FAQ_Flex_Accounts_Revised_8-19-10_POST_ON_WEB

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					                           Chandler Unified School District Flexible Spending Account (FSA)
                                             Frequently Asked Questions

IMPORTANT INFORMATION

BASIC is the newly approved, flex administrator for Valley Schools Employee Benefit Trust (VSEBT), the benefit
trust of which Chandler Unified School District is a member. After the annual procurement process, all
districts in VSEBT changed to BASIC to save money on administration fees and ensure the integrity of our IRS-
audited, flex spending program.

The following FAQ has been developed to clarify flex spending for medical, dental, vision and dependent
care expense. Please read carefully.

                                                                  General Information

What are the advantages of a flex spending account?
Through bi-weekly payroll deductions, employees are eligible to contribute money, tax free, into a Flex
Spending Account (FSA) to be used for qualified expenses. Qualified expenses fall into two categories: 1)
Dependent care and 2) Medical, Dental and Vision.

When you flex money, you are making a wise financial decision. An FSA saves you money by reducing your
income taxes. Contributions to a Flexible Spending Account are deducted from your pay BEFORE your
Federal, State, or Social Security Taxes are calculated. The end result is that you decrease your taxable
income and increase your spendable income by 25-40% depending on your tax bracket.

If I do not spend the money for qualified expenses, can I get a refund?
Unlike a Health Savings Account (HSA), FSA dollars are "use-it-or-lose-it" funds. If you have any unused funds
at the end of the plan year, those funds are forfeited. Your unused contributions cannot be refunded, nor
can they be rolled over into the next year. However, if you plan carefully, you can take advantage of the
tax savings without worrying about leaving a balance in your account.

Who determines the regulations for Flex Spending Account?
Given that the money is not taxed, IRS is very specific about both the employer's and employee's
compliance to the rules. The IRS regularly reviews the regulations and provides clarification to participating
employers to ensure FSA plans meet all requirements. As your employer, we are required to make sure our
plan complies fully with the IRS guidelines - for your protection and for the protection of the plan.

Can I use my flex debit card for eligible expenses?
Yes, you may use your flex debit card (if the provider accepts cards). However, you may still be asked for
documentation to substantiate the validity of the claim.

What is the advantage of a flex debit card if I still need to submit the documentation?
The flex debit card is a convenience which allows the participant to access the flex funds immediately,
instead of paying for the service out of their pocket, and waiting for reimbursement. In some cases, no
additional documentation is needed, such as participating pharmacies, Chandler traditional plan co-pays,
or recurring dependent care. However, the debit card does not eliminate the need to substantiate the
claim.

Are there other options to make it more convenient to submit receipts?
If it is inconvenient to submit receipts for debit card transactions as requested by BASIC, you may choose not
to use your flex debit card. Instead you may save all receipts and submit at any time during the plan year.
You can even hold all receipts and submit at the end of the year for reimbursement.




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I have used a flex debit card for a number of years, and have never been asked to substantiate the debit
expenses. Why the change now?
During the annual renewal process, our practices were extensively reviewed and it was determined that
significant changes were necessary to be compliant with the regulations and to retain the tax-free benefit of
the plan. If we do not tighten our procedures, we may jeopardize our plan.

Why are the rules less stringent for the use of my HSA account?
Individuals must verify HSA expenses when submitting their income tax.                               Flex spending is not a part of the
income tax documentation.

Can I use a portion of the money in my medical account for dependent care?
No. The medical account and dependent care account are separate. You cannot use your health
account for dependent care expense, or vice versa.

If I have questions about my flex spending account, who should I contact?
Below is the link to the website for BASIC, or you may call customer service at 1-800-444-1922 Ext. 1.
https://www.basiconline.com/

                                                                  Dependent Care Flexible Spending

What expenses qualify for a dependent care flexible account?
You may claim expenses for any dependent (children under 13 or other dependents who are physically or
mentally unable to care for themselves) if you and your legal spouse are employed or actively seeking
employment or attending school full time.

How much can I flex per year for dependent care?
The amount allowable is $5,000 per family for a married couple filing jointly or for a single parent, $2,500 for a
married person filing separately.

Can I pay Registration fees using my debit card?
Yes, but you will need to send a copy of your account statement since registration fees are usually paid prior
to the receipt of program services.

What late fees can I cover with my debit card?
Fees assessed when you are late picking up your child from a childcare center are permitted. However, late
fees due to late payments are not eligible. You will need to take care of late payment fees with another
form of payment.

