HomeMy WebLinkAboutRESPONSE - RFP - 7526 FLEXIBLE SPENDING ACCOUNT ADMINISTRATORCITY OF FORT COLLINS, CO
Proposal No. 7526
Flexible Spending Account Administration
Presented by:
201 West Broadway, Suite 4C | Columbia, MO 65203
www.asiflex.com
2
TABLE OF CONTENTS
Section I Executive Summary
Section II Proposal Compliance Letter
Section III Questionnaire Responses
Section IV Financial Exhibits
Section V Items Included with Proposal
ASIFlex Formal Proposal (includes samples of employee
communication, claim forms, welcome kit, online account statement,
etc.)
ASIFlex Sample Employer Management Reports
ASIFlex File Specifications
ASIFlex Sample Plan Document
ASIFlex Sample Summary Plan Description
3
SECTION I - Executive Summary
Executive Summary
Application Software, Inc. (ASIFlex) was founded in 1983 and has been administering
pre-tax employee benefit programs since 1987. ASIFlex is a leading provider of pre-tax
employee benefit programs to state government entities in the nation, and currently
provides FSA and Commuter Benefit Program administrative services to 13 state
governments and eight stand-alone university systems. ASIFlex is unique in that
its product line is restricted to the administration of tax-favored employee benefits,
meaning that all financial and administrative resources are devoted to furthering the
company’s administrative and technological capabilities in this arena. The company
does not sell voluntary insurance products, nor does it delve into other administrative or
consultative capacities. ASIFlex’s commitment to one line of service significantly
enhances its abilities to appropriately administer FSA programs and leads to
significantly greater service levels and enrollment for its client groups.
ASIFlex’s forte is tailoring its administrative protocols to meet the needs of its clients. By
leveraging our team’s expertise in pre-tax benefits along with our proprietary
reimbursement software/database, we are able to meet and exceed the needs of our
client groups. We are committed to working closely with benefit staff members to
develop and implement enhanced benefit programs to significantly increase both the
participant and administrator experience when working with the pre-tax spending
programs.
ASIFlex Points of Distinction
Flexibility ASIFlex’s proprietary system allows considerable flexibility to meet
the needs of both employers and participants, and can respond quickly to meet
changing needs. Data files can be accepted in any format!
Dedicated Account Services Team ASIFlex will assign a dedicated Account
Services Team to assist with implementation and on-going service. Additionally,
ASIFlex will meet regularly with the Company's benefit staff to discuss the overall
success of the program and discuss process improvements.
Superior Customer Service Direct access is provided to customer service
representatives, rather than having a participant routed through a telephone
voice system. Callers can speak with an experienced service representative to
ascertain answers to questions in very short order!
4
Optional Debit Card Service ASIFlex partners with Evolution Benefits, the
leading provider of FSA debit cards in the nation, to provide a simple, IRS
compliant debit card to facilitate the participant experience in the FSA program.
ASIFlex anticipates that electronic adjudication rates could exceed 80%, and
could go higher if the Company will work with ASIFlex to help communicate
appropriate use of the card to FSA participants.
Text and Email Alerts ASIFlex provides ongoing communications to
participants to improve awareness of expenditures and account balances.
Participants can sign up to receive test and email notifications of account activity.
Participant Communication ASIFlex provides a full suite of employee
communication materials, and will also send welcome kits to new plan
participants.
Optional Online Annual Enrollment ASIFlex offers an easy online enrollment
process which eliminates manual forms or the need for employers to develop
their own enrollment system.
Carrier Connectivity ASIFlex can coordinate claims processing from multiple
carriers and use these file feeds to issue reimbursements automatically or to
substantiate debit card transactions.
Participant Satisfaction ASIFlex provides a seamless, hassle-free experience.
Claims are typically processed within one business day or within three business
days during peak seasons! Rapid processing and daily reimbursement with direct
deposit ensures a timely and convenient process for participants.
Comprehensive Support and Implementation ASIFlex’s Account Services
Team will provide an efficient implementation process and ongoing
communications and support.
Employer Management Reports In addition to our standard and
comprehensive management reports, ad hoc reporting capabilities are available
at no additional charge.
Compliance ASIFlex will provide assistance with annual non-discrimination
testing through our experienced compliance team. Assistance with reporting and
disclosure requirements is provided through our plan document and summary
plan description development and support from our on-staff legal team.
5
The ASIFlex Difference - Participant Service
Quick and easy access to Customer Service Representatives (CSRs): All
calls to ASIFlex’s customer service center are answered by our experienced
CSRs and not funneled through an automated telephone system. This direct line
to ASIFlex’s customer service center eliminates frustration on the part of callers
as all wait and/or hold times are eradicated and immediate resolution is afforded
to callers. ASIFlex receives regular compliments for both its considerate
customer service and prompt answering of telephone calls.
Text and Email Alerts: Participants can sign up to receive text or email
notifications of account activity. A new mobile app is currently in development!
Easy Claim Filing: Participants can file claims online, use a debit card, or fax or
mail claim submissions!
Rapid next day claim processing and payment: Expedited claim processing
and payment is standard with most claims processed within one to three
business days of receipt!
Flexible reimbursement methods: ASIFlex provides its FSA participants with
these methods of accessing pre-tax dollars:
Electronic Interface with Insurance Providers: ASIFlex can develop an
electronic interface with a client’s insurance provider and/or pharmacy benefit
manager (PBM) so that eligible out-of-pocket expenses are automatically
reimbursed to a participant.
Optional FSA Debit Card: Participants may use a FSA debit card at the
point of sale.
Traditional Reimbursement: Participants may receive reimbursement via
check or direct deposit to a bank account of their choice.
Mobile Application: The mobile app will allow a participant to capture
documentation by using the phone's camera feature and submit that
documentation along with a claim completed on the participant's smart mobile
device. The app will be available for iPhones and Androids by the end of
August 2013. This is in addition to ASIFlex's current mobile website for on-
line account lookup and claim filing.
6
FlexMinder: ASIFlex is in development of a new service that will monitor
participant health plans to identify carrier claims with qualified out-of-pocket
health care expenses that can be reimbursed from a FSA. The client
chooses whether to offer the service to its employees, and the participant
chooses whether to enroll in the service. This service requires no direct
ASIFlex contact with the insurance companies. It is strictly a participant
driven service. If the participant enrolls, FlexMinder will then automatically
prepare and submit FSA claims for the identified amounts and continue to
monitor FSA account balances. By monitoring the FSA accounts, FlexMinder
can help avoid year-end forfeitures resulting in a positive experience for
participants!
Online Account Access 24/7: Participants can access their account
information online 24 hours a day, seven days a week!
.
7
The ASIFlex Difference - Employer Services
Dedicated Client Services Team (CST): ASIFlex will provide an experienced,
dedicated team of benefit professionals to lead the implementation and
administration of the program. During both phases, the CST will work with benefit
staff members to develop the most appropriate benefit program for each client.
Flexible Interface Platform: ASIFlex can accept payroll data in almost any file
format eliminating the need for client IT support for file changes, and will provide its
clients with a secure FTP site for the transfer of sensitive data.
Tailored Monthly Reporting Package: ASIFlex will work with each employer to
tailor the regular reporting package. Ad hoc reports are available upon request at no
additional fee. These reports will be provided electronically to each client.
Fund Retention until Payments are Made: Clients retain all funds until claim
payments are disbursed. This method allows each organization to manage and
retain all interest and forfeitures. ASIFlex simply debits this account for each day’s
payments and will send email notification of the amounts to be debited.
Compliance with IRS Regulations: ASIFlex’s Compliance Team will review the
plan design to insure that adherence to IRS regulations is maintained. ASIFlex does
not allow for reimbursement in methods not allowed explicitly by the IRS.
Administration Manual: ASIFlex provides an employer administration manual
online which describes our processes and procedures in the administration of your
plan.
8
Management Team
John Riddick is the founder and owner of ASIFlex. Under John’s leadership the
company has grown consistently since its inception and has always put the client
and participant needs at the forefront of its business agenda. With over 25 years
of employee benefit administration experience, John has been part of the many
legislative changes that have taken place during those years and has been able to
provide valuable experience when working with clients. John is certified as a
Government Benefits Administrator (CGBA) as identified by the State and Local
Government Association (SALGBA) and as a Flexible Compensation Instructor
(CFCI). He graduated from the University of Missouri in mathematics. As a
member of Phi Beta Kappa, John pursued post-graduate coursework in Business,
Psychology and Computer Science.
Jan Jackson is General Counsel and Chief Compliance Officer. Jan is a leader
who performs well in the ever changing benefit administration environment. With
more than 9 years of experience in providing legal counsel to government
agencies, Jan brings a wealth of public and health-related experience to ASIFlex’s
organization. Prior to joining ASIFlex, Jan was the Interim Executive Director for
the Missouri Consolidated Health Care Plan which provided employee benefits to
more than 106,000 members. Along with providing the company and our clients
with answers to plan-related questions that arise, she will assist in the
preparation of legal documents and analyze legislation as it becomes law. Jan is
a graduate of the University of Missouri with a Juris Doctor and is licensed by the
Missouri Bar Association.
Rock Hall is Chief Financial Officer. Rock oversees all of ASIFlex’s financial
operations and supports the management team in maintaining the company’s
overall strategy in sustained growth and profitability. Rock brings a wide range
of experience in the field of benefit administration, having been part of the
management team of two other Third Party Administrators that experienced
substantial growth during the years of his employment. Prior to joining ASIFlex,
Rock was CFO for Creative Benefits, which was acquired by WageWorks in the
fall of 2008. Rock is a graduate of University of Montana with a BS in Accounting
and is a Certified Public Accountant. He is a Certified Flexible Benefits Instructor
(CFCI) through the Employers Council of Flexible Compensation (ECFC).
