Section 125 Flexible Spending Accounts & Premium Conversion ENROLL IN 2008 FLEX PLANS 11/1/2007-12/7/ 2007 The University of Arkansas Flexible Benefit (Section 125) plan includes Premium Conversion of eligible insurance premiums and Flexible Spending Accounts (Health Care Reimbursement and Dependent Care). All of these options allow employees the opportunity to take advantage of IRS allowable tax savings. Remember, annual enrollment is required for participation in the Fle xible Spending Accounts (Health Care Reimbursement and Dependent Care Reimbursement Accounts). If you do not re -enroll in your Flexible Spending Account(s), your plan will be cancelled effective 1/1/2008. Premium Conversion allows you to pay your Health Coverage, Dental Coverage and Vision Insurance premiums with tax-exempt dollars. Unlike the Flexible Spending Accounts, Premium Conversion does not require re -enrollment every year. Do not include the amount of your tax-e xempt insurance premiums in your Health Care Reimbursement Account election. Health Care Reimbursement Accounts allow you to pay with tax exempt dollars eligible expenses not covered by insurance plans. The maximum contribution to the Health Care Reimbursement Account is $4,000 per plan year; the minimum is $120 per plan year. ► Eligible expenses include any eligible out-of-pocket health care expenses (incurred during the eligible period of coverage) of the employee, spouse (if filing a joint return), and dependents (if claimed by the employee for federal tax purposes) which are not reimbursed by an insurance plan, regardless of insurance coverage. Examples of eligible expenses are co -payments, deductibles, and coinsurance for all medical, dental, and vision benefit plans; other eligible medical expenses not fully covered by ins urance; and any eligible out-of-pocket medical expenses. Some over-the-counter drugs are also eligible. ► Refer to the “Flexible Benefit Plan Summary Plan Description” found in the forms section of Human Resources’ website at http://hr.uark.edu/forms/ for more detailed information, including a listing of the types of expenses eligible and not eligible for reimbursement through a Health Care Reimbursement Account. ► Check with the professionals at CONEXIS at 1-866-279-8385 before enrolling for Orthodontic Expenses. Certain expenses, such as advance payments, are limited or excluded from reimb ursement eligibility. ► See New Carry-over Section below for new option that takes the sting from use-it-or-lose it rule. Dependent Care Accounts allow you to be reimbursed for day care or after-school care expenses for a child under age 13 or an elderly person or person with disabilities as long as they are claimed as a dependent for federal tax purposes. The maximum contribution is the lesser of $5,000; your salary; your spouse’s salary; or your expenses; the minimum is $120 per plan year. ► Expenses must be work related. Both spouses must be employed. ► The Benefit Card cannot b e used for Dependent Care expenses, only Health Care Reimb ursement expenses . The new carry-over option does not apply to Dependent Care. NEW CARRY-OV ER OPTION HELPS AVOID US E-IT-OR-LOS E-IT The UA has adopted the extended grace period offered under Section 125 for Health Care Reimbursement Accounts. This means that you will have an extra 75 days (January 1, 2008 – March 15 2008) to incur expenses and have those expenses apply to any unused contributions in your 2007 Health Care Reimbursement Account. Please note that expenses incurred from January 1, 2008, through March 15, 2008, that are to b e applied to your 2007 plan ele ction cannot be charge through your Health Care Benefit Card (Deb it Card). These claims must b e filed using a claim form. All Benefit Card transactions applied on or after January 1, 2008, will be deducted from your 2008 election. Employees who wish to incur expenses 1/1/2008 – 3/15/2008 to apply to their unused 2007 elections must pay for those expenses up-front then apply to CONEXIS for reimbursement. Reimbursement requests received by CONEXIS for expenses through 3/15/2008 will first apply to your 2007 left-over elections (if any) and then any remaining amount will then apply to the 2008 elections. Note, CONEXIS must receive all requests for reimbursement of 2007 expenses no later than 3/31/2008. The UA is very e xcited about this option which removes much of the forfeiture risk for participants in a Health Care Flexible Spending Account. Note that the new carryover option does not apply to the Dependent Care Flexible Spending Accounts. USING YOUR HEALTH CARE REIMBURS EMENT FLEXIBLE SPENDI NG BENEFIT CARD The CONEXIS Benefit Card is a convenient and effective way to acce ss your Health Care FSA dollars. Please note the card is for Health FSA use only (not for dependent care). Using the Benefit Card does not mean that your transaction will be paperless. IRS established guidelines require that all benefit card transactions be verified as eligible expenses. Therefore, you may receive a letter or e-mail from CONEXIS requesting verification of purchases made with your benefit card. Documentation Required Please keep all receipts for purchases made with the benefit card. In a ccordance with IRS regulations, CONEXIS is required to request itemized receipts to verify the eligibility of card purchases. All receipts or other proofs of purchase must include the amount of the expense, the date of service, the name of the provider and a description of the purchased service or product. Health and dental plan Explanation of Benefits (EOBs) are excellent sources of documentation. Receipts that do not contain the detailed information described above are not acceptable. Examples of documentation that will not be acceptable are credit card receipts and cancelled checks . Examples of qualified FSA locations and providers include: hospitals, physician offices, dental offices, vision service providers, and pharmacies. If the requested receipt is lost or otherwise unavailable, you must obtain a copy from your provider or insurance carrier. Documentation Is Not Required When: • The expense amount is identical to a pre-defined co-payment amount under your employer’s medical, pharmacy, or vision plans. You may swipe your card for an amount up to five times (5X) the maximum co -payment amount (the total must be a multiple of the co-pay amount). This