Flexible Spending Accounts

1. Flexible Spending Accounts

2. Did You Know? • The average annual out-of-pocket health care expenses per family are more than $2,000? • Health insurance premiums are expected to increase at a double-digit rate each year? • Child care costs are on the rise?

3. What if you could…? Buy your prescription at a discount?

4. What if you could…? Pay for child care tax-free?

5. Would you pass up savings like these?

6. Flexible Spending Accounts No, of course not! • That’s why your employer offers a benefit program to help • Flexible Spending Accounts • With a Flexible Spending Account, you can save for eligible health care or child care expenses tax-free • That means more for your dollar!

7. Flexible Spending Accounts How do Flexible Spending Accounts work?

8. How does it work? • First, decide how much money you want to deposit into your Flexible Spending Account (FSA) • An equal portion per pay period of your FSA election is taken out of your pay before taxes • These tax-free dollars are put into your Flexible Spending Account • After you incur an eligible expense you submit a Reimbursement Request • You are reimbursed with tax-free dollars, by check or direct deposit, whichever you choose It’s that simple!

9. How much can you save? • It can boost your income! The typical employee can save 30% or more on all eligible expenses • If you Don’t contribute to a Flexible Spending Account, pay $2,000 in medical expense with $0 tax savings • Contribute to a Flexible Spending Account, pay $2,000 in medical expense, but save about $600 in taxes • It is an excellent way to offset rising health and dependent care costs

10. FSA: Why Should You Use It? Boost your income- Health Care FSA Example: * This example is based on an estimated tax rate. Your personal tax rate may vary.

11. FSA: Why Should You Use It? Boost your income- Dependent Care FSA Example: * This example is based on an estimated tax rate. Your personal tax rate may vary.

12. Flexible Spending Accounts Why pay more in taxes, when you can pay less?

13. Are you convinced yet? Now let’s take a closer look at Flexible Spending Accounts There are two kinds of Flexible Spending Accounts (FSAs) • Health Care FSA • Dependent Care FSA

14. Health Care FSA What is It? • It is an easy-to-use benefit that reimburses you for healthcare related expenses not covered by your health insurance What Can You Use It For? • You can use this money to be reimbursed for eligible medical expenses • Prescriptions and over-the-counter supplies and equipment • Deductibles, co-insurance and co-payments • Eyeglasses, contact lenses or LASIK • Dental and orthodontia expenses

15. Health Care FSA* and more... • Prescription sunglasses • Artificial teeth/dentures • Smoking cessation programs • Prescribed birth control • Vaccinations • School and work physicals • Chiropractic care • Psychiatric care • Hearing aids/batteries • Dermatologist’s fees • Wheelchair and / or crutches • Assistance for the disabled • Diabetic supplies • Orthopedic shoes • Well baby care • Amounts over plan limits • Ambulance • Physical therapy • Acupuncture *OTC medications and supplies are no longer reimbursable without a prescription. Review your enrollment kit for the full list of eligible expenses.

16. Dependent Care FSA What is It? • It is a valuable benefit that allows you to pay for day care to take care of your children or elderly parents while you work What Can You Use It For? • For qualifying dependents that are: • Under the age of 13 • Are mentally or physically incapable of self-care spend at least eight (8) hours per day in your home • For work-related dependent care expenses and are primarily for the care of the qualifying person • Child care • Elder care • Before and after school care • Care for disabled dependents

17. More Information? Check your enrollment kit for more information on eligible and ineligible dependents and expenses.

18. FSA: How Does It Work? • Expenses must be incurred during the plan year • You may not roll over leftover funds to the next plan year • You may not change your election amount unless you have an eligible change in status • Carefully determine how much to contribute • These tax-free dollars are placed into your Flexible Spending Account • You can submit a reimbursement request by mail or fax and a check will be mailed to you It’s that simple!

19. FSA: When Do I Enroll? • Review the enrollment kit for more information • The plan year runs from ------------ to ----------- • Estimate your expenses for next year • Your election form is due on --------------

20. What is the Benefits Card? • Similar to a bank debit card • Linked to participants’ Health Care FSA balance • Value on the card at the beginning of the plan year is equal to the participant’s HFSA election • One card issued automatically to all HFSA participants • Employee chooses to use card

21. Where can I use the card? • The Benefits Card will be accepted at medical providers that display the MasterCard logo • Cards can also be used at the pharmacy counter at retailers where a pharmacy is located within the store • Merchants establish an Inventory Information Approval System (IIAS) or certify as a 90% eligible merchant in order for the card to be accepted. • Visit the publications section of www.sig-is.org for an up-to-date listing of merchants.

22. When Will Receipts Be Needed? • IRS requires 100% substantiation of all FSA expenses • When a Benefits Card transaction cannot be automatically substantiated, Ceridian will send the participant a request for receipt • Some typical reasons are: • Insurance co-pay plan information has not been provided to Ceridian at the employer or FSA participant level • The participant does not participate in your insurance plan • The card is used by an employee’s spouse, dependent, or adult child who does not participate in your insurance plan • The expense falls under a co-insurance plan, and a carrier matching feed has not been established • The card is being used at pharmacy that does not have an IIAS, however they have certified that they sell 90% FSA eligible expenses

23. Receipt Request Process • Participants will be notified when additional documentation is needed • 3 days from card swipe if no insurance carrier feeds have been established • 45 days from card swipe if utilizing insurance carrier feed matching • Requests will include specific instructions and card transaction information • Per IRS requirements, if employees do not send the appropriate documentation their card will be temporarily deactivated. Participants have 60 days to provide the requested documentation • If the participant has used the card for an ineligible expense or they have not provided requested receipts within 60 days of the request, they are required by the IRS to pay back the plan • By submitting new unpaid eligible claims to apply against the amount, or • Via check or money order • The participant’s card will be re-activated once they have repaid the plan 23

24. Participant Card Issuance Experience • Card Information Provided in Enrollment Kits • Card overview information • Frequently Asked Questions • Additional card request form • Materials Provided in Card Mailing • Terms & Agreements brochure with card mailing • Card use instructions with card mailing • Participants can request additional cards, free of charge, for their spouse, dependents, and/or adult children18 years or older by completing a form • The card is activated automatically the first time it is used • Card holders can report lost/stolen cards by phone during Ceridian’s normal business hours