Anita Spencer, account executive, is a seasoned benefit professional with over 25
years of experience in the group insurance industry and is recognized as a
subject matter expert for Section 125 plans and other account-based plans. Prior
to joining ASI, she spent eight years with United Health Group in business
development and as a product manager for account-based plans and as a senior
9
strategic account executive for national accounts. Previously, she was vice
president and chief compliance and privacy officer for another third-party
administration firm. Anita also spent 20 years as a broker/consultant for
SilverStone Group, a regional brokerage firm in Omaha, NE. She was most
recently a Principal of the firm, and worked with clients managing their group
health and welfare benefit plans, and managed the Section 125 administration
department. She joined ASI in 2012 and currently works with large ASI clients
with reimbursement plans and COBRA/Direct Bill services and supports the
company's management and marketing efforts.
ASIFlex Organizational Chart
CLIENT
ASI President/CEO
CFO/COO
Account Executive
Account Managers
Data Analysts
Customer Service
Claims Manager
Call Center Manager
Customer Service
Representatives II
Customer Service
Representatives
Finance
Accounting
Debit Card
General Counsel/CIO
IT Support/Network
Administration
Compliance
10
SECTION II - Compliance Letter
August 2, 2013
City of Fort Collins Via Email: purchasing@fcgov.com
215 North Mason Street, 2nd Floor
Fort Collins, CO 80524
Re: Proposal No. 7526-Flexible Spending Account Administration
Ladies/Gentlemen:
On behalf of ASIFlex, we are pleased to present our proposal for the continued administration of the
City's Flexible Spending Account program. Services to be provided are as detailed in the proposal
response and services requestd outside the scope of the proposal will be considered and quoted based
on the scope of the project. ASIFlex agrees to comply with the terms of the RFP and acknowledges
Addendum No. 1.
As a leading provider of innovative employee-benefit solutions since 1987, ASIFlex’s number one priority
is to provide exceptional service at all levels of the organization to both our clients and to their
participants. Our commitment to customer service has led to considerable participation increases for our
current client base, which includes nearly 400 clients nationwide, representing approximately 140,000
plan participants.
The enclosed proposal describes our service capabilities and demonstrates our dedication to our clients
and our core business of flexible spending account administration. We have enjoyed working with the
City for several years and as we move into the future, we welcome the opportunity to work in partnership
to deliver consistent and superior service in order to bring long-term value to the City.
Anita Spencer will be happy to assist with any specific questions you may have regarding this proposal.
Her contact information is:
Ms. Anita Spencer | ASI Account Executive
201 West Broadway, Suite 4C | Columbia, MO 65203
aspencer@asiflex.com
573-999.6632
Thank you for your time and consideration.
Sincerely,
John M. Riddick
President/CEO
11
SECTION IV - Questionnaire Responses
A. General Administration
1. What is the core business you administer?
ASIFlex is a leading provider of pre-tax employee benefit programs to state
government entities in the nation. ASIFlex is unique in that its product line is
restricted to the administration of employee benefits such as FSA, HRA, HSA and
Commuter Benefits, as well as COBRA/Direct Billing services. All financial and
administrative resources are devoted to furthering the company’s administrative
and technological capabilities in this arena. The company does not sell voluntary
insurance products, nor does it delve into other administrative or consultative
capacities. ASIFlex’s commitment to one line of service significantly enhances
its abilities to appropriately administer benefit programs and leads to
significantly greater service levels and enrollment for its client groups.
2. How long have you been administering FSA plans?
Application Software, Inc. DBA ASIFlex was founded in 1983 and has been
administering FSA benefit plans since 1987.
3. What is your target market size, and what size groups do you work with?
ASIFlex's target market is state government entities of any size. Our client base
ranges in size from fewer than ten eligible employees, to 80,000+ eligible
employees. ASIFlex’s forte is tailoring its administrative protocols to meet the
needs of its clients. By leveraging our team’s expertise in pre-tax benefits along
with our proprietary reimbursement software/database, we are able to meet and
exceed the needs of our client groups. We are committed to working closely with
benefit staff members to develop and implement enhanced benefit programs to
significantly increase both the participant and administrator experience when
working with the pre-tax spending programs.
FSA Administration – General
1. What format do you use for accepting claims (web, email, fax, mail)?
ASIFlex provides several claim filing options for plan participants:
Electronic Interface with Insurance Providers: ASIFlex can develop an
electronic interface with a client’s insurance provider and/or pharmacy benefit
12
manager (PBM) so that eligible out-of-pocket expenses are automatically
reimbursed to a participant.
Optional FSA Debit Card: Participants may use a FSA debit card at the point
of sale.
Traditional Reimbursement: Participants may file claims via USPS mail or
toll-free fax and receive reimbursement via check or direct deposit to a bank
account of their choice.
Mobile Application: The mobile app will allow a participant to capture
documentation by using the phone's camera feature and submit that
documentation along with a claim completed on the participant's smart mobile
device. The app will be available for iPhones and Androids by the end of
August 2013. This is in addition to ASIFlex's current mobile website for on-
line account lookup and claim filing.
FlexMinder: ASIFlex is in development of a new service that will monitor
participant health plans to identify carrier claims with qualified out-of-pocket
health care expenses that can be reimbursed from a FSA. The client chooses
whether to offer the service to its employees, and the participant chooses
whether to enroll in the service. This service requires no direct ASIFlex
contact with the insurance companies. It is strictly a participant driven
service. If the participant enrolls, FlexMinder will then automatically prepare
and submit FSA claims for the identified amounts and continue to monitor
FSA account balances. By monitoring the FSA accounts, FlexMinder can help
avoid year-end forfeitures resulting in a positive experience for participants!
2. Will you provide reimbursements by either check or direct deposit? Can each
participant elect one or the other? Is there an additional charge for either process? What
is the turnaround time for reimbursement if by check? Direct deposit?
Yes. ASIFlex can provide reimbursement by check mailed to the home address,
or by direct deposit to a checking or savings account. Each participant may
select the reimbursement method of his/her choice, and can change this option at
any time upon request. There is no additional cost. Claims are processed daily
within one to three business days or receipt, and reimbursements are issued on a
daily basis.
3. What is the minimum amount of FSA reimbursement you will process?
13
ASIFlex defaults to a check minimum of $25, however, the client may choose a
different minimum if they wish. Other electronic reimbursement methods have no
minimum.
4. What is the turnaround time for reimbursement if debit card is not used?
Claims are processed daily within one to three business days, and
reimbursements are issued daily.
5. Will you provide discrimination testing for FSA plans? Indicate if there are any
additional charges.
ASI can provide assistance with annual nondiscrimination testing for the Section
125 plan, the Section 105(h) flexible spending accounts, and the Section 129
dependent care assistance plan. ASI will provide a guide to help identify the
prohibited group (those in whose favor the plan cannot discriminate), as well as
data file specifications. Upon receipt of the complete data file, ASI can provide
testing results. ASI recommends that testing be performed annually soon after
enrollment is completed and any necessary corrections made.
6. Will you and can you administer the City’s FSA plan per our plan document versus a
standardized plan document you may have for your clients?
ASI can and will administer the plan based on the City's plan document
provisions.
FSA Administration – Debit Card
1. Are debit cards automatically sent to ALL participants or does the participant need
request a card? How long does it take to get a card? Are the debit cards already
activated when mailed?
ASI can provide debit card services for health care FSA participants. The
employer may choose to have cards automatically provided to all health care FSA
participants, or may choose to allow each participant to order a card.
2. Is there is a charge for the card? Who pays the charge, the employer or the
Employee? If so, how much?
Debit cards are a value-added service and there is no additional cost to the
employer or participant.
3. Can participants request additional cards for their spouse or dependent(s)? If so, is
there a charge for additional cards?
14
Yes. The participant may order additional cards at no additional cost.
4. Can the participant pay for the debit card out of their FSA account? If so, when will it
be deducted from their account?
Debit cards will be provided as a value-added service and there is no additional
cost to the employer or participant.
5. When is the card issued for new employees?
Upon receipt of the enrollment file, cards are ordered from the issuing card
company and are generally received within two to three weeks.
6. What is the year-end process for de-activating and/or issuing/re-issuing new cards?
Debit cards are issued with a five-year expiration date. Upon expiration a new
card is automatically issued if the employee is a plan participant.
7. Can participants opt out of receiving the card?
The employer may choose to have cards automatically issued to all health care
FSA participants, or may choose to allow each health care FSA participant to
elect a card if he/she wishes.
8. What is the process for canceling the debit card if it is lost or stolen?
The participant may call the telephone number listed in the card agreement, or
ASI, to request the card be inactivated. A new card can be issued at no additional
cost.
B. Customer Service/Account Management
1. Please provide the location of the customer service unit that would be assigned to the
City. Will there be a dedicated person assigned to the City?
All processing and servicing is performed from ASI's centrally located office in
Columbia, MO. The account manager team includes an account manager and
account executive. The account manager will lead the implementation/renewal
process and provide day-to-day services to the employer. The account executive
will provide account oversight, oversee implementation, and assist with strategic
planning, renewals and legislation changes.
2. What are the proposed days and hours of operation staffed by live customer service
representatives for the customer service unit?
