Employee

Flexible Spending Account

Presentation

BANK STREET COLLEGE OF EDUCATION

HEALTH CARE REIMBURSEMENT ACCOUNTS

Flexible Spending Accounts(FSA)

Health Care Accounts:

Health Care Flexible Spending Accounts allow you to

save money from your paycheck on a pre-tax basis to

cover certain medical and dental expenses not

otherwise covered by your health insurance.

Please note: Bank Street College’s maximum amount for 2011 is $5,000.

Whose expenses can be reimbursed?

You can be reimbursed for expenses incurred by you, your

spouse, your children through the age of 26 who will not reach the age

of 27 in the tax year, and any eligible adult tax dependents.

What can be reimbursed?You can be reimbursed for any health, vision, dental, and certain

over-the-counter (OTC) expenses that are medically necessary

but are not covered by your insurance such as:• Deductibles• Co-payments for medical and prescriptions• Dental expenses• Hearing expenses• Vision expenses• Certain over-the-counter products

Flexible Spending Accounts(FSA)

As of January 1, 2011, OTC drugs and medicines will be considered ineligible unless you have a prescription from your physician. Other OTC products are not affected by the new law. 

Health Care debit cards cannot be used to purchase items requiring a prescription. However, the card can be used for other allowable OTC products.

Flexible Spending Accounts(FSA)

Allowable Over-the-Counter Expenses

Effective January 1, 2011, the list of items that remain eligible without a prescription include, but are not limited to band aids, braces & supports, contact lens solution, elastic bandages & wraps, first aid supplies and reading glasses.

• Bandages• Band-aids• Blood pressure monitors

and kits• Braces and supports• Carpal tunnel wrist

supports• Catheters• Cold/hot pack for

injuries• Condoms• Contact lens solution

• Crutches• Denture adhesives• Diabetic supplies• Diagnostic tests &

monitors• Elastic bandages &

wraps• Ear plugs• First aid kits• Gauze pads• Heating pads• Hot water bottles

• Incontinence supplies• Insulin • Liquid adhesive for

small cuts• Medicine dropper/spoon• Ostomy products• Reading glasses• Sitz bath• Thermometers• Wheelchairs, walkers, canes

The following is a condensed list of eligible over-the-counter expenses.

Effective January 1, 2011, the list of items that will require a prescription include, but are not limited to acne medicine, allergy medicine, cough, cold and flu medicine, eye drops, indigestion medicine, laxatives, nasal sprays/drops, ointment for cuts/burns/rashes, and pain relievers.

Over-the-Counter Expenses Requiring a Prescription

• Acne medicine• Allergy & sinus

medications• Antacids• Antibiotic products• Anti-diarrhea medicines• Asthma medications• Bactine• Ben Gay or products for

muscle or joint pain• Bug bite medications• Calamine lotion• Cold sore relief

• Cough & cold medicine• Diaper rash ointments• Digestive/Stomach

medications• Ear drops• Eye drops• First aid cream• Hemorrhoidal cream• Lactose intolerance

medicine• Laxatives• Motion sickness pills

• Nasal sinus sprays• Nicotine gum or patches• Pain relievers• Sinus medications• Sleep aids & sedatives• Spermicidal foams/gel• Sun block & Sun screen• Throat lozenges• Wart remover treatments• Yeast infection treatments

OVER-THE-COUNTERQ & A

How do I submit my over-the-counter medicines or drugs with a prescription so that I can be reimbursed from my Health FSA after 1/1/11?

You should provide :

•a copy of the prescription;

•an itemized receipt or valid documentation for the over-the-counter item(s)

purchased;

•a completed FSA Claim Form

Can I use my EBPA Benefits Card to purchase over-the-counter drugs and medicines after 12/31/10?

No, the IRS has issued guidance stating plans must ensure that the FSA Cards are reprogrammed so that the card can no longer be used to purchase over-the-counter medicines or drugs beginning 1/1/11 (except insulin).

The EBPA Benefits Card will remain available for use at all merchants for other over-the-counter IRS eligible items such as band-aids, elastic bandages, wraps and contact lens solution.

How does this change affect over-the-counter medical devices and supplies?

The new rule does not apply to items for medical care that are not medicines or drugs. Thus, medical items, supplies, and equipment that are available over-the-counter and are not drugs will continue to qualify for reimbursement without a prescription. These items include, but are not limited to, crutches, bandages, contact lens solution, diagnostic devices, and many other over-the-counter products.

I currently use my Health FSA for reimbursement of co-pays, deductibles, prescription drugs, and dental and vision expenses. Will I still be able to be reimbursed for those expenses from my Health FSA as of 1/1/11?

