© 2007 PAYFLEX SYSTEMS USA, INC. 1 > > January-December (enter plan year)

© 2007 PAYFLEX SYSTEMS USA, INC.

1

<<Company Name>>

<<Plan Year>> January-December (enter plan year)


2

What is an FSA?

Flexible Spending Accounts (FSAs)

Allows you to pay for certain out-of-pocket health care expenses with “pre-tax” dollars. This means you get a tax deduction for these expenses before you ever file your tax return.

You don’t pay Federal income or Social Security taxes on this money and, in most states, you don’t pay state taxes either. On average you will save about 30% on your total FSA contribution.


3

What does this mean to you?

Decrease Taxable Income Increase Spendable Income

Tax Savings!


4

FSA Savings - Example

Real world example: Let’s say someone in your family needs braces at an average

cost of $4,500. This is typically paid over the course of one or two years. If you put this money into a Health Care Flexible Savings Account you will save approximately $1,350 in taxes.


5

Eligible FSA Expenses

Medical & dental deductibles, co-pays and co-insurance

Prescriptions

Over-the-counter medicines & supplies

Hospital expenses

Selected durable medical

Orthopedic devices


6

Eligible FSA Expenses

Eye Glasses, contact lenses

Saline/cleaning solutions

LASIK surgery

Hearing aids and batteries

Orthodontic care

Chiropractic expenses/ co-pays

Insulin, syringes for insulin

http://images.google.com/imgres?imgurl=http://www.familyvisioncare.org/images/alconsolutions.jpg&imgrefurl=http://www.familyvisioncare.org/contactlenses.htm&h=140&w=195&sz=15&hl=en&start=14&tbnid=jcNY-63RUuQpDM:&tbnh=75&tbnw=104&prev=/images%3Fq%3Dcontact%2Blens%2Bsolutions%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG


7

Eligible OTC Medications

Antacids Anti-fungal ointments Antiseptic ointments Cold & Allergy Throat Sprays Lozenges Nasal Sprays Cough Syrups Cough Drops Eye drops

Gas Relief Hemorrhoid medications Laxatives Motion-sickness pills Pain Relievers Arthritis Pain Back / Head Pain Sleep Aids Stop smoking

gums/patches Vapor rubs


8

Ineligible Healthcare Expenses

Anti-Bacterial Soaps Acne Treatments Dandruff Shampoo Dry Skin Creams/Treatments Foot Care Products Hair Loss Treatments Electrolysis – hair removal Cosmetic surgery Teeth Bleaching

Mouthwash Suntan /Sunscreen Lotion Dietary Supplements Supplements Varicose veins treatment Tattoo removal Herbal supplements Child birth classes


9

Calculating Your Contribution

Determine out-of-pocket expenses that recur every year for you and all of your dependents.

Prescriptions, over-the-counter medicines, etc. Braces Routine doctor visits – co-pays/non covered visits

Estimate out-of-pocket expenses that you plan to incur during the plan year (e.g., laser surgery, extra glasses, acupuncture)

Use our expense planning worksheets to assist you in determining your annual contribution (available at www.payflex.com)


10

Special IRS Plan Rules

Once you establish your plan year contribution, you may only change it if you experience a “life event” change.

Qualifying events include: marriage, divorce, and death

Any amount left in your flexible spending account at the end of the plan year will be forfeited unless employer has implemented a “grace period”.

Even if you or another family member are covered under another health insurance plan, you can still participate in the PayFlex FSA plan.


11

New IRS Ruling – Grace Period


12

What is a “grace period”?

An extra 2 ½ month period to use up your healthcare and dependent day care spending account dollars

Internal Revenue & PayFlex Guidelines:

Eligible health care & dependent care expenses incurred after end of plan year, must be incurred and submitted to PayFlex by the end of the 2 ½ month period


13

FSA Educational Tools

Comprehensive participant website Online FSA expense planning

calculator and worksheets Frequently Asked Questions Eligible FSA expenses Express Claims Web-based FSA tutorial Printable enrollment and claim forms

www.payflex.com


14

www.mypayflex.com

Login: New user registration & login screenAccounts: Account Summary with balances, claims history and payroll transactionsDebit Cards: List of debit cards active in your account My Info: Username, password, security question & answer, email address and option for electing e-Notify to receive emails for processed claimsExpress Claims: To submit your claims during the plan year, print claims and instructions to fax claims. Express Claims promises 72 hour turnaround time for claims processing

Education Tools: FSA Tutorial, FAQ’s to help you use PayFlex services, savings calculator, and expense planning worksheetsFSA Calculator: Directs you to a site to calculate your medical care, prescriptions, dental care, eye care, and over-the-counter drugs as well as your potential savingsEligible/Ineligible Expense Items: A comprehensive list of IRS-eligible Health Care & Dependent Care expensesForms: Administrative forms and publications and IRS forms and publications including direct deposit forms and claim formsFAQs: Includes general questions as well as questions regarding filing claims, changing your election, health care, dependent care, flex debit card and grace period.