15
ASIFlex's customer service representatives (CSRs) are available from 6:00 a.m. to
6:00 p.m. MT Monday through Friday, and from 8:00 a.m. to 12:00 p.m. Saturday
to assist callers.
3. What type of training do your Representatives go through to ensure quality service?
New customer service representatives (CSRs) complete a comprehensive self-
study course including both written and video information on flexible spending
accounts claims procedures and IRS guidelines. Following completion of this
course, a senior claims adjudicator works directly with each newly hired
representative until the senior representative is satisfied the new representative
has a complete understanding of the claims review process. During this
intensive one-on-one step, the senior representative explains each claim
reviewed to the new hire. Then the process is reversed. The new representative
reviews each claim with the senior representative, line by line. Next, the new
representative is placed in the adjudication department and provided with claims
to review each day. The manager of the claims department reviews every claim
adjudicated by the trainee until the manager is completely satisfied with the
results. The claims manager continues to monitor the review process on a
sampling basis for a period of approximately one month.
Telephone training begins at the end of the above training period. Telephone
training includes the use of ASIFlex’s data processing system, as it relates to
telephone inquiries, proper identification of callers, telephone etiquette, and
types of questions that the CSR staff can answer. A veteran customer service
representative will sit with the new representative while the new representative
answers phone calls and offers advice and assistance as needed. New staff
members are released to answer calls whenever the more senior representative is
satisfied with the new representative's performance. ASIFlex’s management team
reviews a sampling of calls during the initial period to ensure that the CSR is
meeting standard protocols. Problem calls are quickly brought to the attention of
the CSR so that changes can be made. Additionally, ASIFlex’s management team
randomly reviews a certain percentage of all calls answered by the customer
service center. These reviews are used as training and in the annual review
process.
Potential employees are screened for past experience in health claims
processing, prior experience with participation or administration of flexible
spending accounts and customer service. A customer service representative's
attitude and ability to learn are more important that prior experience or formal
education. Therefore, ASIFlex hires "attitude" and teaches skills.
16
Each employee uses a procedure manual that is periodically updated with client
specific matters as well as regulatory changes. Information regarding new clients
or client changes are presented and discussed at the monthly update sessions.
Update and review sessions are held monthly. These review sessions include
existing claims and customer service policies as well as new policies that are not
time sensitive. Special sessions are conducted whenever a time sensitive issue
is discovered or when a change in regulation takes place. These sessions are
generally held early in the morning and are repeated later in the day for additional
staff. Additional review sessions are held prior to the open enrollment periods in
order to ensure that all ASIFlex CSRs are well versed on the open enrollment
procedures in place for all of ASIFlex’s clients.
ASIFlex’s customer service center will be available to the City employees during
the open enrollment period to answer questions regarding the mechanics of an
FSA program, eligible expenses and other questions, as they arise.
4. Please provide the number of staff members employed full time within the company.
What is the ratio of your customer service representatives to the number of clients you
service?
ASIFlex employs approximately 80 regular full-time professionals dedicated to
servicing clients. Approximately 45 CSRs provide customer service to nearly 400
clients nationwide which is approximately 9 clients for each CSR.
5. Do you provide a 24-hour toll-free number and/or website access for employee
Questions or access to their account, submit claims, etc.?
ASIFlex provides easy online access 24/7 through the secure website. ASIFlex’s
website is designed to be a valuable resource for its participants. The site is not
designed to sell ASIFlex’s administrative services to potential clients, but it is
intended to foster understanding in tax-favored benefit programs for benefit-
eligible employees nationwide. The site includes user-friendly features such as:
online account detail
easy online claim filing
online confirmation of receipt of fax
helpful videos
expense estimator and tax-savings calculator
detailed list of eligible expenses
link to FSAstore.com with thousands of eligible products
links to pertinent IRS forms and publications
debit card information including a list of compliant IIAS merchants
detailed Frequently Asked Questions section
17
regulatory updates.
Participants may call to speak with a CSR from 6:00 a.m. to 6:00 p.m. MT
weekdays, or from 8:00 a.m. to 12:00 p.m. MT on Saturday.
6. Please provide the most recent calendar year results for the administration office that
will be administering our client’s claims for:
Average speed of answer: 2012 was 12 seconds.
Call abandonment rates: 2012 was 1.2%.
Total number of calls received: 2012 was 281,500 calls.
7. How is an employee notified of an ineligible reimbursement? How is the ineligible
reimbursement reconciled?
Plan participants may choose to receive communication via email/text alerts, or
by mail. ASIFlex will process the claim and send notice to the participant to
explain why the claim is ineligible, and what might be done to make the claim
complete. For example, information such as the date of service or the
description of service may be missing. In this case, the participant could submit
an itemized statement to make the claim complete.
8. How often do you send participants “requests for documentation”?
ASIFlex, in compliance with IRS guidelines, requires each claim to be
accompanied by documentation from an independent third party supporting that
the expense has been incurred. This documentation must contain the name of
the provider of service, the date the service was provided, a description of the
service, the name of the person for whom the service was provided, and the
charge for the service.
Claims are reviewed for validity, supporting documentation, and a signature from
the participant verifying that he or she will not be reimbursed for any claimed
expense from any other source. Dates of service and charges on the billings are
tied to the information entered on the claim form. ASIFlex will verify coverage
eligibility for each claim filed. Eligibility is based upon initial plan year enrollment
and periodic updates supplied by the client. Only those claims or portions of
claims that meet plan and Federal guidelines are approved for payment.
ASIFlex will notify each participant within one to three working days if a claim is
filed that cannot be processed due to IRS or plan guidelines. ASIFlex will include
an explanation of the reason for return and the steps necessary for the
participant to take to rectify the claim. Some examples of invalid claims are those
that:
18
are not signed;
do not have proper documentation;
are outside the participant's dates of coverage;
are filed for a category in which the participant is not enrolled;
are filed by an employee not participating in the plan;
include expenses not allowed under the plan; or
are duplicates of previously requested expenses.
Debit card transactions can be accepted by the FSA administrator without any
follow up documentation if the merchant is an acceptable merchant type such as
a physician's office or hospital and at least one of four other criteria are met.
Transactions are electronically substantiated if:
The dollar amount of the transaction at a health care provider equals the
dollar amount of the co-payment or any combination of any known co-pays
up to five times the highest known co-pay, for the employer-sponsored
medical, vision or dental plan that participant has elected;
The expense is a recurring expense that matches expenses previously
approved as to amount, provider, and time period (e.g., for an employee
who pays a monthly fee for orthodontia at the same provider for the same
amount);
A claims feed is provided from the medical, vision and/or dental provider
and claims information can be matched to debit card transactions; or
The merchant maintains a compliant Inventory Information Approval
System (IIAS) for over-the-counter and prescription medication (this
system is allowable only if the merchant approves only qualifying items; all
other purchased items must be paid for in a split tender transaction.)
Any payment that does not meet the above criteria must be reviewed for
compliance like any other claim.
C. Implementation Services
1. Describe your overall account management services during the implementation.
ASIFlex will assign an account management team (AMT) to work with the City
during the implementation process. The team will include an account executive
and account manager, as well as support from IT, legal and finance. The account
executive is responsible for account oversight, assistance with strategic
planning, regular changes and renewals. The account manager will lead the
implementation process and continue to work with the employer to provide on-
going day-to-day service. An implementation document checklist will be
19
completed to capture contact information, plan design, processing parameters,
funding, reporting, debit card parameters, payroll dates, enrollment method, etc.
ASIFlex will also prepare a timeline and conduct regular touch-point calls with the
City to assure that the implementation process remains on schedule.
As the incumbent, ASIFlex will work closely with the City to assure a smooth and
seamless enrollment and renewal process.
Anita Spencer will service as the account executive and is a seasoned benefit
professional with over 25 years experience in the group insurance industry and is
recognized as a subject matter expert for Section 125 plans. She joined ASI in
2012 and currently works with large ASI clients with reimbursement plan and
COBRA/Direct Bill service, and supports the company's management and
marketing efforts.
Prior to joining ASI she spent eight years with United Health Group in business
development and as a product manager for account-based plans, and as a senior
strategic account executive for national accounts. Previously she was vice
president and chief compliance and privacy officer for another third-party
administration firm.
Anita also spent 20 years as a broker/consultant for SilverStone Group, a regional
brokerage firm in Omaha, NE. She was most recently a Principal of the firm, and
worked with clients managing their group health and welfare benefit plans, and
managed the Section 125 administration department.
Anita earned her Certified Employee Benefit Specialist (CEBS) designation from
the Wharton School and International Foundation of Employee Benefit Plans in
1991 and was part of the charter class earning the Certified Flexible
Compensation Instructor (CFCI) designation through the Employers Council on
Flexible Compensation (ECFC) in 1998. She has been a frequent lecturer at the
annual cafeteria plan symposium for ECFC speaking on topics related to Section
125 plans for plan design, compliance, nondiscrimination testing, claims
administration, communication and HIPAA privacy. She is a member and past
president of the Nebraska Chapter of the International Society of Certified
Employee Benefit Specialists and a member of the Omaha Health Underwriters
organization.
With a history of successful account management through teamwork,
consummate professionalism and exemplary ethics, Anita enjoys meeting new
people and using her skills to partner with clients to build strong and lasting
relationships and improve customer experiences.