Are snacks for my child during child care an eligible expense?
Potentially, if the snacks are billed as part of the child care. They would not be eligible if the provider bills for
snacks separate from child care expenses.

Can I use my Dependent Care Account to pay for in home child care?
Yes, however, the provider must claim payments as income. Services may not be provided by someone
who is your minor child or a dependent for income tax purposes. In addition you would need to pay the
expense out of your pocket and submit a receipt along with a Flex Claim Form provided by BASIC on-line at
www.basiconline.com. The daycare provider will need to sign the form as well.

Can I change my Dependent Care election?
If you have had a status change set forth by the IRS, e.g. marriage, divorce, birth/adoption of a child, death,
changes in employment which impact your benefits, you may change your election. In addition, if the
daycare provider increases or decreases fees, you may change your election. However, if a relative caring
for your dependent increases their fees, you cannot change.

How long do I have to change my election if I have a qualifying status change?
Changes in your election must be made within 30 days of the event.

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What is the annual deadline for receipt of services to avoid “losing” FSA contributions?
Services must be provided by June 30th. However, you have 90 days after plan year end to have these
receipts in BASIC’s possession. (September 30th) You cannot spend the money after June 30th and be
reimbursed from the previous plan year account.

If I use my flex spending account debit card to pay for dependent care, do I also have to submit
documentation?
Yes, however, you can complete a FLEX Debit Card Recurring Expense with your first debit card verification
of dependent care. This will allow future transactions to be pre-approved without further requests for
documentation. However, when payment amounts, frequency, or providers fluctuate, BASIC is required by
the IRS regulations to ask for the backup documentation to support the transaction. Forms are available on
our website at
http://www.mychandlerschools.org/19931062316192367/lib/19931062316192367/Flex_Recurring_Expense_Form.pdf

How should I send the documentation to BASIC?

There are two common methods to submit documentation to BASIC.

1) The Flex Claim Form (see link to form below through the district website or BASIC website) may be faxed or
mailed with the detailed receipt of service.
https://www.basiconline.com/downloads/flex/cardclaimform.pdf, OR
http://www.mychandlerschools.org/19931062316192367/lib/19931062316192367/flex_claim_form.pdf

2) By using the Secure Claim Upload on BASIC’s website, you can submit your claims online with ease and
security. First you scan and save copies of your itemized receipts. Then you complete the Flex Card Claim
form online and electronically attach the related documentation. The directions are available on the
BASIC website. (If using a provider other than Community Education, a receipt with the date of service,
description of service, amount paid and vendor name will meet the requirements.)

My childcare is provided through Chandler Unified School District Community Education department. How
should I best submit the documentation?
The Community Education "Parent Portal" has a field where you can choose - VIEW STATEMENT. This receipt
will have all the information needed by BASIC. By using the Secure Claim Upload on BASIC’s website, you
can complete the Flex Card Claim form online and attach the related documentation (receipt). The
directions are available on the BASIC website.

What happens if I do not submit documentation as requested?
If you do not submit your documentation as requested within 30 days, your debit card is deactivated, until
the documentation is received and approved by BASIC. This “deactivation” of the card is an IRS
requirement. Once BASIC receives the receipts, your card will be re-activated.

I have received a notice from BASIC asking for documentation. Is there a transition period before they
deactivate my card?
Because of the changes, BASIC is working with our district during this transition period. Please comply with
the requests as per their requested timeline. Community Education will work closely with BASIC through the
beginning of the October break to assist you with the transition. Beginning October 1st, if employees do not
respond to multiple requests for documentation, cards will be deactivated, and accounts may be
delinquent.

                                                                  Medical Flexible Spending

What are considered eligible expenses for my Medical account?
You may use your Medical account to pay out of pocket medical, dental or vision expenses not covered by
your health, dental or vision plans, such as office and prescription co-pays, dental, glasses/contacts, or
*over-the-counter medicines.



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How much can I flex per year for medical spending?
You can contribute between $500 and $5,000 for 2010/11.

May I use my medical FSA for expenses incurred by my spouse or dependents, even if they are not covered
under my medical, dental and/or vision plans?
Yes, as long as the expenses are eligible under IRS guidelines. (Different rules apply if you are in a High
Deductible Health Plan with a Health Savings Account (HSA). See next question.

