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Frequently Asked Questions - Red Deer College Extension

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Red Deer College Health Spending Account
Frequently Asked Questions

Overview

      Your Health Spending Account (HSA) is a tax-effective benefit program that
       complements the College’s current group Extended Health Care and Dental benefit plans
       by providing you with additional choice for managing your health-related expenses.
      Since your HSA allocations are provided to you by the College as pre-tax dollars, the
       HSA is a tax-effective way of paying for your eligible health-related expenses. You are
       not required to pay any personal income taxes on your allocated HSA dollars as long as
       the medical and dental expenses claimed are considered eligible under Canada Revenue
       Agency’s (CRA) guidelines. Eligible expenses are those currently listed as eligible
       medical expense tax credits in the Income Tax Act.
      Eligible college members will begin to receive dollar allocations effective July 1, 2009.
      The College will provide you with HSA dollars on an annual basis.

What are the advantages of a Health Spending Account?

      Your new HSA adds value to your benefit plan through an allocation of College provided
       dollars that will help pay for your eligible health-related expenses.
      HSA’s allow you to be reimbursed for eligible expenses using the dollars provided by the
       College on which you are not required to pay taxes. As such, health expenses you
       currently pay for out-of-pocket (i.e. those expenses not eligible or fully covered by the
       College’s group Extended Health Care and Dental Care benefit plans) may be paid using
       pre-tax dollars through an HSA.
      In addition, the definition of eligible dependents is broader for an HSA than for your
       group employee benefit plans.

What are the eligibility requirements for College HSA participation?

      If you are eligible to participate in the College’s group Extended Health Care and Dental
       Care plans, you are eligible for the HSA and will automatically be enrolled.
      Note that you will still be eligible even if you have opted-out of the Extended Health Care
       and/or Dental Care plan(s) due to coverage under a spouse’s plan.

When are the College-provided dollars allocated to my HSA?

      If you are eligible to participate in the HSA, your allocation will be deposited into your
       HSA, which is administered by Alberta Blue Cross, commencing July 1, 2009.
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     Expenses incurred July 1, 2009 or later may be eligible for reimbursement from your
      HSA.
     College members commencing employment between allocation dates will receive a pro-
      rated HSA allocation.
     In these cases, eligible expenses incurred from the employee’s date of eligibility (i.e. the
      date of employment) may be claimed.
     College members terminating employment with the College will not be required to forfeit
      their most recent HSA allocation, but may receive reimbursement only for those expenses
      incurred up to the date of termination (expenses incurred after your date of termination
      are not eligible for reimbursement).
     Unused HSA dollars remaining in a terminated college member’s HSA are forfeited to the
      plan following 60 days after the date of termination.
     Canada Revenue Agency regulations do not allow withdrawal of unused HSA dollars as
      cash under any circumstances.

What is the Health Spending Account plan year?

     The HSA plan year is July 1 to June 30 each year.
     You may receive claim cheques every three months.
      Any unused HSA allocations remaining at the end of the HSA year will automatically be
      carried forward to be used to pay for eligible expenses incurred during the next HSA year.
      Unused allocations may be carried forward a maximum of one (1) year – unused dollars
      carried forward from the previous year that remain unused at the end of the current year
      are then forfeited back to the benefit plan for global reallocation. For example, any
      dollars allocated to your HSA by the College during the 2009/10 plan year (July 1, 2009
      to June 30, 2010), which are carried forward but not used for eligible expenses incurred in
      plan year 2010/11 (July 1, 2010 to June 30, 2011), will be forfeited back to the plan
      following the end of the second plan year run off period (i.e. 90 days after June 30, 2011).
     Unlike your HSA allocations, you cannot carry forward expenses after the end of the plan
      year. Expenses incurred within the HSA year can only be claimed in that same year.
      There will be a claims run-off period of 60 days following the end of each HSA plan year
      whereby you can submit HSA claims for expenses incurred up to the end of the plan year.

How does an HSA work?

     Each eligible College employee has his or her own Health Spending Account, and the
      College allocates HSA dollars into each employee’s HSA.
     You may make claims from your HSA for eligible health expenses you and/or your
      dependents incur. You submit claims directly to Alberta Blue Cross (the HSA
      administrator) and eligible claims will be paid quarterly, provided the claims threshold
      minimum is reached. The claims threshold is $50 for each quarterly HSA claims payment
      (made after September 30, December 31, and March 31, and June 30 each year) and is
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       $10 for the end-of-year run-off HSA claims payment (made approximately 90 days after
       year end).
      Health and dental claims made through the College’s group Extended Health Care or
       Dental Care benefit plan which are not completely covered by the plan (i.e. claims for
       which you had to pay a portion out of your own pocket) will automatically flow to your
       HSA, and a claims cheque will automatically be sent to you at each quarterly cheque
       payment period (as long as the eligible claims amount and HSA balance exceeds the
       claims threshold outlined above).

What medical expenses are eligible to be covered under my HSA?