20
Galen Young is an Account Manager with more than five years of experience at
ASIFlex serving both public and private sector clients. He is a graduate of the
University of Missouri and has experience with all aspects of ASI products,
including FSAs, HRAs, and HSAs. He joined the ASIFlex team as a customer
service representative in 2008, where he reviewed and approved claims, as well
as assisted participants with their questions and concerns. He was promoted to a
customer service supervisor position in 2009, and then to the account
management team in 2010. Galen is responsible for maintaining existing client
relationships, implementing new clients, and researching and resolving client
concerns.
2. Provide a copy of your proposed implementation timetable with a January 1, 2014
implementation date.
The following page includes a sample of the suggested implementation timeline.
Note that the timeline can be adjusted or accelerated to meet the needs of the
City.
21
SAMPLE FSA IMPLEMENTATION TIMELINE
Note: Schedule can be accelerated as needed.
TASK RESPONSIBLE COMPLETION DATE
Plan Design Call and Implementation
Document Completed
City/ASI Sep 16
Employee Communication Material
emailed to City for distribution to
employees
ASI Sep 23
Administrative Services Agreement
(ASA) and Business Associate
Agreement (BAA) provided to City
ASI Sep 30
Benefit Meeting
City/ASI Oct 2
Secure FTP site established and data
file testing completed
System Set-Up completed
Set-up Online Enrollment, if elected
City/ASI Oct 14
Executed ASA & BAA to ASI
City/ASI Oct 28
Enrollment File to ASI/City
Enrollment File Processed
Confirmation/Welcome Kit sent to
participants
Debit Cards issued
City
ASI
ASI
Card Company
Nov 4
Nov 11
Dec 16
Dec 20
Plan Document/SPD provided to City
ASI Dec 23
Effective Date
2014 Administration
Commences
January 1, 2014
22
3. Will a Client Administration Manual will be included with implementation?
ASIFlex can provide an administration manual as needed. The implementation
document also serves as a source of information related to the administration of
the FSA plan.
4. What, if any, are your implementation costs?
There are no implementation or renewal costs.
D. Data Reporting Capabilities
1. Do you require Social Security # or can you accept alternate ID #s?
ASIFlex can accept either a Social Security number or an alternate ID number.
2. What data is required from an employer initially and on a bi-weekly basis to maintain
your account systems for open enrollment, new hires, terminations, etc.?
Initially, ASIFlex will request annual enrollment information. If the City utilizes
ASIFlex's online enrollment system, an eligibility file would be required in order to
populate the enrollment system. If the City conducts its own enrollment, the City
can provide ASIFlex with an enrollment file in MS Excel format. File
specifications will be provided. On-going, the city would report eligibility
changes and payroll deduction amounts based on the payroll schedule for the
City. File specification will be provided for this purpose.
3. In what format can you receive and transmit eligibility data including additions and
deletions?
Although ASIFlex can accept data in most any format, file specifications will be
provided so that the City can report data in MS Excel format.
4. Please submit a copy of your file format specifications for electronic transmissions.
A sample of the file format specifications is included.
5. Do you have any limitations with electronic payroll systems? Please describe your
technology capabilities.
ASIFlex has no limitations with electronic payroll systems. ASIFlex has the
capability of receiving eligibility and payroll data from any number of payroll
centers, for any payroll frequency, and for an unlimited number of records each
month. File specifications will be provided (MS Excel), however, ASIFlex can
23
accept data in almost any file format and will provide the City with a secure FTP
site for the transfer of sensitive data.
6. Describe the security parameters for your systems both for the employer and the
employees (ex: passwords). Do you require an email address for online access?
Participants are assigned an ASIFlex personal identification number (PIN). The
PIN is provided to the participant via the welcome packet or can also be obtained
by calling ASIFlex customer service. Using this PIN, the participant can then
register to view details of his/her account. The registration process is simple and
provides a secure method of accessing the account information. The member
will establish specific security questions, select a security image (picture), and
create a user name and password. Other than the details of the participant's plan,
there is no other identifying information on the site (such as name or Social
Security or ID Number).
In addition, the employer is set up with its own ASIFlex Employer Portal. The City
determines the staff members who have access to the Employer Portal. Each
staff member is provided with a user name and password.
7. What is your timeframe for receiving annual open enrollment processing dates?
ASIFlex will work with the employer to establish annual open enrollment
timelines. In order to have debit cards issued for new participants, enrollment
data must be received no later than December 6, 2013.
8. Can your systems accommodate the 14 ½ month eligible reimbursement extension?
Yes. ASIFlex's system can accommodate the 2 1/2 month grace period. In
addition, ASIFlex can accommodate any chosen run-out period during which
participants may submit claims.
9. Does the City have the capability to view our participant’s claim and transaction
Status online?
Yes. The employer is set up with its own ASIFlex Employer Portal. The City
determines the staff members who have access to the Employer Portal. Each
staff member is provided with a user name and password. Once the staff
member signs in to the Employer Portal, he or she has a number of options,
including:
access to secure email with ASIFlex
the ability to run reports at the employer’s convenience
access to regularly scheduled management reports at the frequency
determined by the employer
easy access to view specific member account information, including:
24
payroll contribution dates
payroll contribution amounts
claim payments
plan year election amounts
current balance
the ability to upload files to ASIFlex
the ability to download files from ASIFlex
Included below are screen shots from the Employer Portal showing screens that
an Employer would use to run a Year to Date Status report, and a screen shot
from the Employer Portal showing a number of reports and files that are
available to be downloaded by the Employer, as well as a participant account:
25
26
Sample Online Participant Account Detail
27
10. Are you able to furnish reports or electronic files for payment status? How often?
What is included in these reports? Please provide a sample.
Yes. ASIFlex ASIFlex has included descriptions of its most commonly requested
reports below. The reports can be provided in any frequency requested by the
City, and different reports can be provided to different departments on a regular
basis. These reports can be tailored to meet the needs of the City and ad hoc
reports are available at any time, for no additional fee.
Year-to-Date Status Report: This monthly and annual report summarizes (by
person) all year-to-date participant activity. It includes each participant's name,
Social Security Number (or alternate unique identifier), annual election amount,
amount contributed year-to-date, amount requested year-to-date, amount
reimbursed year-to-date, fund balances, and available funds for both health care
and dependent care.
Discrepancy Reports: ASIFlex will receive employee contribution data for each
spending account from each payroll center within the City. ASIFlex will verify
that this actual payroll information matches the expected deductions based on
the original enrollment data and updates due to changes in status. ASIFlex will
send a discrepancy report to the appropriate payroll/personnel center each
payroll cycle that will cite any and all salary reductions that do not match the
expected amounts.
The report lists each employee whose payroll contribution does not match the
amount expected by ASIFlex. The payroll issue date is listed in the top right hand
corner of the page. Each employee's name, Social Security Number and/or
Employee Identification Number, pay cycle and payroll ID are listed for each
employee with a discrepancy. This report is designed to be a communication tool
to identify coverage changes and terminations to ASIFlex.
Reimbursement Listing: The reimbursement listing summarizes claims payment
activity during the specified period within the selected plan year. The total claims
payments for health care and the total claims payments for dependent care are
listed for each day of the reporting period. The number of reimbursements
issued by check and the number of reimbursements issued by direct deposit
(ACH) are also listed. The reimbursement listing can also include detailed
payment information for each participant.
Payment/Contribution Report: The payment/contribution report summarizes each
participant's claims reimbursements and payroll contributions during the
specified reporting period and plan year-to-date through the end of the reporting
28
period. The participant's Social Security Number and/or Employee Identification
Number and name can also be included.
Email daily activity notice: This notice will notify the City of the amounts issued
that day for each flexible spending account. The notice is sent one day in
advance of the effective date of the debits from CIty’s account and can be sent to
any individual (or individuals) designated by the City.
11. Do you provide employer and employee statements if no online or phone access
available? What do your statements look like? Please provide a sample.
ASIFlex provides robust employer management reports and access to participant
accounts 24/7. Participants receive notice of account balances with each
reimbursement, and also have access to detailed account information online 24/7.
The employer may choose to have account statements sent to participants on a
quarterly, semi-annual or annual basis, or may choose to have this information
available online only. Since the online account information is refreshed daily,
ASIFlex recommends providing this information online only. Sample employer
reports and a sample participant account statement are included.
E. Communications
1. Do you provide any of the following (provide samples of materials, reimbursement
statements, etc.):
Plan Documents: Included.
Summary Plan Description: Included.
Enrollment kits: Employee communication provided.
Claim forms: Provided in welcome/confirmation packet and online 24/7.
Explanation of Benefits/Statements: Provided with each reimbursement and
available online 24/7.
Other communication materials: ASIFlex's website provides additional
communication materials such as an extensive listing of eligible expenses, link to
FSAstore.com with thousands of eligible products, frequently asked questions,
expense estimator and tax savings calculator, links to IRS forms and
publications, debit card information and list of participant merchants.
Is there an additional charge for any of these services?
There is no additional cost.
2. Are you available and willing to attend open enrollment meetings? Is there an extra
cost?
29
ASIFlex can provide up to two consecutive days of meetings at no additional
cost.
