSA? Yes! Yes! You must enroll each year during Open Enrollment. Contributions do not automatically continue from one year to the next.

10. 10 Can I Participate in both Health and Dependent Care FSAs? Yes! Yes! However, IRS regulations require the accounts to operate separately. You cannot use funds from one to pay for expenses from the other. However, IRS regulations require the accounts to operate separately. You cannot use funds from one to pay for expenses from the other.

11. 11 Verity National Star Card Instant access to your account funds Instant access to your account funds Automatically issued when you enroll Automatically issued when you enroll Rarely required to pay out-of-pocket Rarely required to pay out-of-pocket Virtually eliminates claim forms and receipts Virtually eliminates claim forms and receipts No more waiting for reimbursement checks No more waiting for reimbursement checks Instant online access to your account balance Instant online access to your account balance

12. 12 How do I Use the Card? Star Card is restricted to use for FSA-eligible services and purchases, per the IRS Star Card is restricted to use for FSA-eligible services and purchases, per the IRS Smart technology allows only the appropriate account to be debited Smart technology allows only the appropriate account to be debited Not eligible for use at ATMs or other unqualified merchant locations Not eligible for use at ATMs or other unqualified merchant locations

13. 13 Provider doesn’t Accept Credit Cards? Pay for eligible expense(s) out-of-pocket and then... Pay for eligible expense(s) out-of-pocket and then... Mail, fax, or email claim form and receipt to: Mail, fax, or email claim form and receipt to: Verity National Group, Inc. P.O. Box 780159 San Antonio, TX 78278 Fax: (210) 348-7112 Email: Section125_Claims@VerityNational.com

14. 14 Thank You… The Verity National Star Card Team Please consider taking advantage of this convenient, cost-saving benefit… Sign Up Today! Sign Up Today! Section 125 Flexible Spending Accounts