Introduction & Program OverviewPresented by ASIFlex

Two Types of Accounts:◦ FSA

Pre-tax money for out-of-pocket medical expenses

Expenses can be for you, your spouse or any of your tax dependents (regardless of whose insurance the dependent is on)

◦ Dependent Care Assistance Program (DCAP) Allows for reimbursement for childcare expenses

Elder care expenses also eligible

Most employees save at least 20% on each dollar that is contributed For example:

◦ Federal taxes 15%◦ F.I.C.A 7.65%◦ Total 22.65% x $100 = $22.65

Check out the Tax Savings Calculator at www.asiflex.com/pebb to see your expected savings

$200

$200Only$160

HEALTH CARE SPENDING ACCOUNT

Program Overview

All medical expenses as defined in Section 213 of the Internal Revenue Code ◦ Insurance premiums and long term care are not eligible◦ Detailed list of eligible expenses on www.asiflex.com

Qualifying expenses for you or your dependents whether or not on your employer’s insurance policies◦ E.g. your spouse can be on a different employer’s insurance

program and still have expenses qualify through your plan Any medical service provided during the plan year

that insurance does not reimburse

How does the program work?

Enrollment must be completed during the State of Washington’s Open Enrollment Period◦ Open enrollment ends November 30th, 2007◦ Enroll online at www.asiflex.com/pebb

Up to $2,400 per plan year per participant◦ If your spouse works for the State of Washington, you may

each set aside up to the max

Annual election amount deducted over the course of the plan year (January 1, 2008 –December 31st, 2008)

Full Annual Election available to you January 1

How do I access the money?

1) Submit a claim & supporting documentation & receive reimbursement

Or

2) Utilize the FSA Debit card to pay for certain expenses

Option 1

1. Write your name

2. List the services

3. Sign the form

ASIFlex can issue direct deposits to a checking or savings account◦ If you are already enrolled for DD, you don’t need to set

this up again; it will stay the same from year-to-year

You can sign up to receive notice of reimbursements via email

Payments are issued within one business day of receipt of the claim (up to your annual election)

Option 2

The Debit Card is optional to health care FSA users.◦ An application for the card will come with your

confirmation of enrollment packet◦ If you had the card in 2007, you do not have to re-

apply

The debit card will be issued within 10 business days of ASIFlex’s receipt of the application.

If you currently have a card, it is still valid (you do not need to re-apply)

Use the debit card for out-of-pocket medical expenses only◦ Cannot be used to pay for DCAP expenses

Card use is restricted to use at:

1)Known Health Care Providers2)Retail outlets with an inventory control

system in place

Health Care Providers include:◦ Hospitals◦ Health clinics◦ Opticians◦ Dental Offices◦ Pharmacies

Typically pharmacies within grocery stores do not meet this qualification

The card reads the Merchant Category Code (MCC) when it is swiped and the card determines if the provider has an acceptable MCC◦ If it does not have an allowable MCC, the card will be

declined

The card can be used at retail outlets that do not have a health care MCC if the retail store has implemented the inventory control system

This system only allows eligible expenses to be paid for with the card◦ E.g. if you attempt to purchase a six pack of cola and a

bottle of aspirin, the card will pay for the aspirin and then you will have to provide a separate form of payment for the cola

◦ No documentation required for purchases at these stores

Currently in place at:◦ Wal-Mart Stores◦ Sam’s Club◦ Walgreens◦ Drugstore.com

Many more anticipated as of 1/1/08◦ Safeway◦ CVS◦ Jewel/Osco◦ Target

Every debit card transaction will have to be substantiated somehow, either electronically or with a paper claim

Electronic substantiation◦ Known co-pays◦ Multiples of up to five known co-pays

Purchases made at retail outlets with inventory control system

Paper claims must be submitted for all other transactions

ASIFlex will administer the DCAP for services provided from 1/1/08 forward

All claims for services provided in 2007 must be submitted to DRS◦ If you submit claims for services in 2007 to

ASIFlex, they will be returned to you unpaid

Provides a tax break on child/elder care expenses incurred while:

◦ You go to workOr◦ You and your spouse (if married) go to workOr◦ You go to work and your spouse:

Looks for work Pursues an educational opportunity

Other expenses are not eligible.◦ i.e. getting a babysitter for Friday night date

night is not an eligible expense

Children under the age of 13*

Older dependents unable to care for themselves who live in your home at least 8 hours per day

* Must be custodial parent with over 50% custody if divorced.

Day care services

General purpose day camps

Babysitters

Pre-school

Costs of food and transportation if itemized

Educational expenses◦ Includes private schools

Overnight camps

Payments to your spouse or any other dependent of yours

Payments to your child under 19, even if he/she is not your dependent

How does the program work?

Family maximum of $5,000/year◦ This is an IRS maximum per household

Example:$2,600 for the plan year contributed each

paycheck for 26 checks = $100.00 per check

How do I access the money?

1. Write your name

2. List the services

4. Sign the form

3. Have the provider sign the form

April 1 to April 30, 2007

Deposit directly into your bank account

Receive notice of deposit via email

Payments are made within one business day of receipt

Funds in one category cannot apply to expenses in another category.

Expenses for services provided during the plan year and the additional 2 1/2 month grace period.

Unused funds will go back to your employer.◦ Use it or lose it◦ Start small if you are unsure of how much you will

actually spend

2008 Plan year is 1/1/2008 - 12/31/2008

Expenses for services provided 1/1/2009 – 3/15/2009 can be used to claim 2008 Plan Year funds

◦ Grace period provides extra time to incur expenses if you set aside too much money

When filing a claim with ASIFlex, expenses will be automatically applied to old year first, unless the participant requests otherwise

◦ Reversals between plan years are allowed later, but a written request must be provided by the participant before the claims filing deadline

Online through ASIFlex’s website◦ www.asiflex.com/pebb◦ Select “Enrollment”

Or you can submit a paper enrollment form to ASIFlex

All enrollments must be completed by November 30th

You must re-enroll, even if you don’t want your deduction amount to change

Questions?