3. Do you have a “new member” kit available for new enrollees during the year?
In addition to ASIFlex's detailed and educational website, employee
communication can be provided which includes:
FSA Overview
Over-the-Counter FSA Overview
Expense Worksheet
Eligible Expense Listing
Following the close of open enrollment, ASIFlex will mail a welcome
kit/confirmation of enrollment packet to each enrolled participant. This packet
will include a personalized welcome letter, claim forms, instructions for and the
participant’s Personal Identification Number (PIN) required for website personal
account detail access. The welcome letter includes the participant's annual
election amounts for both the health care flexible spending account and the
dependent care flexible spending account, his or her preferred reimbursement
method, and if the participant has chosen direct deposit, the name of the bank
and last three digits of the account number that will be used for direct deposit will
be listed. If the participant has chosen to be notified of claims payment by email,
the email address will be included in the letter. The back of the letter is a
graphical presentation of a sample valid claim for both the dependent care
flexible spending account and the health care flexible spending account.
4. Are we able to tailor new member kit materials to our specifications?
ASIFlex can provide the employee communication material in MS Word format so
that the City can tailor the information as needed.
F. Quality Assurance/Compliance/Financial
1. Describe your quality control and audit procedures.
Customer service quality assurance includes the call center manager monitoring
the telphone system on a daily basis to adjust for call volume as needed in order
to assure speed to answer and abandonement measures are being met.
Additionally, calls are recorded for quality control and training.
Claims are processed on a daily basis and reviews are completed with regard to
completed and signed claim forms, proper documentation to substantiate
30
claimed expenses, qualifying expenses under IRS guidelines and employer plan
parameters, and participant eligibility. Duplicate claim checking is performed.
Every claim is keyed twice (by different processors) and batch totals are
compared to guarantee keying accuracy. CSRs receive extensive training in both
claim processing and customer service skills. Any claim that is not approved as
filed is audited by a second claim reviewer to verify adjudication accuracy. In
addition, approximately one percent of all other claims are audited on a daily
basis. In addition to the above audits, ASI's internal auditor reviews
approximately 200 randomly selected claims for selected employers on a
quarterly basis for adjudication and keying accuracy. Daily audits and second
reviews are performed by the CSR staff. Periodic, typically, quarterly audits of
selected client claims are performed by a dedicated internal auditor. Claim
second review audits are performed daily. Post processing claim audits are
performed quarterly. Claim keying accuracy is checked daily through a double
entry process. Claim adjudication and keying accuracy is audited quarterly. The
entire claim process is reviewed by management weekly. Claim adjudication
accuracy is audited on approximately twenty percent of all claims. Claim keying
accuracy is audited on 100% of all claims.
2. Please confirm that your organization administers all programs according to all
federal laws. How do you stay informed of and implement changes to reflect the
Laws/regulations?
ASIFlex’s Compliance Team will review the plan design to ensure that adherence
to IRS regulations is maintained. ASIFlex does not allow for reimbursement in
methods not allowed explicitly by the IRS. ASIFlex subscribes to industry-related
publications and are members of national associations that provide current and
up-to-date information. Our compliance and legal team monitor regulations and
changes and will assess the impact to clients, participants and ASIFlex's
processes and procedures. ASIFlex will communicate with clients regarding
changes affecting the FSA program.
3. Will you provide the City (not participants/employees) with legislative updates? If so,
how do you obtain this information and how do you disseminate it to the City?
ASIFlex subscribes to industry-related publications and are members of national
associations that provide current and up-to-date information. Our compliance
and legal team monitor regulations and changes and will assess the impact to
clients, participants and ASIFlex's processes and procedures. ASIFlex will
communicate with clients regarding changes affecting the FSA program.
Communication may be through a combination of email, postings online, calls or
meetings.
4. What amount of general professional and liability insurance do you maintain?
General liability is $1,000,000 per occurrence with $2,000,000 aggregate.
31
5. What is your rate guarantee? Are you willing to provide rate caps if you cannot
Provide a multi-year rate guarantee?
Quoted fees will be guaranteed for three years, January 1, 2014 through
December 31, 2016.
6. Provide an outline of your performance guarantees.
ASIFlex does not provide performance guarantees. ASIFlex's processing
guidelines are as follows:
Claim Turnaround Time - Claims are processed within one to three business
days.
Claim Financial Accuracy - 98% of claims will be paid accurately.
Telephone - Answer time 95% within 30 seconds; abandonment not to exceed 3%.
7. Provide a minimum of 3 references.
City of Scottsdale, AZ
Mr. Ken Nemec
480.312.7803
knemec@scottsdale.gov
University of Colorado
Ms. Michelle Martinez
303.860.4260
michelle.martinez@cu.edu
State of Colorado
Mr. Jeff Isham
303-866-2365
jeffrey.isham@state.co.us
32
SECTION IV - Financial Exhibits
Service Features
Health Care and Dependent Care Flexible Spending Accounts
Rapid claim processing within one to three business days
Payment by check or direct deposit to bank account; $25 check minimum
Account statement included with payment
Superior service with quick and easy access to customer service representatives
Extended service hours Monday through Saturday
Email and Text Alerts of account activity
Mobile app in development now for 2013 delivery
FlexMinder service in development now for 2013 delivery
Online claim filing, debit card services, carrier interfaces, faxed or mailed claims
Full-service website for plan participants and employer
Compliance assistance with Plan Documents/summary descriptions, non-discrimination
testing, annual reporting as needed
Employee communication materials, online video library, assistance with WebEx or on-
site meetings
Easy online enrollment services
Enrollment Confirmation/Welcome packets sent to enrollees
Fee Schedule
Set-Up Fee
Initial Plan Year No Charge
Renewal Plan Year No Charge
Monthly Administration per Participant $3.15
Note: Minimum $50 per month
Debit Card Per Month Per Participant No Charge
Replacement of lost or stolen cards No Charge
Employee Communication
PDF documents available No Charge
WebEx Group Meetings No Charge
Onsite Enrollment Meetings 2 consecutive days
provided at no cost
Note: Subsequent days or days requiring separate trip $250 per day, plus travel
expenses; based on staff availability and schedule
33
SECTION V - ITEMS INCLUDED
ASIFlex Formal Proposal (includes samples of employee communication, claim
forms, welcome kit, online account statement, etc.)
ASIFlex Sample Employer Management Reports
ASIFlex File Specifications
ASIFlex Sample Plan Document
ASIFlex Sample Summary Plan Description
CITY OF FORT COLLINS
FORMAL PROPOSAL NO. 7526
FLEXIBLE SPENDING ACCOUNT
ADMINISTRATIVE SERVICES
Page | - 2 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Executive Summary
Application Software, Inc. (ASIFlex) was founded in 1983 and has been administering pre-tax employee benefit
programs since 1987. ASIFlex is a leading provider of pre-tax employee benefit programs to state government
entities in the nation, and currently provides FSA and Commuter Benefit Program administrative services
to 13 state governments. ASIFlex is unique in that its product line is restricted to the administration of tax-
favored employee benefits, meaning that all financial and administrative resources are devoted to furthering the
company’s administrative and technological capabilities in this arena. The company does not sell voluntary
insurance products, nor does it delve into other administrative or consultative capacities. ASIFlex’s
management team feels that the commitment to one line of service significantly enhances its abilities to
appropriately administer FSA programs and leads to significantly greater service levels and enrollment for its
client groups.
ASIFlex’s forte is tailoring its administrative protocols to meet the needs of its clients. By leveraging our team’s
expertise in pre-tax benefits along with our proprietary reimbursement software/database, we are able to meet
and exceed the needs of our client groups. We are committed to working closely with benefit staff members to
develop and implement enhanced benefit programs to significantly increase both the participant and
administrator experience when working with the pre-tax spending programs.
ASIFlex provides its clients with:
Flexibility ASIFlex will work directly with City of Fort Collins and will provide considerable flexibility to meet
the needs of both administrators and participants. ASIFlex’s management team is committed to meeting the
needs of the City, and its participants, and will
diligently work to improve the pre-tax programs
available to all eligible employees.
Dedicated Account Services Team ASIFlex will
create a dedicated Account Services team for the
City. Additionally, ASIFlex will meet regularly with the
City's benefit staff to discuss the overall success of
the program, and to work through any potential
problems.
Live Customer Service Option ASIFlex proposes to
provide the City with direct access to a live customer
service representative, rather than having a
participant routed through an IVR. In the first quarter
of 2013, ASIFlex fielded more than 89,000 calls, and
the average answer time was 8 seconds. This means
that employees will be able to ascertain answers to questions in very short order.
Optional spending account card ASIFlex partners with Evolution Benefits, the leading provider of FSA
debit cards in the nation, to provide a simple, IRS compliant debit card to facilitate the participant experience
in the FSA program. ASIFlex anticipates that electronic adjudication rates for the program will exceed 80%,
and could go higher if the City will work with ASIFlex to help communicate appropriate use of the card to
FSA participants.
Email and text alerts ASIFlex can provide ongoing communications to participants to improve awareness
of expenditures and account balances. The email and text notifications will provide a generic notification to
the participant stating that he/she has had activity on his/her FSA/HRA, and the participant will be provided
a link to log in to ASIFlex’s secure online message center to retrieve the information.
Carrier connectivity ASIFlex can coordinate claims processing from multiple carriers and use these feeds
to issue reimbursements automatically or to substantiate debit card transactions.
Page | - 3 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Participant satisfaction ASIFlex provides a seamless, hassle-free experience. Daily reimbursement, direct
deposit and rapid processing ensure a timely and convenient process for participants (claims are typically
processed within one business day of receipt).
Comprehensive support ASIFlex’s Account Services Team is proposing to provide the City with clear,
concise pre-enrollment and ongoing communications and support.
Employer reporting Standard and ad hoc reporting capabilities are available to the City at no additional
charge.
Compliance services ASIFlex will provide the City with annual non-discrimination testing through our
experienced compliance team, as well as plan document and summary plan description development and
support from our on-staff legal team.
