1. Spending Accounts (For Plan Year 2013) Health Care & Dependent Care SHPS

2. February 2010 2 APRIL 2010 Spending Accounts – SHPS/ADP No increase in admin fees with current plan design HCSA annual maximum will reduce from $5,040 to $2,460 – Monthly maximum will be $205 – Compliance with Patient Protection and Affordable Care Act (PPACA) – Note: a monthly administration fee of $3.20 is included in the total contribution amount Employees who contributed a larger amount in 2012 will be reduced to the new HCSA maximum for 2013 Plan Design/Premium Changes for AE 2013

3. February 2010 3 APRIL 2010 How Does it Work?  Employee chooses a monthly contribution amount  Pre-tax contribution is transferred into the Spending Account  Employee submits eligible expenses  Employee reimbursed with pre-tax dollars

4. February 2010 4 APRIL 2010 General or Limited Purpose Health Care Spending Account  Employees may submit eligible expenses for your spouse (e.g. coinsurance payments; deductibles from another health plan)  It is illegal to submit expenses that have been paid by another insurance plan or reimbursed by another spending account  Children’s medical expenses covered under the employee, as well as the spouse’s, group medical coverage can be submitted  An Explanation of Benefits from both insurance carriers is required

5. February 2010 5 APRIL 2010 Limited Purpose Health Care Spending Account  Employees must select if enrolling in a Health Savings Account  Only dental and vision costs that are not normally eligible under the General Purpose Health Care Spending Account are covered

6. February 2010 6 APRIL 2010 Health Care Spending Account Debit Card  Employee must keep the EOBs and/or receipts  SHPS will request supporting documentation, normally every 2 months  EOBs and/or receipts along with the request letter from SHPS must be submitted for validation purposes  SHPS will submit validation letters online  If SHPS has the employee’s email address, requests will be emailed directly to the individual

7. February 2010 7 APRIL 2010 Health Care Spending Account Debit Card  If documentation is not received after the validation request is issued, the card will be turned off (60 – 90 days)  An overpayment will be noted on the account  When a paper claim is received, a reimbursement will not occur. It will be deducted from the overpayment showing

8. February 2010 8 APRIL 2010 Dependent Care Spending Account  Maximum contribution: $416/ month (maximum of $4,992/ year)  Coverage for new employees is effective the first of the month following one full calendar month of employment  Monthly administration fee: $3.20  Reimbursement requests will be processed after services have been fully rendered  Reimbursement subject to account balance  Department must transfer contributions to SPA before account can be credited

9. February 2010 9 APRIL 2010 Dependent Care Spending Account  Eligible dependents would include:  Children under age 13  Spouse (if mentally or physically disabled)  Any other person who is a qualified IRS dependent, regardless of age, who is mentally or physically disabled

10. Health Savings Accounts

11. February 2010 11 APRIL 2010 Health Savings Accounts  Tax-exempt account that can be used for qualified medical expenses not otherwise covered by the High Deductible Health Plan*  Qualified medical expenses include: HDHP* Deductibles Co-payments Prescriptions and over-the-counter medication Dental services Vision Care  Must be enrolled in a High Deductible Health Plan (HDHP)  Cannot be enrolled in Medicare  Cannot be covered by another Health plan  Cannot be claimed as a dependent on someone else’s tax return

12. February 2010 12 APRIL 2010 Health Savings Accounts  Funds are not subject to forfeiture; rollover from year to year  Maximum allowable contributions for Plan Year 2009:  Single: $3,000  Family: $5,950  Monthly service charge: $3.20  Additional contributions to the HSA can be made outside normal payroll deductions  Contribution tickets are included with the HSA Welcome Kit to make post-tax contributions  It is the HSA account holder’s responsibility to ensure the total contributions do not exceed the maximum allowed by the IRS

13. February 2010 13 APRIL 2010 Health Savings Accounts  Money in the HSA can be used for an emergency situation for a non-qualified expense  The distribution would qualify as taxable income 10% penalty tax would be assessed  NOTE  NOTE: Agencies should not take a December payroll for January coverage, unless the employee already had an HSA account.  Investment opportunities are available through HSA administrator (JP Morgan Chase)  Must maintain a $2,000 minimum account balance to qualify  Investment transfers, contributions changes, and change of beneficiaries can be made anytime during the Plan Year  Catch up provision is provided Age 55 or older may contribute an additional $800 per year above the HSA maximum  Tax Forms required for the HSA: Distributions reported on Form 1099 SA Contributions reported on Form 5498 SA