option is available only to QualChoice participants. QualChoice plan co-payments are $20 or $35 for doctor's office visits and $10, $30, or $50 for prescriptions. • Recurring expenses will not result in a request for documentation as long as the transaction has the same amount and same ven dor location. The transaction will be accepted without docum entation after substantiation is provided for the initial transaction. A merchant using an Inventory Information Approval System (IIAS) such as Sam’s Club, Target, and Wal -Mart (see below). Walgreens also provides a detailed file for auto-substantiation of your benefit card transaction. OVER-THE-COUNTER (OTC) DRUGS Please keep all of your receipts and be aware that they must contain the date of purchase, the name of item (e.g. Nyquil) and the cost of the item. If your receipt contains only an ID number or merchandise code for the OTC product(s) purchased, the receipt is not considered valid and will be rejected. In accordance with IRS requirements, you may be required to obtain a doctor’s note on “dual -purpose” OTC drugs. A partial list of OTC drugs is available on the CONEXIS Web site at www.conexis.org. If you use the benefit card for non- prescription, OTC purchases, you will usually receive a “request for receipt” notice from CONEXIS in accordance with IRS rules. Some national retail outlets with pharmacies will automatically verify the eligibility of your OTC purchases at the point of sale. In such cases you will not receive a request for receipt notice. However, we strongly suggest that you still save all receipts and pay for your eligible OTC items separately from prescription(s). NEW IRS RULES LIMIT WHERE YOU CAN USE YOUR BENEFIT CARD IRS regulations now limit the types of merchants where you can use your benefit card. You will be able to continue to use yo ur card at traditional medical providers (hospitals, doctor’s offices, dentist offices, traditional pharmacies). However, effective 1/1/2008 you will not be able to use your benefit card at non-health care merchants, such as supermarkets, grocery stores, discount stores, and wholesale clubs, unless an Inventory Information Approval System (IIIAS) is in place. In NWA, affected merchants with an IIAS system in place are Sam’s Club, Target, and Wal-Mart. IMPORTANT LIMITATIONS The IRS imposes restrictions on your ability to change, enroll in, o r cancel your Section 125 (Premium Conversion, Health Care Reimbursement, & Dependent Care) elections during the calendar year. Because of these limitations, it is very important that you review these options annually to determine if Section 125 participation will continue to be the best option for you during the upcoming calendar year. The IRS only allows you to determine your premium conversion options or enroll in Flexible Spending Accounts prior to the beginning of each calendar year. Once this decision has been made you are locked into the election for that calendar year. Remember, without a qualifying event, changes to your Premium Conversion elections or Flexible Spending Account elections cannot be made during the calendar year. ► In order to start, stop, or change your elections for the Flexible Spending Accounts or change the amount of your ta x-exempt insurance premiums (Premium Conversion), you must have a qualifying event. See the “Flexible Spending Account Summary Plan Description” found in the forms section of Human Resources’ website at http://hr.uark.edu/forms/ for a list of qualifying events . ► There can be no transfer of funds between the accounts. For example, the dependent care funds cannot be used for reimbursement of health care expenses. ► Dependent Care expenses must be incurred from the first day of the plan year through the end of the plan year, or the participant’s termination date, whichever comes first, regardless of when the expenses are billed or paid . Any amounts in your Flexible Spending Accounts not used by the end of the plan year are forfeited. You will have the first 90 days of 2008 to file for expenses incurred in 2007. ► Health Care expenses must be incurred from the first day of the plan year through March 15 of the following year, regardless of when the expenses are billed or paid. Note, the carry-over option will not apply to employees who terminate employment prior to December 31. You will have the first 90 days of 2008 to file for expenses incurred in 2007. HOW DO I ENROLL? Enroll for your 2008 Flexible Spending Account on-line via the University of Arkansas’ website through webBASIS. It’s quick and easy. Follow these steps: Step 1: Log on to webBASIS at /http://www.uark.edu/basis/ and click on webBASIS Step 2: Log in using your UARK ID and UARK Password: If you do not know your UARK ID and Password, click on Click he re for help with your ID and Password. Follow the instructions there to find your UARK ID and set up your password. Step 3: Log in using your UARK ID and UARK Password: Once you’re logged in, click on Annual Benefits Enrollment. Step 4: START ~ Online Enrollment: In the Flexible Spending Account section, complete your enrollment with your selected annual enrollment amount. Remember, your annual election must be evenly divisible by your 9 or 12 month appointment. Step 5: Complete other Benefits enrollments or elections: Make any health care elections or other changes you wish to make or do nothing with the rest of the enrollment screen if you are not changing your health or vision coverage elections. Step 6: Click on VALIDATE: An y entry errors you have made will appear in red above the section with the error. Correct the entry error and click on VALIDATE again. Step 7: Click on SAVE to save your changes: Be sure to click on SAVE before exiting the enrollment section. You can also change your Premium Conversion election on webBASIS. You can also get a form from the Open Enrollment section of Human Resources website, http://hr.uark.edu/ or from Human Resources at 222 ADMN if you prefer to do your enrollment on paper. If you wish to participate in the Flexible Spending Accounts (Dependent Care and Health Care Reimbursement for 200 8, you must complete the enrollment requirements no later than December 7, 2007. If you have any questions, you can contact Human Resources at (479) 575-2167.
Pages to are hidden for
"Section 125 Flexible Spending Accounts"Please download to view full document