The ASIFlex Difference - Participant Service
Access to a live Customer Service Representative: ASIFlex provides all participants with direct access
to customer service representatives, rather than routing callers through an IVR system. ASIFlex does not
employ the use of phone trees. This direct line to ASIFlex’s customer service center eliminates frustration
on the part of callers as most wait and/or hold times are eradicated and immediate resolution is afforded to
callers with inquiries and/or questions. ASIFlex’s management team regularly reviews calls taken by each
CSR to ensure a high degree of accuracy and courteous behavior are extended on each call. ASIFlex
receives regular compliments for both its considerate customer service and prompt pickup times.
Next day claim processing and payment: Expedited claim
processing and payment is the normal reimbursement cycle for
ASIFlex’s flexible spending account clients. ASIFlex’s participants
have become accustomed to this expedient service and ASIFlex has
found that this method of claims processing and payment has
ingratiated its services with its client base. ASIFlex’s management
team has found that peer-to-peer marketing of ASIFlex’s reliable
services and the benefits inherent with flexible spending accounts
serves to generate considerable interest in the FSA program.
Optional reimbursement methods: ASIFlex provides its FSA
participants with three methods of accessing pre-tax dollars:
Traditional Claim Processing: ASIFlex reviews each claim submission to ensure compliance with all
applicable IRS regulations is achieved. Claims may be submitted to ASIFlex via its toll-free fax and
processed and paid, on average, within one business day of receipt (please note that during peak times
of the year, claim processing may take up to three business days). A participant may sign up to receive
reimbursement via direct deposit and to have all notifications of payment sent via email.
Electronic Interface with Insurance Providers: ASIFlex can develop an electronic interface with a
client’s insurance provider and/or pharmacy benefit manager (PBM) so that eligible out-of-pocket
expenses are automatically reimbursed to a participant.
Optional FSA Debit Card: ASIFlex provides access to an optional FSA debit card that is administered
with strict adherence to appropriate IRS regulations. The card is restricted to purchases made at known
healthcare providers and purchases are auto-adjudicated when the purchase amount matches a known
co-pay, or used at retailers with IIAS.
ASIFlex's hassle-free programs
will allow you and your
employees to maximize savings!
Page | - 4 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Mobile Application: The mobile app will allow a participant to capture documentation by using the
phone's camera feature and submit that documentation along with a claim completed on the participant's
smart mobile device. The app will be available for iPhones by the end of August 2013, Androids by the
end of July 2013. This is in addition to ASIFlex's current mobile website for on-line account lookup and
claim filing.
FlexMinder: ASIFlex is in development of a new service that will monitor participant health plans to
identify carrier claims with qualified out-of-pocket health care expenses that can be reimbursed from a
FSA. The client chooses whether to offer the service to its employees, and the participant chooses
whether to enroll in the service. This service requires no direct ASIFlex contact with the insurance
companies. It is strictly a participant driven service. If the participant enrolls, FlexMinder will then
automatically prepare and submit FSA claims for the identified amounts and continue to monitor FSA
account balances. By monitoring the FSA accounts, FlexMinder can help avoid year-end forfeitures
resulting in a positive experience for participants!
The ASIFlex Difference - Employer Services
Dedicated Client Services Team (CST): ASIFlex will provide an experienced, dedicated team of benefit
professionals to lead the implementation and administration of the program. During both phases, the CST
will work with benefit staff members to develop the most appropriate benefit program for each client.
Flexible Interface Platform: ASIFlex can accept payroll data in almost any file format and will provide its
clients with a secure FTP site for the transfer of sensitive data.
Tailored Monthly Reporting Package: ASIFlex will work with each employer to tailor the regular reporting
package. Ad hoc reports are available upon request at no additional fee. These reports will be provided
electronically to each client.
Fund Retention until Payments are Made: ASIFlex allows each client to retain all funds until such time as
payments are disbursed. This method allows each organization to manage and retain all interest and
forfeitures. ASIFlex will debit this account for each days payments and will send a notification via email to
appropriate individuals that details the amounts to be debited (debits are effective the business day after the
email is sent).
Strict Compliance to IRS Regulations: ASIFlex’s Compliance Team will review the plan design to ensure
that adherence to IRS regulations is maintained. ASIFlex does not allow for reimbursement in methods not
allowed explicitly by the IRS.
Page | - 5 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Administrative Services Overview
Employee Plan Communication
Employee communication is an essential part of pre-tax spending account programs. ASIFlex has
developed and implemented a comprehensive employee outreach campaign for all benefit-eligible
employees. Communication that is overwhelming or overly complex will not be read or it will not be
fully understood. As such, ASIFlex employs a variety of media for providing information to potential
participants.
Benefit Reference Guide
ASIFlex also provide the City with a two page Benefit Reference Guide that can be utilized to
provide more detailed plan-specific information for either the Health Care Flexible Spending Account
or Dependent Care Flexible Spending Account program.
Page | - 6 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Medical Expense Worksheet
ASIFlex will provide the City with a supply of worksheets that can be distributed to employees to help ascertain
the appropriate contribution amount for the health care FSA.
Page | - 7 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Informational Posters
ASIFlex provides its clients with posters that can be placed in strategic locations throughout
administrative buildings and offices.
Page | - 8 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Email Blasts
Page | - 9 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
As a part of its communications campaign, ASIFlex will send a re-enrollment reminder to each enrolled
participant along with the quarterly account summary statement following the end of the third quarter. This
reminder should reach participants just prior to the beginning of open enrollment. ASIFlex’s management
team will work with appropriate City of Fort Collins staff members to develop the contents of the letter.
ASIFlex is proposing to provide the City of Fort Collins with the use of its secure, on-line enrollment portal to
capture elections during the annual open enrollment period. In order to drive the enrollment site, ASIFlex will
require a complete census file from the City at least one week prior to the start of open enrollment. Online
enrollment is not required, and it can be used as the sole source of capturing enrollment, or it can be offered
to supplement paper enrollment forms. ASIFlex has had considerable success increasing enrollment for
groups by using the online system.
Following the close of open enrollment, ASIFlex will mail a confirmation of enrollment packet to each enrolled
participant. This packet will include a personalized welcome letter, claim forms, instructions for and the
participant’s Personal Identification Number (PIN) required for website personal account detail access. The
welcome letter includes the participant's annual election amounts for both the health care flexible spending
account and the dependent care flexible spending account, his or her preferred reimbursement method, and if
the participant has chosen direct deposit, the name of the bank and last three digits of the account number
that will be used for direct deposit will be listed. If the participant has chosen to be notified of claims payment
by email, the email address will be included in the letter. The back of the letter is a graphical presentation of a
sample valid claim for both the dependent care flexible spending account and the health care flexible
spending account.
Samples of each item that is included with the enrollment packet are included on the following pages.
Page | - 10 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Welcome Letter
ASIFlex will provide a welcome letter confirming enrollment details to all the City employees that
choose to enroll in the Flexible Spending program. The sample claim form and instructions will be on
the back side of the letter.
Page | - 11 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Claim Form
ASIFlex will provide each participant with a claim form along with the confirmation of enrollment
letter, and filing instructions are printed on the back of the claim form.
Page | - 12 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Direct Deposit/E-mail Enrollment Form
ASIFlex will provide a paperless notification/payment authorization form for all participants.
Individuals may sign up to have all notifications sent to them via text message and/or email, and to
receive all reimbursements through direct deposit to a checking or savings account.
Page | - 13 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Debit Card Overview/Application
ASIFlex will provide a debit card application to all enrolled employees in the confirmation of
enrollment packet, if the City chooses to offer this option to its employees. The front side provides
an overview of the card and the reverse side allows participants to elect to receive a card.
Page | - 14 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Payroll Interface
ASIFlex and City of Fort Collins will establish an acceptable method for the City to transmit payroll deduction
data for each pay cycle to ASIFlex on a timely basis. Electronic transmission of encrypted files via a secure
FTP site or employer portal is the most efficient and quickest method of data transmission. ASIFlex has the
capability of receiving payroll data from any number payroll centers, for any payroll frequency, and for an
unlimited number of issues each month.
ASIFlex will establish an expected payroll deduction amount for each participant for each plan year. These
expected amounts are established based on the participant's election and payroll cycle and can be modified
by election changes made during the year. The expected payroll deduction amounts will be compared to the
data sent by the City with each payroll cycle and ASIFlex will determine if there are any errors or
discrepancies in the deduction information. There are three types of errors that can result from this
comparison. First, the amount sent for either one of the accounts could be different than the expected
amount. Second, a record could be received for an employee who is not enrolled in the ASIFlex system.
Third, a record could be missing for a participant for whom ASIFlex expects to receive a deduction. ASIFlex's
system will report all of these errors to the ASIFlex payroll processor who will send them to the appropriate
payroll/personnel staff for resolution. ASIFlex will post the payroll deductions as sent from the City to each
participant's account within one day of receipt or on the actual payroll issue date whichever is later. At any
point in time, ASIFlex’s record of each employee’s year-to-date deductions should agree with the City's year-
to-date record of participant deductions. ASIFlex will reconcile payroll data from the City as frequently as the
City sends it.
