Flexible Spending Account FSA Overview

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Flexible Spending Account (FSA)
Overview Presented to Date
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FSA Overview

• What is an FSA?
• An FSA is plan that allows employees to set aside
  money out of their paycheck on a pre-tax basis to
  pay for out-of-pocket health care expenses.
• Currently, when employees pay for things like
  office visits, prescription co-pays, eyeglasses,
  dental, over-the-counter medications they are
  using money that has been taxed.
• Under the FSA plan, employees can set money aside
  into an account before payroll taxes are taken to
  pay for these and other eligible expenses.

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Eligible Expenses

• What types of expenses are eligible under an FSA?
• Office visit co-pays
• Prescription co-pays
• Dental and orthodontia bills
• Eyeglasses, contact lenses and supplies
• Prescription sunglasses
• Over-the-counter medications like aspirin, cough
  medicine, allergy medications, bandages
• Chiropractor visits
• Day care expense
• These and many other expenses are available to be
  paid
• for with pre-tax money through the FSA.

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Tax Savings

• How much can an employee save in taxes by
  participating in the FSA?
• Lets look at one example
• A family of four
• Earnings are 50,000.
• The family has 1500 in out of pocket health care
  expenses per year which includes
• office visit co-pays
• dental and vision care
• over-the-counter purchases

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Tax Savings
Without an FSA
1500 in an FSA
Gross Pay 50,000 less Pre-Tax
Deduction 0 Taxable Pay
50,000 less Fed Tax
-7997 State Tax
-2500 F.I.C.A. -
3825 After Tax Pay 35,678
Gross Pay 50,000 less Pre-Tax
Deduction 1500 Taxable Pay
48,500 less Fed Tax
-7622 State Tax
-2425 F.I.C.A.
-3710 After Tax pay
34,743 less Medical Expense -0.00
less Medical Expense -1500
Net Paycheck 34,178
Net Paycheck 34,743 This is an increase
in annual take home pay of 565!
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Tax Savings

• Lets add Dependent Care expenses
• A family of four
• The employee earns 50,000
• The family has 1500 in out of pocket health care
  expenses per year which includes
• office visit co-pays
• dental and vision care
• over-the-counter purchases
• They also have day care expenses of 5000 per
  year

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Tax Savings
1500 in an FSA and 5000 in A Dependent Care
Account
Without an FSA
Gross Pay 50,000 less Pre-Tax
Deduction 0 Taxable Pay
50,000 less Fed Tax
-7997 State Tax
-2500 F.I.C.A. -
3825 After Tax Pay 35,678
Gross Pay 50,000 less Pre-Tax
Deduction 6500 Taxable Pay
43,500 less Fed Tax
-6372 State Tax
-2175 F.I.C.A.
-3327 After Tax pay
31,626 less Med. and DCAP Exp. -0.00
less Medical Expense -1500 Less Day
Care Exp. 5000
Net Paycheck 29,178
Net Paycheck 31,626 This is an
increase in annual take home pay of 2448!
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The Choice Care Card

• The money in the FSA is made available to
  employees with
• The Choice Care Card A special use Mastercard
• Special use means that it will work only in
  certain locations like
• Physician and Dental Offices
• Ambulatory surgery facilities
• Hospital outpatient departments
• Skilled nursing facilities
• Rehab Facilities
• Pharmacies
• Vision Care Centers
• Day Care Centers

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FSA and DCAP Maximums

• Flexible Spending Account (FSA)
• Employees can fund up to _____ out of their
  paycheck on a pre-tax basis for the medical
  portion of the flex plan
• Dependent Care Account (DCAP)
• Employees can fund up to 5000 out of their
  paycheck on a pre-tax basis to pay for eligible
  day care expenses
• Funds must be used within year plus 75 Day Grace
  Period

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FSA and DCAP

• Tools to help employees learn more about FSAs
• Go to www.choicecarecard.com
• Click on the Members button
• Click on the Your Guide to Flexible Spending
  Account button

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Tools to help employees learn more about FSAs
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Keep all Receipts

• Keep all receipts when The Choice Care Card is
  used
• Plan sponsor is required by Federal Law to
  substantiate these claims. In other words, plan
  must prove that the purchases made with The
  Choice Care Card were for eligible medical
  expenses.
• Choice Care performs this substantiation.
• This is required to maintain the tax free status
  of the plan.
• We will ask employees for receipts through
  Receipt Notification process.

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Manual Submission

• There is also a manual submission process
• If for some reason the provider does not accept
  Mastercard you can submit claims to us with a
  claim form.
• We will either write a check or Direct Deposit if
  youd prefer

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Account Balances

• Employees should check account balance before
  using
• The Choice Care Card
• Account Balance information is available three
  ways
• Online
• Annual Statement
• Call Member Services
• Toll Free [phone]
• 800 am to 700 pm Monday Thursday
• 800 am to 500 pm Friday

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The Choice Care Card

• Enrollment Kits
• Questions?