1. Flexible Spending Accounts
San Mateo County
Paul Hackleman

2. What is a Healthcare FSA?
Allows Participants to Recover Out-of-Pocket Payments for Healthcare
Accounts Are Funded from the Participant’s Pre-Tax Payroll Deductions

3. How Do FSAs Work? Participant Determines Payroll Deduction
Employer Takes Deductions to Fund Selected FSA Accounts
Participant Submits Eligible Claims and Documentation to Mangrove Employer Services for Reimbursement

4. How Do FSAs Work? Mangrove Reviews / Processes Claims
Mails / Directly Deposits Bi-Weekly Check
Use of Debit Card
County pays for first two cards
Additional cards are $5 each.
Quarterly Statements
24 hour online access to FSA account – up to the minute information

5. How Will FSAs Benefit You?
Pre-Tax Payroll Deductions Reduce Your Taxable Income
Increases Your Spendable Income Since Services Are Paid For from Pre-Tax Dollars

6. A True Pre-Tax Deduction
Contributions are tax free including:
Federal
FICA
State

7. FSA SAVINGS TOTAL $43 mo./$516 yr.
Example - $60,000 Income
No FSA FSA
Gross Monthly Income $5,000 $5,000
Pre-Tax Med. Expenses
Taxable Income $5,000 $4,900
Federal Tax (28%) , ,372
State Tax (7.3%)
FICA Tax (7.65%)
After-Tax Healthcare Expenses
Monthly Spendable Income $2, $2,795
FSA SAVINGS TOTAL $43 mo./$516 yr.

8. Who is Eligible? Regular Employees 20+ Hours per Week
Participation Begins:
Current Employees – January 1 (enroll during open enrollment)
New Employees – First of a Month Following 28 Days of Employment

9. Reimbursement Account
Reimburses Out-of-Pocket Healthcare Expenses
Incurred by Employee, Spouse, or Dependents
Benefit Is Pre-Funded By Your Employer

10. How Much Can I Contribute?
Healthcare Account
Minimum $25 per year
Maximum $5,000 annually

11. What are Eligible Expenses?
Incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body
Incurred within the plan year
Expenses to promote general health are generally not deductible

12. Eligible Healthcare Expenses
Anesthetist
Chiropractor
Dental
Glasses & Contacts
Eye Exams
Hospitalization
Laboratory
Fees/Co-Pays for
Physician
Psychiatrist
Psychologist
Surgery
X-Rays
Diagnostic
Acupuncture
Ambulance

13. Eligible Healthcare Expenses
Fees/Co-Pays for:
Vaccines
Artificial Teeth
Birth Control Pills
Modifications to home or car due to disabilities
Guide Dog cost and maintenance
Fertility Treatments
Nursing Services
Medical monitoring and testing devices
Psychoanalysis
Travel cents per mile
Lodging $50 per person ($100 per day max.)
Smoking Cessation

14. Eligible Healthcare Expenses
Fees/Co-Pays for:
Prescriptions
Hearing Aids & Batteries
Nursing
Obstetrician
Sterilization
Limb/Breast Reconstruction
Nursing Home
Orthopedic Shoes
Orthodontic
Therapy for Drug/Alcohol Addiction
Tuition for Learning Disabled
Lasik Surgery
Over-the counter drugs*

15. Over-The-Counter Drugs
Revenue Ruling (9/3/03)
Product must:
Be for medical care
Satisfy definition of eligible expense
Cannot be merely beneficial to health. (Vitamins / Supplements excluded)
Be medicine or drugs (no toiletries / cosmetics)
Be documented by receipts showing name and type of product purchased

16. Ineligible Expenses
Unless Prescribed By Physician and Documented - requires letter of medical necessity from physician
Smoking Cessation Programs
Lamaze Classes
Exercise Equipment
Cosmetic Services
Weight Loss Programs

17. Ineligible Expenses Estimated Expenses Premiums for Insurance Benefits
Already Pre-Tax
Expenses Paid By An Insurance Company or Submitted to Spouse’s Employer Sponsored FSA
Expenses incurred prior to the start date of the FSA plan – or incurred after your termination from the FSA plan.

18. Termination of Employment
Once an employee terminates employment:
No more incurred expenses are eligible
Need to submit receipts within 60 days
Importance of Planning
Retirement / Termination
Calculation of contribution

19. Benny Makes Them EASY to Use!
Introducing The Benny Debit Visa Card for All Your Qualified FSA Expenses

20. Benny Debit Card
Other than for approved co-pays, receipts may be required
Letter will be sent in 30 days from transaction if receipts are required.
If receipts are required and not received in 60 days letter is sent and the card is turned off and purchase may be deemed ineligible.

21. At the time of payment for prescription or office visit…
How Does It Work?
At the time of payment for prescription or office visit…
Simply Present Benny™.
The Card gets SWIPED...
And, payment is automatically deducted from your FSA account.
Then, save your receipts in an envelope.
It’s that EASY!

22. Benny Debit Card For Current Participants A new card will not be sent
If enroll dependent one additional card at no charge
Active January 1, 2008 – New Balance

23. Benny Debit Card No required receipts* for co-pays: Pharmacies
Doctor’s offices
Pharmacies
Hospitals
*Co-pay amount must match your health plan. Copies of receipts should be kept.

24. Benny Debit Card
Can be used at the following as long as they accept Visa:
Doctor’s office
Pharmacy
Hospital
Dentist
Vision provider

25. Benny Debit Card Two cards will be received at no cost to you.
If additional cards cost.
You Need to ACTIVATE and SIGN the Cards
To activate call the number on the sticker on the Card or log onto
Each eligible user signs his or her name.

26. Benny Debit Card Improvements over Prior Debit Card –
More Automatic Adjudication:
Data Matching
Retrospective Files
Recurring Expenses
Enhanced Co-pay Matching System

27. Plan Rules
Expenses Must Be Incurred (Services Rendered) While An Active Participant
Funds Left In the Account at the End of the Plan Year Are Forfeited
Run Out Period (90 days)
Reduction in Taxable Income May Result in Reduced Social Security Benefits

28. Plan Rules
Cannot Change Deduction Unless You Experience a Family Status Change: (must be reported within 30 days of the event)
Marriage or Divorce
Birth or Adoption
Death of Spouse/Dependent
Change in Employment Status of Spouse or Self
Involuntary Change in Medical or Dental Coverage
FMLA or Non-FMLA Leave

29. How Do I Enroll? Complete the Estimated Expenses Worksheet
Return a Completed Election Form to Human Resources - Pony HRD-133*
*Current Participants – Re-enrollment Process

30. The Better You Plan The More You Will Save!