Claim Funding
ASIFlex will use the following banking arrangements for the funding of paid claims. A bank account will be
established at the bank of its choice by City of Fort Collins that will contain funds that will be drawn upon for
claim reimbursements as disbursements are made to participants. It is anticipated there will be three methods
from which any one participant may choose for claims payment. A participant may choose to be reimbursed
by direct deposit or paper check or he or she may choose to use a FSA debit card. ASIFlex will issue checks
to participants drawn on a disbursement account owned by ASIFlex. ASIFlex will combine each day's totals
for paper checks, direct deposits, and card settlements and issue debits for the total of each day's payments
against the account owned by City of Fort Collins through the ACH system. These debits will be effective with
the first banking day following ASIFlex's release of payment for the claims.
For example, ASIFlex will issue debits for the total of the health care and the total of the dependent care
claims paid on Monday with an effective date of Tuesday. All checks mailed on Monday and all direct
deposits released on Monday will also have a Tuesday effective date. It will be the City’s responsibility to
maintain sufficient funds to cover each day's reimbursements (perhaps as a ZBA account). Each day,
ASIFlex will send an e-mail message to personnel designated by the City listing the debit amounts from the
City's account that will be effective the following day. This procedure provides the City with the opportunity to
maintain control over its funds until they are disbursed, but eliminates the need for daily intervention by the
City's personnel in the reimbursement process. Any interest and forfeitures will remain with the City by using
this banking method. ASIFlex will be responsible for reconciling the ASIFlex disbursement account and the
City will be responsible for its account. The arrangement is efficient and cost-effective for the City.
Claims Process
One of the most important and technical aspects of plan administration is the claims process. ASIFlex is
unsurpassed in its ability to process claims quickly and accurately. ASIFlex's intent is to provide the most
efficient service to both participants and employers. Participants rely on the money expected from a
Page | - 15 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
submitted claim and employers rely on ASIFlex to ensure compliance with appropriate regulations and plan
guidelines.
ASIFlex, in compliance with IRS guidelines, requires each claim to be accompanied by documentation from an
independent third party supporting that the expense has been incurred. This documentation must contain the
name of the provider of service, the date the service was provided, a description of the service, the name of
the person for whom the service was provided, and the charge for the service.
Claims are reviewed for validity, supporting documentation, and a signature from the participant verifying that
he or she will not be reimbursed for any claimed expense from any other source. Dates of service and
charges on the billings are tied to the information entered on the claim form. ASIFlex will verify coverage
eligibility for each claim filed. Eligibility is based upon initial plan year enrollment and periodic updates
supplied by the client. Only those claims or portions of claims that meet plan and Federal guidelines are
approved for payment.
ASIFlex will notify each participant within one working day if a claim is filed that cannot be processed due to
IRS or plan guidelines. ASIFlex will include an explanation of the reason for return and the steps necessary
for the participant to take to rectify the claim. Some examples of invalid claims are those that:
are not signed;
do not have proper documentation;
are outside the participant's dates of coverage;
are filed for a category in which the participant is not enrolled;
are filed by an employee not participating in the plan;
include expenses not allowed under the plan; or
are duplicates of previously requested expenses.
Claims Processing Time
Valid claims are placed into batches and entered into ASIFlex’s reimbursement software by the participant's
Social Security Number (or alternate unique identifier) on average within one business day of receipt.
ASIFlex’s proprietary reimbursement software verifies that the services fall within the participant's dates of
coverage. After all valid claims within each batch are entered, the claims processor generates a "Possible
Duplicate Claims" report for the batch. The processor manually researches all possible duplicates. Any
duplicates are removed from processing and reported to the participant. A different claims processor enters
the total of each claim within the batch in a separate reconciliation program and verifies the totals of both entry
programs. Any discrepancies are resolved before reimbursements are issued.
Valid claims for medical reimbursement will be paid up to the annual election amount, less previously paid
claims, regardless of the amount contributed year-to-date. Dependent care claims are entered as the total
amount requested and paid up to deposits available less any previous reimbursements. Any remaining
requests are carried in the system as outstanding requests and are paid as funds are subsequently
contributed. Once a valid dependent care claim has been filed by a participant, that participant does not need
to re-file that claim in order to receive outstanding funds.
Claims Payment Time and Frequency
On average completed claims are paid within one business day, however during peak times of the year it can
take as many as three business days. Checks and paper direct deposit statements are printed and stuffed by
client groups. A count of the total number of envelopes containing a check and a count of the total number of
envelopes containing a direct deposit statement is made and compared with a similar count determined by the
Page | - 16 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
system. No checks or direct deposit statements are mailed until these counts are reconciled. This ensures
that no envelope contains more than one check or payment advice and protects each participant's privacy. All
reimbursement checks and Automated Clearing House (ACH) direct deposit statements shall be sent no later
than 7:00 p.m. Central Time on the day of reimbursement.
Individual participants will have the option of determining the preferred reimbursement method. Currently,
more than 60% of all participants seek reimbursement via direct deposit. For participants choosing to be
reimbursed via check, ASIFlex will issue all reimbursement checks using its check stock. The cost of checks
and all other contractor forms, envelopes, etc. will be borne by ASIFlex.
Account Balance Information - Explanations of Benefits
An explanation of benefits reimbursement notification including the payment amount, balance or remaining
annual election amount, total claimed year-to-date, total contributed year-to-date, total paid year-to-date, and
pending claims is printed either on the check stub or, in the case of ACH reimbursement, on a separate
statement.
The ACH reimbursement notification has traditionally been, and still can be, mailed to the participant's home.
In 1997, ASIFlex began offering to instead send ACH payment notifications to participants via email. This
features popularity continues to grow, and ASIFlex now has over 68000 participants who have enthusiastically
chosen this option. All email messages are sent the afternoon the reimbursement is made. This option
affords convenience to those participants who have regular contact with the Internet and it is environmentally
responsible, precluding the use of paper materials. In the interest of security, the email ACH explanation of
benefits does not contain the participant's bank account number or Social Security Number. There is no
additional charge either to the client or to its employees for electing the direct deposit and/or e-mail options.
After each day's payments are made, ASIFlex will send an email message to the City notifying the appropriate
staff of the amount and classifications of that day's payments. ASIFlex can also send a weekly summary of
each day's reimbursements to the City via e-mail. Once each month ASIFlex will send an electronic report
listing the total of each day's payments for the previous month.
Debit Card Overview
The Internal Revenue Service, through Revenue Rulings 2003-43, 2006-69 and 2007-02 issued guidelines
that specify the manner in which FSA debit cards can be used to pay tax-favored benefit account claims.
Under certain circumstances, the payments made with the cards can be accepted without further manual
review (of a paper claim and substantiating documentation) and under other circumstances can be accepted
only with manual review of the claim.
Debit card transactions can be accepted by the FSA administrator without any follow up documentation if the
merchant is an acceptable merchant type such as a physician's office or hospital and at least one of four other
criteria are met. Transactions are electronically substantiated if:
The dollar amount of the transaction at a health care provider equals the dollar amount of the co-
payment or any combination of any known co-pays up to five times the highest known co-pay, for the
employer-sponsored medical, vision or dental plan that participant has elected;
The expense is a recurring expense that matches expenses previously approved as to amount,
provider, and time period (e.g., for an employee who pays a monthly fee for orthodontia at the same
provider for the same amount);
A claims feed is provided from the medical, vision and/or dental provider and claims information can be
matched to debit card transactions; or
Page | - 17 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
The merchant maintains a compliant Inventory Information Approval System (IIAS) for over-the-counter
and prescription medication (this system is allowable only if the merchant approves only qualifying
items; all other purchased items must be paid for in a split tender transaction.)
Any payment that does not meet the above criteria must be reviewed for compliance like any other claim.
Proposed Debit Card Program
Due to the restrictions provided by Revenue Rulings 2003-43, 2006-69 and 2007-02, ASIFlex is offering a
debit card program structured in the following way:
ASIFlex’s FSA debit card is restricted to purchases at known health care providers
(such as health clinics, hospitals, etc.) and retailers that have implemented an
appropriate IIAS management system. At the point-of-sale, the ASIFlex debit card
confirms the merchant is an eligible merchant according to the merchant category
code (MCC) coded into the vendor’s credit card processing system and/or the
individual merchant identification number. If a purchase is attempted at a vendor that
has an allowable MCC, and the participant has available funds, the transaction will be
approved. If a participant attempts a purchase at a merchant that does not have an
acceptable MCC and does not meet the aforementioned IIAS, the purchase will be
declined and the participant will have to provide an alternate form of payment. For all
approved transactions, ASIFlex will then attempt to retroactively match the purchase
amount with known co-pay amounts for City of Fort Collins FSA participants. (In order
to adjudicate the known co-pay amounts, the City will have to provide ASIFlex with a data file that details the
known co-pay amounts.) If a participant purchases an item that does not match a known co-pay or is not an
auto-adjudicated purchase, ASIFlex will send the participant notification that substantiating documentation
must be submitted to ASIFlex within roughly six weeks. However, the timing of this is solely up to the client.
Please note that the Revenue Ruling 2006-69 explicitly stated that healthcare FSA debit card transactions
tendered at non-healthcare providers without the inventory control system are not allowed and stated that
merchants such as grocery stores and/or whole sale clubs must have this system in place by 1/1/2007 in
order for FSA debit card purchases to be allowed. In December, 2006, the IRS came out with Revenue
Ruling 2007-02 and provided grocery stores and other similar merchants with a reprieve, extending the
requirement for implementing the IIAS until January 1, 2008. As of January 1, 2008, FSA debit card
purchases cannot be allowed at retail outlets that do not have this inventory system in place. Additionally, RR
2008-104 states that retail outlets that are pharmacies or drugstores must implement IIAS by July 1, 2009, or
the debit card must be declined.