      A list of expenses eligible to be reimbursed from your HSA is available on HR-Online.
       This listing provides examples of medical and dental expenses that would be eligible for
       deductions under the Income Tax Act (and are therefore considered to be eligible for
       coverage under an HSA). Note that Canada Revenue Agency lists are not always current
       due to ongoing changes to tax regulations; therefore, the attached list should be used as a
       guideline only. You can find the most current Canada Revenue Agency guidelines on the
       following website:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbl-eng.html

A few of the many benefits currently deemed to be eligible medical expenses include:

          Charges for Health and Dental expenses in excess of your group benefit coverage
           limits (for example, dental charges in excess of the fee guide limits and co-insurance
           amounts – the portion not covered if the plan does not cover 100%)
          Eye exams, glasses, contacts and laser eye surgery
          Nutritional supplements prescribed by a licensed practitioner
          Elective procedures including cosmetic surgery
          Employee-paid portions of premiums for Extended Health Care, Dental Care and/or
           Vision Care

What expenses are not eligible to be covered under my HSA?

Ineligible expenses include any expense not recognized as an eligible deduction (medical expense
tax credit) within your income tax return. Some examples include:

          Fitness club memberships
          Drugs purchased without a prescription
          Daycare expenses
          Premiums for life insurance plans
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Alberta Blue Cross, as the HSA plan administrator, determines the eligibility of health expenses
submitted for reimbursement.

Are my dependents eligible for coverage through my HSA?

      Your dependents may be eligible for coverage through your HSA.
      The definition of eligible dependents under the HSA is actually broader than for the
       College group Extended Health Care and Dental Care benefit plans. An HSA-eligible
       dependent is defined by Canada Revenue Agency (CRA) guidelines – your HSA may
       reimburse eligible expenses incurred by you, your spouse, your children and any other
       dependents that qualify on your income tax return. This may include your grandchild,
       parent, grandparent, brother, sister, uncle, aunt, nieces, and/or nephews, depending on
       your situation. If you are unsure of the status of a dependent, you can contact the CRA
       for clarification.

How do I submit a claim?

      Alberta Blue Cross is the plan administrator for the College’s HSA. Only claims incurred
       after your eligibility date may be submitted for reimbursement.
      Claims that have already been adjudicated and paid by Alberta Blue Cross for which you
       had to pay a portion of out-of-pocket (including paper and electronically submitted
       claims) automatically flow through to your HSA – you do not need to submit a claim
       form for HSA reimbursement.
      For all other claims you must complete and submit an Alberta Blue Cross HSA claim
       form, attaching all original receipts and/or any Explanation of Benefits statements that
       indicate payment from another benefit provider. Claims may be dropped off at any
       Alberta Blue Cross office or mailed to the address on the claim form. All claims must be
       submitted no later than 60 days after the end of the plan year in which they were incurred.
      Claim forms are available from the College’s Human Resources office, or from the
       Alberta Blue Cross web site (https://www.ab.bluecross.ca/group_forms.html).

HSA reimbursement cheques are automatically produced as per the following guidelines:
          The expenses must be eligible for payment
          You must have College-allocated HSA dollars available in your account
          You must have enough eligible claims to meet the claims threshold amount ($50).
           Any remaining claims submitted within 60 days of the plan year will be paid out
           following the run-off period.
          Your HSA will only pay up to the amount of dollars you have in your account. Please
           note that future year allocations cannot be used to pay for current year expenses; for
           example, an expense incurred during the 2009/10 plan year (July 1, 2009 to June 30,
           2010) cannot be paid with dollars allocated to your HSA during the 2010/11 plan year.
           However, because HSA allocations are rolled over for one year an expense incurred
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         during the 2010/11 plan year may be reimbursed using any unused allocations that you
         received during the 2009/10 plan year.

How is my HSA coordinated with my spouse’s employer’s group benefit plan?

        HSA’s are designed to complement your core benefit plan, and therefore require that
         you access all other benefit plans under which you and your dependents are eligible
         before submitting expenses to your HSA for reimbursement. It is in your best interest
         to follow these guidelines.
        If your spouse has coverage through a benefit plan also administered by Alberta Blue
         Cross, co-ordination of benefits between your spouse’s plan, your College group plan,
         and your HSA are handled automatically. Eligible claims are first submitted for
         payment from you and your spouse’s group benefit plans. Any eligible unpaid
         expenses remaining after the claims are coordinated are automatically transferred to
         your HSA as eligible expenses.
        If your spouse has group benefits coverage with a provider other than Alberta Blue
         Cross, you have to submit claims to both your college and your spouse’s group benefit
         plans prior to submitting any remaining expenses to your HSA. An Explanation of
         Benefits statement from your spouse’s group benefit plan provider is required when
         submitting expenses that involve coordination of benefits to your HSA.

What happens to my HSA upon my termination of employment?

        If you terminate your employment with the College, your remaining HSA allocations
         will be forfeited to the benefit plan for global reallocation. All claims incurred up to
         the date of termination are eligible and you will have a 60 day period following your
         date of termination to submit the eligible expenses for reimbursement.

Who do I contact if I have more questions?

    Contact Wendy Tharou at (403) 343-4020 or wendy.tharou@rdc.ab.ca

				
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