15

FSA Education Tools

Online FSA tutorial Expense planning tools Enrollment & claim forms

www.mypayflex.com


16

Frequently Asked Questions

How does an FSA account work?

You estimate the amount you will spend on out-of-pocket health care expenses

You decide how much you wish to set aside into your FSA Health Care account

The amounts you wish to set aside into your accounts will come out of your paycheck (on a pretax basis) in equal amounts each pay period

As you incur health care expenses throughout the year, you can submit a claim form along with documentation of your expenses OR file your claims online using our Express Claims

You will be reimbursed via check or direct deposit


17


How much can I put into my FSA Account? Health Care account- maximum determined by your employer Dependent Care account- $5,000 maximum per plan year per the IRS

How often can I enroll? Annually – new employees can join off cycle

How much can I expect to save with and FSA? This depends on your tax bracket but on average about 30% of your

total contribution/election.


18


Do I have to save and turn in my receipt? Yes. You can file your claims via fax, mail or online through our

Express Claims service. Express Claims makes it easy to submit your claim and in most cases your claims are processed within 1 to 2 days.

If I don’t use the money in my account do I lose it? Yes. You must spend all the money in your account by the end of the

benefit year. However, if your employer offers a “grace period”, you will be allowed to use your FSA dollars for an additional 2 ½ months after the end of the plan year.

You will be notified in early November of any funds left in your account.


19

Dependent Care


20

Dependent Care Expenses

Expenses necessary for you and, if married, your spouse to work

Child Care or Adult Day Care Expenses

Care for children under 13 or incapable of support

Care for adult dependent incapable of self care


21

Qualifying Child Care Providers

Private Sitter

Licensed Day Care Provider

An in-home provider as long as the care provider is not your child under age 19, or someone you claim as a dependent for income tax purposes

Summer camps, except overnight camps

Tuition considered a day care expense through preschool


22

Introducing…


23

The PayFlex Debit Card

The PayFlex Card is a “Debit Card” that electronically accesses your health care account to pay for IRS-QUALIFIED medical expenses.

http://www.discovercard.com/apply/platinum?icmpgn=200512_dc_bn_hu_napnap_acq_nap_pla_1


24

Advantages of the PayFlex Debit Card

Increase your personal cash flow

Convenient & easy to use

FAST- no waiting for reimbursement

Provide documentation only as requested

Use at qualified healthcare merchants

accepting MasterCard®


25

PayFlex Debit Card Reminders

Only use for IRS-eligible expenses

Keep your eligible purchases separate from other purchases made

at the same store

Please save your itemized receipts! PayFlex may request

documentation based on IRS guidelines

UNLIMITED USE! Use your PayFlex Card as often as you wish!

Your card does not expire until the expiration date shown on the

card. PayFlex will re-load your card each year for your new

election period


26

Filing Paper Claims

Complete a claim form and submit to PayFlex via mail or fax

Include itemized statement or an Explanation of Benefits (EOB) statement showing your out-of-pocket expense

File paper claims as often as you wish (Remember, claims incurred during your plan year must be filed by March 31, 2008)

Claims can be direct deposited to a checking or savings account


27

Express Claims: filing claims online

Go to www.mypayflex.com Login with your Username & Password, if first time user, please

register for an account Once you are logged in, the Accounts screen will appear, then select

Express Claims on the right side Select the account through which you wish to file a claim Enter your claim information: date of expense, type of expense and

the amount of expense and click the Next button Verify your claim and print your claim Fax claim and itemized receipts to (866) WEB-CLMS

Note: Itemized receipts must include date of purchase, descriptions of purchase, amount of purchase, name of merchant and if a health care claim we will also need the name of the patient.


28

Communication Services

e-Notify - provide us with your e-mail address and you will receive an electronic receipt for paper claims that you submit, letting you know we have processed it. Sign up for e-Notify at www.payflex.com!

Year-end notification- reminder to use your remaining account balance before the end of the plan year.


29

PayFlex Contact Information

Please contact us with any questions!

PayFlex Systems USA, Inc.

700 Blackstone Centre

Omaha, NE 68131

Toll-free: (800) 284-4885

Website: www.payflex.com


30

Thank Youwww.payflex.com

Documents

© 2007 PAYFLEX SYSTEMS USA, INC. 1 > > January-December (enter plan year)