If I have a High Deductible Health Plan with a Health Savings Account (HSA 2550 or HSA 1300), can I also
have a medical flex account?
Employees who have High Deductible Health Plans with a Health Saving Account (HSA 2550 or HSA 1300)
may only use a flex spending for limited purposes. Medical costs for you or your dependents do not qualify
for flex spending, even if they are not on a high deductible (HSA) plan. However, you may establish a
“limited purpose” account to be used for eligible dental and vision only for you and your dependent(s).

Are insurance premiums eligible expenses?
No, premiums for group insurance policies from another employer, individual policies, Medicare, and COBRA
are never reimbursable under IRS guidelines.

Can I change my election during the plan year?
If you have had a status change set forth by the IRS, e.g. marriage, divorce, birth/adoption of a child, death,
changes in employment which impact your benefits, you may change your election. Personal financial
hardship is not considered a status change.

How long do I have to change my election if I have a qualifying status change?
Changes in your election must be made within 30 days of the event.

Are some expenses considered ineligible?
Ineligible items include, but are not limited to, Cosmetic Surgery, Teeth Bleaching/Whitening, Nutritional
Supplements/Vitamins, Dietary Supplements (Weight-loss items). For more information refer to the attached
link http://www.irs.gov/pub/irs-pdf/p502.pdf, or call BASIC if you have specific questions. Please note, the
publication is for information use only and not all items listed may qualify for reimbursement under the plan.

Are Naturopathic services eligible expenses?
Yes, if the Doctor is a licensed physician. Some Naturopathic providers are set up to accept the debit card.
However, if they do not accept, you would need to pay for the services out of your pocket and submit 1) a
Reimbursement Form, 2) a copy of the receipt, and 3) a Letter of Medical Necessity (available online at
www.basiconline.com).          You need to submit this letter with each claim submitted for the
vitamins/homeopathic items/supplements. The letter can be used for each purchase throughout the plan
year. A new letter is required for the next plan year.

*Are over the counter drugs considered eligible expenses?
Yes, but only through December 31, 2010. Over the counter medication will no longer be an eligible expense
after December 31, 2010, per the Healthcare Reform guidelines unless you submit a Letter of Medical
Necessity with the receipts. This form can be obtained from the link below
https://www.basiconline.com/downloads/flex/Letter%20of%20Medical%20Necessity%20Fillable.pdf

What is the annual deadline for receipt of services to avoid “losing” FSA contributions?
Services must be provided no later than June 30th. You have 90 days after the plan year ends to submit
receipts to BASIC. (September 30th.) However, you cannot spend the money after June 30th.

Will I have to submit documentation to BASIC when I use my debit card?
You do not need to submit receipts unless BASIC requests these receipts. A number of transactions do not
require additional documentation, such as expenses equal to Chandler traditional plan co-pays,
participating pharmacies, etc. However, documentation is required for many of your transactions.


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If you purchase an item or incur a service and your debit card is not accepted by the provider/vendor, you
will need to pay upfront and submit receipts with the Reimbursement Form to be paid. You will be paid by
direct deposit if you have given this information to BASIC. If not, a check will be sent to your home address.

How should I send the documentation to BASIC?

There are two common methods to submit documentation to BASIC.

1) By using the Secure Claim Upload on BASIC’s website, you can submit your claims online with ease and
security. First you scan and save copies of your itemized receipts. Then you complete the Flex Card Claim
form online and electronically attach the related documentation. Link: https://claims.basiconline.com/

2) The Flex Claim Form (see link to form below) may be faxed or mailed with the detailed receipt of service.
https://www.basiconline.com/downloads/flex/cardclaimform.pdf, OR
http://www.mychandlerschools.org/19931062316192367/lib/19931062316192367/flex_claim_form.pdf

What happens if I do not submit documentation as requested?
If you do not submit your documentation as requested within 30 days, your flex debit card will be
deactivated until the documentation is received and approved by BASIC. This “deactivation” of the card is
an IRS requirement. Once BASIC receives the receipts, your card will be re-activated.

Links to Forms

Recurring Expense Form
http://www.mychandlerschools.org/19931062316192367/lib/19931062316192367/Flex_Recurring_Expense_Form.pdf

Flex Claim Form
http://www.mychandlerschools.org/19931062316192367/lib/19931062316192367/flex_claim_form.pdf

Medical Necessity Form
https://www.basiconline.com/downloads/flex/Letter%20of%20Medical%20Necessity%20Fillable.pdf

Secure Claim Upload
https://claims.basiconline.com/




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