Yes, you will still be able to be reimbursed for those expenses from your Health FSA after 1/1/11. All other eligible Health FSA expenses continue to be reimbursable. There is no change affecting prescription drugs, co-pays, deductibles, dental or vision expenses.

When must Health Care expenses be incurred in order to be eligible?

Healthcare Expenses must be incurred by 12/31.

When must expenses be submitted in order to be eligible?

All expenses incurred during the Plan Year must be submitted by the end of the 3 month run-out period, March 31, of the following plan year.

Flexible Spending Accounts(FSA)

• IRS Ruling:USE IT OR LOSE IT!

• Because the dollars in your FSA are not taxed you must use all of the funds you set aside for that Plan year.

• Estimate your needs carefully.

YOU MUST REMEMBER, any FSA dollars not used within

the plan year will be lost.

Flexible Spending Accounts(FSA)

REMEMBER:

During the year you may not adjust

your election amount without a

“Status Change”.

Flexible Spending Accounts(FSA)

What is a “Status Change”? Change in marital status

Marriage or divorce

New family member Birth, adoption

Spouse’s job change Loss of employment, re-employment

Death

Flexible Spending Accounts(FSA)

DEPENDENT CARE REIMBURSEMENT ACCOUNTS

Dependent Care Account:

A Dependent Care Flexible Spending Account allows you to save money from your paycheck on a pre-tax basis to cover certain costs associated with providing your Dependent(s) with day care while you and your spouse are at work.

Flexible Spending Accounts(FSA)

Who is covered:

You may be reimbursed for expenses incurred on any child under the age of 13 or any other eligible dependents (including, but not limited to, a parent, spouse or step-child) physically or mentally unable to care for themselves, in accordance with IRS regulations.

Flexible Spending Accounts(FSA)

What can be reimbursed?

You can be reimbursed for expenses for which the primary purpose is to assure your dependent’s well being and safety such as:

• Dependent Care in someone else’s home• Dependent Care in your home • Dependent Care in a child or adult day care center• Nursery school expenses• After school programs• Summer day camp

Flexible Spending Accounts(FSA)

What is the maximum amount that I can

elect for a dependent care account?

The maximum per household is $5000.

Please note: Reimbursement for dependent care expenses cannot exceed dollars contributed to your account.

Flexible Spending Accounts(FSA)

Do I have to mail FSA claim forms?Claim forms can be mailed, faxed or

sent electronically through our

Secure Document Submission Portal

at https://secure.ebpabenefits.com

Flexible Spending Accounts(FSA)

EBPA BENEFITS CARDQ&A

Q: What is the advantage of using the EBPA Benefits Card?

When you use the EBPA Benefits Card, you no longer need to pay out-of-pocket and wait for a reimbursement. However, claims may need to be substantiated and therefore, all receipts should be retained.

Q: How do I activate my EBPA Benefits Card?

The first time you use your card, it will be automatically activated. You should choose credit not debit at the card terminal. There is no pin number associated with the card.

Q: Can the Benefits Card be used for medical, dental, hospital, and vision expenses?

Yes, the Benefits Card can be used for these expenses. If the transaction amount does not match your employer’s benefit plan co-payments, the system will allow the transaction. You will not have to pay out-of-pocket, but a letter will be sent to you requesting an itemized receipt. Reminder: All medical, dental, hospital and vision claims should be submitted to your insurance carrier first for processing. The Benefits Card should only be used for the portion you are responsible for. You will be asked to substantiate these transactions. If the provider requires payment up-front, you will need to pay out-of-pocket. Once you receive the explanation of benefits (EOB) and/or an itemized bill from the doctor showing the insurance payment, you can submit a paper claim for reimbursement.

Q: Will I be asked to substantiate any card transactions?

Yes, there are occasions when you will be asked to substantiate your card transaction. For example, if you use your card at the Dentist or at the Optometrist for services other than a co-payment the transaction will be paid, but you will be asked to substantiate the transaction. You will also be asked to substantiate a transaction if your co-payment at a doctor’s office does not match your employer’s medical plan co-payment.

If substantiation is required, a letter is sent within two days after the transaction requesting you substantiate the transaction. If you do not respond to the first letter, a second letter is sent 15 days later. If you do not respond to the second letter, a third letter is sent 15 days after the second letter advising you that your card has been deactivated. Your card will be reactivated once you have substantiated the claim; sent another claim to offset the cost of the previous transaction; or sent in a check to repay the plan. Please call EBPA’s Customer Service Department at (888) 678-3457 should you have any questions regarding substantiation.

Q: Can the Benefits Card be used for over-the-counter expenses?Yes, the card can be used for over-the-counter eligible expenses.

