Flexible Spending Account Q & A

• General FSA Questions
• Health Care Spending Account Questions
• Dependent Care Spending Account Questions

General FSA Questions

How long do I have to turn in claims for reimbursement?
You have until March 31 of the following Plan Year to turn in your spending account claims for qualifying dependent care and health care expenses incurred during the previous Plan Year.

If you terminate participation in the Health Care or Dependent Care Spending Account at any time during the year, whether because of your termination of employment or the occurrence of a life-changing event or otherwise, you may submit a claim for reimbursement of eligible health care expenses after your participation ends. The expenses must have been incurred prior to termination of your plan participation and they must be submitted for reimbursement within 90 days of termination of your plan participation.

How can I determine the balance in my Flexible Spending Account?
If you are enrolled in the Flexible Spending Account plans, you will be able to register on www.flexdirect.adp.com/ehi/ to access FSA Explanation of Benefits regarding submitted claims as well as FSA Account Statements.

What happens at the end of the year if I do not use all of the money in my Flexible Spending Account?
IRS requires that any money remaining in spending accounts at the end of the Plan Year be forfeited. It cannot be carried over into the next Plan Year or be returned to you as cash, since this is pretax money. However, the key is to plan for only those expenses you know you will incur during the Plan Year. If this is your first time to use a spending account, we suggest you contribute only what you know you will incur until you become more familiar with how this account works. To help you keep track of your account balance, the plan administrator, ADP Benefit Services, will issue account statements quarterly and will send to your home an Explanation of Benefits for each claim processed. In addition, ADP Benefit Services will provide information on current claims processed as well as a year-to-date status of your FSA account(s) on www.flexdirect.adp.com/ehi/.

Back to Top

Can I increase/decrease my spending account contributions during the year?
No, not unless you have a qualifying life-changing event, such as loss or gain of a dependent, marriage or divorce, loss of employment, etc. When a qualifying life-changing event occurs, any changes to your spending account must be made within 31 days of the qualifying change.

Note: FSA election changes due to birth, adoption and placement for adoption are effective on the date of the event. For all other life-changing events, FSA election changes are effective on the date of the election change.

I know that my spending account contributions are payroll deducted pretax, but will I owe taxes on the money I am reimbursed at the end of the year?
No. There is no tax liability on this money either when you put it into a spending account or when you receive it as reimbursement by the plan for qualifying dependent care or health care expenses.

Where do I find spending account claim forms?
You have several options here: Print out claims forms for health care and dependent care reimbursements directly from the Flexible Spending Accounts page or you can always visit www.flexdirect.adp.com/ehi/.

Can I have my reimbursement check deposited directly into my personal checking or savings account?
Yes, ADP Benefit Services can arrange for direct deposit. ADP Benefit Services includes a Direct Deposit form in the ADP Benefit Services FSA Welcome Packet. Complete, sign and mail the form along with a voided check or deposit slip to the address provided on the form. Please allow up to 30 days for Direct Deposit to be activated. You can also sign up for Direct Deposit by registering and enrolling in Direct Deposit on www.flexdirect.adp.com/ehi/.

When I file a Health Care Spending Account or Dependent Care Spending Account claim with ADP Benefit Services, when can I expect to receive my reimbursement?
You may submit claims at any time by mail or fax. Please allow five business days for HCSA claims to be processed before the reimbursement is released. DCSA reimbursements are released at the end of the time period in which expenses were incurred. Register for direct deposit into your personal savings or checking account at www.flexdirect.adp.com/ehi/ or have claim checks mailed to your home. Due to banking requirements, direct deposit funds will be available for withdrawal from your account after 48 hours from the date they are deposited.

How often can I submit claim forms for reimbursement?
Claim forms can be submitted as often as you wish, however, requested reimbursements should be accumulated and submitted only after they total the minimum dollar amount of $25. Otherwise, reimbursement will not occur until the end of the plan year. For dependent care claims, you are reimbursed as long as there is money in your account to cover the claim. If you do not have enough money in your account, ADP Benefit Services will hold your request until after your next pay period or until there is enough money in your account to pay the claim in full. You may mail or fax your claim form with claim documentation to ADP Benefit Services at the address and fax number listed on the claim form.

Who decides what is reimbursable with the Flexible Spending Accounts?
ADP Benefit Services will reimburse expenses according to IRS regulations. Consult IRS Publication 502, Medical and Dental Expenses and/or IRS Publication 503, Child and Dependent Care Expenses at www.irs.gov.

Why is the maximum allowed for HCSA $5,000 and DCSA $5,000?
The IRS limits the maximum for the DCSA. The HCSA maximum is set by the employer. Our HCSA maximum amount is recommended by the corporate Benefits Committee.

Is there a minimum amount I can set aside for the Flexible Spending Accounts?
Yes, there is a set minimum of $130 per year for both the DCSA and the HCSA.

If I participate in the FSA plan and I terminate, will a deduction be taken from my last paycheck?
Yes. The normal deduction for flexible spending will be taken on your last paycheck.

Can terminated employees still file FSA claims?
If you terminate participation in the Health Care or Dependent Care FSAs at any time during the year, whether because of your termination of employment or the occurrence of a life-changing event or otherwise, you may submit a claim for reimbursement of eligible health care expenses after your participation ends. The expenses must have been incurred prior to termination of your plan participation and they must be submitted for reimbursement within 90 days of termination of your plan participation.

What happens to FSA contributions (paycheck deductions) when an employee goes on a leave of absence?
For a paid leave of absence, deductions will continue to be taken from paychecks during the leave. For an unpaid FMLA leave of absence, employees may elect to prepay contributions, or upon returning may elect to catch up missed contributions by increasing their remaining paycheck deductions for the calendar year, or may forego missed contributions. For an unpaid non-FMLA leave of absence, employees may elect to prepay contributions. For more information, refer to Unpaid Leaves in the Time Off section of the Employee Handbook. Contact your HR department for details.

Should I notify ADP Benefit Services if I have an address change to be sure my reimbursement checks find me?
There is no need to notify ADP Benefit Services of an address change. In fact, this may cause problems. All address changes should be completed through your local HR department who will, in turn, notify all benefit vendors.

Back to Top

HCSA Questions

What are some examples of health care expenses that may be eligible for reimbursement?
Medical expenses that are not covered or only partially covered by your health care plan may qualify for reimbursement, such as deductibles, medical and drug copays, eyeglasses, contact lenses and solution, orthodontia, out-of-pocket expenses, unreimbursed dental expenses and eye procedures (Lasik) and some over-the-counter drug products. (Consult IRS Publication 502, Medical and Dental Expenses at www.irs.gov for more information).

Do I need to be enrolled in the medical plan in order to participate in a Health Care Spending Account?
No. Your HCSA can be used for expenses incurred by you or your dependents regardless of whether you or your dependents participate in the employee-sponsored medical plan.

Can expenses for a weight loss program be submitted for reimbursement under my HCSA?
Weight loss programs to improve general health or appearance are not reimbursable. However, if an individual has been diagnosed with a specific medical condition such as obesity or hypertension for which a physician prescribes weight loss as treatment, the IRS allows the cost of the weight loss program as a reimbursable claim. The cost of diet food items is NOT reimbursable. The costs of health clubs or spas are NOT reimbursable as well. The diagnosis by the physician along with the receipt for the cost of the program must be submitted with your claim for reimbursement.

Back to Top

I know radial keratotomy is not covered under the company medical plan, but can I submit a claim for reimbursement from my HCSA account to help pay for the procedure? What about cosmetic surgery?
While certain medical procedures, such as radial keratotomy, are not covered by the company medical plan, they are considered eligible medical expenses that can be submitted for reimbursement to your Health Care Spending Account. Consult IRS Publication 502, Medical and Dental Expenses at www.irs.gov for more information on medical procedures that are eligible for reimbursement.

Cosmetic surgery, unless "necessary to treat a deformity relating to a congenital abnormality, a personal injury, or disfiguring disease", is not covered by the company medical plan and is not considered an eligible medical expense that can be reimbursed from your Health Care Spending Account.

Are over-the-counter items eligible for reimbursement under the Health Care Spending Account plan?
Certain over-the-counter drugs and medicines that are prescribed by a qualified healthcare provider and are considered eligible for reimbursement through your HCSA, however, over-the-counter medical supplies that do not represent drugs or medications are considered eligible for reimbursement through your HCSA without a doctor's prescription For more information on OTC items that are eligible for reimbursement please review Over-the-Counter document. The list is not to be considered all inclusive and is subject to change.

What documentation is required when submitting a claim for reimbursement on over-the-counter (OTC) products? A written prescription and receipt is required for those over-the-counter drugs and medicines that are prescribed by a qualified healthcare provider. For over-the-counter medical supplies that do not represent drugs or medications, simply submit a receipt. Receipts for OTC drugs need to contain the name of the item, the date, and the amount of the purchase (but need not contain the name of the person incurring the expense).

I am enrolled in my spouse's medical plan. Can I enroll in the company Health Care Spending Account plan and be reimbursed for eligible medical expenses even if my spouse and I are not covered by the company medical plan?
Yes, you can enroll and submit claims for reimbursement to the company Health Care Spending Account plan for medical expenses even if the employee or dependents are covered under a spouse's plan, provided the expenses are considered eligible medical expenses and are not covered by the spouse's plan.

I just got married and want to increase the amount of money I set aside in my health care spending account. What is the procedure?
Getting married qualifies as a life-changing event and allows you to make some changes to your benefit elections. To make changes to your health care spending account contribution, log in at benefits.ehi.com within 31 days of the life-changing event to enter your new HCSA annual election amount (the new annual amount reflecting the increase or decrease to your original election). When making this midyear election change, it is important that you plan carefully since the money you set aside and the ability to file claims is for health care expenses you incur between the time you make the election change and the end of the plan year (Dec.31).

Note: FSA election changes due to birth, adoption and placement for adoption are effective on the date of the event. For all other life-changing events, FSA election changes are effective on the date of the election change.

DCSA Questions

How much can I contribute to my Dependent Care Spending Account?
You may contribute up to $5,000 annually to a Dependent Care Spending Account, ($2,500 if married and filing separately, or not more than your earned income or your spouse's, whichever is less.) (Minimum annual contribution: $130)

I would like to pre-pay for my daycare needs for a full year. How does the flexible spending account work in that situation?
The IRS requires verification of a claim after it has been incurred and services rendered. In this case, the employee could submit the receipt from the provider for the full year's expense after January 1, of the new plan year. But, a claim would need to be filed for each period (week or month), after the period started, verifying that services were received. The claims for each period would not need to include a copy of the original receipt. It may seem like additional work, but the IRS has stated that claims need to be verified after they are incurred. They assume that a contract could be cancelled and unearned payments refunded to the payor.

I enroll in the Dependent Care Spending Account and my child begins Kindergarten* in September, thereby eliminating the need for daycare. Can I terminate the dependent care deductions?
Yes. Dependent care elections can be stopped/changed when there is a change in the need for care (i.e., child starts school).
* Kindergarten expenses do not qualify for reimbursement.

Back to Top