Effective January 1, 2011, there is a new IRS requirement that over-the-counter (OTC) drugs and medicines such as Tylenol, aspirin, etc. must be accompanied by a physician's prescription in order to be reimbursed under FSA’s. If a physician’s prescription is obtained, a paper claim will need to be submitted for reimbursement. The card cannot be used to purchase these items.

Insulin and other OTC items, such as band-aids, will continue to be eligible without a prescription and can be purchased with your EBPA Benefits Card at all eligible vendors.

Eligible over-the-counter items are auto-substantiated through a process called the “Inventory Information Approval System” (IIAS).The IIAS is the retailer’s point of sale system which identifies eligible healthcare FSA purchases by comparing the inventory control information (e.g., UPC or SKU number). The list is restricted to “eligible medical expenses” as described in Sections 213(d) of the IRS code. The eligible medical expenses are totaled and sent to EBPA’s card system which approves the payment and no receipts for these approved items will be requested. A link to an updated list of IIAS merchants can be found on our website home page as well as on your FSA login page.

For a list of eligible over-the-counter expenses, visit www.ebpabenefits.com, or if you have questions, please feel free to call EBPA’s customer service unit at 1-888-678-3457. Remember to save your receipts in case they are required.

Q: Do I choose debit or credit at the card terminal when I use my card?

You should choose credit. There is no pin number associated with the card.

Q: What happens if there is not enough money in my account to pay the full cost of the service?

The transaction will be denied. You will have to pay for the product or service and submit the itemized bill/receipt, along with a claim form.

Q: If I use my card for doctor’s visits will I be asked to submit a receipt?

You will not be asked for a receipt if the transaction amount matches your employer’s benefit plan office visit co-payment. If the transaction amount is a different amount such as the co-payment of a spouse’s plan that does not match your employer’s co-payment, the system will allow the transaction and you will not have to pay out-of-pocket. However, a letter will be generated and sent to you requesting substantiation.

Q: If I use my card for a Prescription will I be asked for a receipt?

You will not be asked for a receipt if the pharmacy has the Inventory Information approval System (IIAS) as noted earlier. The IIAS system will automatically approve all prescriptions and you will not be asked for a receipt.

The IRS has ruled that the Benefits Card can only be used at pharmacies that have the IIAS system in place. You will be able to purchase prescriptions at pharmacies that do not have this system, however, you will need to pay for the prescription and submit a paper claim for reimbursement.

Q: What are the options for submitting orthodontic expenses to EBPA for reimbursement under a Health Care Reimbursement Account?

On a monthly payment plan, once the card is used for the first payment, a letter will be generated requiring you to substantiate the transaction. When you send the substantiation, you can indicate that this is a recurring transaction by noting “Recurring Expense” on the Substantiation Request Letter. Once we receive this information, we can program the system to automatically approve the monthly transaction.

If the Orthodontic service is billed for the year, you may use the Benefits Card, but you will be asked to substantiate. You can also file a paper claim for reimbursement with the explanation of benefits (EOB) as your itemized receipt.

Q: Do I have to use the Benefits Card?

No, you do not have to use the Benefits card. The Benefits Card is provided as a convenience. If you choose not to use the Benefits Card, you may send in a paper claim form with the proper documentation for reimbursement.

Q: Does my online FSA account information display both paper claim submissions and Benefits Card claims?

Yes, when you go online to view your personal account

activity, paper claim transactions will be listed as “MANUAL” and Benefits Card transactions will be listed as “CARD.”

Q: Do I still need to save receipts?

Yes, you must save itemized receipts for all FSA purchases. You may be asked to submit receipts to verify that all expenses comply with IRS guidelines.

Q: Do I need a new Benefits Card each year?

No. The Benefits Card is valid for three years from date of issue as long as you remain part of your employer’s benefit plan and elect FSA each year. The Benefits Card will be loaded with your new annual election amount at the beginning of each plan year for Health Care and incrementally with each pay period for Dependent Care. The expiration date is three years from date of issue.

Q: Can the Benefits Card be used for Dependent Care expenses?

Yes, the Benefits Card can be used for Dependent Care expenses if the provider accepts credit cards.

Q: If I terminate, when will the Benefits Card be deactivated? Can claims still be submitted for eligible expenses prior to termination?

The Benefits Card is deactivated the date of termination. Paper claims can be submitted for eligible expenses incurred prior to the termination date.

Q: If I go to a drug store or grocery store and purchase over-the-counter items as well as a half gallon of milk and a loaf of bread, do I have to separate the purchases?

Although it is not necessary to separate the purchases, it is recommended.

Q: If I have a question regarding my Benefits Card or account, who do I call?

You should contact EBPA’s FSA Customer Service Department at 1-888-678-3457.