How IIAS Works
Peter goes to Walgreens to purchase Band-Aids and a six pack of Coke. When he gets to the counter, Peter
swipes his FSA debit card for the total purchase amount of $13.00. The Walgreens point-of-sale (POS)
system confirms that the tender type is an FSA spending card and allows the Band-Aids to be purchased with
the card. The POS then splits out the Coke since it is not an FSA eligible expense and the cashier asks Peter
to pay $3.00 in a separate tender type for the soda. Since Walgreens has the appropriate IIAS in place and
does not allow any items to be purchased with the FSA debit card that are not eligible for reimbursement,
Peter will not have to submit any documentation to ASIFlex for follow-up. Additionally, Walgreens will
maintain an auditable database with detailed transaction information, in the event that the City, or the
participant, undergoes an IRS audit.
Page | - 18 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Additional Debit Card Information
As a quick caveat, ASIFlex’s management team does not allow a participant to access his or her dependent
care spending account funds with the FSA debit card. While IRS Revenue Ruling 2006-69 created a safe
harbor for dependent care expenditures purchased with the FSA debit card, the process for substantiating
these purchases is currently cumbersome and somewhat confusing. Instead of adding additional costs to the
administration and consternation amongst its participants, ASIFlex has chosen to focus on reimbursement via
next-day claim processing and payment, with no additional monthly costs to dependent care participants.
Customer Service
All calls to ASIFlex’s Customer Service Center are answered by a live representative capable of answering
almost any question that might arise. ASIFlex’s Customer Service Center is available from 7 a.m. to 7 p.m.
Central Time, Monday through Friday and from 9 a.m. to 1 p.m. Central Time on Saturdays. ASIFlex’s senior
management team has decided that live access to a Customer Service Representative (CSR) is more
important than implementing an automated system that would decrease the service level provided to
ASIFlex’s clients and participants. ASIFlex has established stringent call guidelines to ensure participants are
not required to wait an inordinate amount of time to speak with a CSR. In the first quarter of 2013, ASIFlex
fielded more than 89,000 calls, with an average answer time of 8 seconds.
New customer service representatives (CSRs) complete a
comprehensive self-study course including both written and video
information on flexible spending accounts claims procedures and IRS
guidelines. Following completion of this course, a senior claims
adjudicator works directly with each newly hired representative until the
senior representative is satisfied the new representative has a
complete understanding of the claims review process. During this
intensive one-on-one step, the senior representative explains each
claim reviewed to the new hire. Then the process is reversed. The
new representative reviews each claim with the senior representative,
line by line. Next, the new representative is placed in the adjudication
department and provided with claims to review each day. The
manager of the claims department reviews every claim adjudicated by
the trainee until the manager is completely satisfied with the results.
The claims manager continues to monitor the review process on a
sampling basis for a period of approximately one month.
Telephone training begins at the end of the above training period. Telephone training includes the use of
ASIFlex’s data processing system, as it relates to telephone inquiries, proper identification of callers,
telephone etiquette, and types of questions that the CSR staff can answer. ASIFlex has found that correct
answers to incomplete questions can be a major source of customer misunderstanding. Therefore, part of
ASIFlex's training for new staff and recurrent training for veteran staff includes methods to determine the "real"
question asked. For example, a common question is "My son is 13. I don't cover my son on my insurance.
Can I include his medical expenses in the health care reimbursement account?" However, the "real" question
might be "Can I include his insurance premiums in the health care flexible spending account?" The answer to
the stated question is "yes" while the answer to the "real" question is "no." The customer service
representative must probe for the "real" question. A veteran customer service representative will sit with the
new representative while the new representative answers phone calls and offers advice and assistance as
needed. New staff members are released to answer calls whenever the more senior representative is
satisfied with the new representative's performance. ASIFlex’s management team reviews a sampling of calls
during the initial period to ensure that the CSR is meeting standard protocols. Problem calls are quickly
All calls to ASIFlex are answered by
our friendly and knowledgeable
customer service representatives!
Real People! Here to Help!
Page | - 19 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
brought to the attention of the CSR so that changes can be made. Additionally, ASIFlex’s management team
randomly reviews a certain percentage of all calls answered by the customer service center. These reviews
are used as training and in the annual review process.
Potential employees are screened for past experience in health claims processing, prior experience with
participation or administration of flexible spending accounts and customer service. A customer service
representative's attitude and ability to learn are more important that prior experience or formal education.
Therefore, ASIFlex hires "attitude" and teaches skills.
Each employee uses a procedure manual that is periodically updated with client specific matters as well as
regulatory changes. Information regarding new clients or client changes are presented and discussed at the
monthly update sessions.
Update and review sessions are held monthly. These review sessions include existing claims and customer
service policies as well as new policies that are not time sensitive. Special sessions are conducted whenever
a time sensitive issue is discovered or when a change in regulation takes place. These sessions are generally
held early in the morning and are repeated later in the day for additional staff. Additional review sessions are
held prior to the open enrollment periods in order to ensure that all ASIFlex CSRs are well versed on the open
enrollment procedures in place for all of ASIFlex’s clients.
ASIFlex’s customer service center will be available to City of Fort Collins employees during the open
enrollment period to answer questions regarding the mechanics of an FSA program, eligible expenses and
other questions, as they arise.
Website
ASIFlex’s website is designed to be a valuable resource for its participants. The site is not designed to sell
ASIFlex’s administrative services to potential clients, but it is intended to foster understanding in complex tax-
favored benefit programs for benefit-eligible employees nationwide. ASIFlex provides its participants with a
tax-savings calculator, a detailed list of eligible expenses, links to pertinent IRS sites, a detailed FAQ section
and an online Account Detail function that allows a participant to see his or her account information. ASIFlex
also uses its website to provide information to participants regarding regulatory updates.
ASIFlex’s Account Detail function contains detailed transactions and current balances as of the previous
business day. As soon as a participant is enrolled in ASIFlex’s system, the participant is assigned an ASIFlex
personal identification number (PIN). The PIN is provided to the participant via the welcome packet or can
also be obtained by calling ASIFlex customer service. Using this PIN, the participant can then register to view
details of his/her account. The registration process is simple and provides a secure method of accessing the
account information. The member will establish specific security questions, select a security image (picture),
and create a user name and password. Other than the details of the participant's plan, there is no other
identifying information on the site (such as name or Social Security Number). Previous plan year information
is available for viewing for an additional thirty days after the claims run-out period has passed. Information on
this site is updated early every morning. Additionally, ASIFlex makes a notation on each participant’s online
account if a fax has been received and is in queue to be processed for that participant. This online
confirmation of receipt of a fax allows the participant to rest assured that his or her claim is received and will
be processed in short order.
Page | - 20 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Page | - 21 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Page | - 22 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
In addition, the employer is set up with its own ASIFlex Employer Portal. The City determines the staff
members who have access to the Employer Portal. Each staff member is provided with a user name and
password. Once the staff member signs in to the Employer Portal, he or she has a number of options,
including:
access to secure email with ASIFlex
the ability to run reports at the employer’s convenience
access to regularly scheduled management reports at the frequency determined by the employer
easy access to view specific member account information, including:
payroll contribution dates
payroll contribution amounts
claim payments
plan year election amounts
current balance
the ability to upload files to ASIFlex
the ability to download files from ASIFlex
Included below are screen shots from the Employer Portal showing screens that an Employer would use to run
a Year to Date Status report, and a screen shot from the Employer Portal showing a number of reports and
files that are available to be downloaded by the Employer:
Page | - 23 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Page | - 24 -
Your choice for FSA, HRA, Commuter Benefit, HSA and COBRA administrative services!
ASIFlex Company
Regular Management Reports
ASIFlex has included descriptions of its most commonly requested reports below. The reports can be
provided in any frequency requested by the City, and different reports can be provided to different
departments on a regular basis. These reports can be tailored to meet the needs of the City and ad hoc
reports are available at any time, for no additional fee.
Year-to-Date Status Report
This monthly and annual report summarizes (by person) all year-to-date participant activity. It includes each
participant's name, Social Security Number (or alternate unique identifier), annual election amount, amount
contributed year-to-date, amount requested year-to-date, amount reimbursed year-to-date, fund balances,
and available funds for both health care and dependent care.
Discrepancy Reports
ASIFlex will receive employee contribution data for each spending account from each payroll center within
the City. ASIFlex will verify that this actual payroll information matches the expected deductions based on
the original enrollment data and updates due to changes in status. ASIFlex will send a discrepancy report
to the appropriate payroll/personnel center each payroll cycle that will cite any and all salary reductions that
do not match the expected amounts.
The report lists each employee whose payroll contribution does not match the amount expected by ASIFlex.
The payroll issue date is listed in the top right hand corner of the page. Each employee's name, Social
Security Number and/or Employee Identification Number, pay cycle and payroll ID are listed for each
employee with a discrepancy. This report is designed to be a communication tool to identify coverage
changes and terminations to ASIFlex.
Reimbursement Listing
The reimbursement listing summarizes claims payment activity during the specified period within the
selected plan year. The total claims payments for health care and the total claims payments for dependent
care are listed for each day of the reporting period. The number of reimbursements issued by check and
the number of reimbursements issued by direct deposit (ACH) are also listed. The reimbursement listing
can also include detailed payment information for each participant.
Payment/Contribution Report
The payment/contribution report summarizes each participant's claims reimbursements and payroll
contributions during the specified reporting period and plan year-to-date through the end of the reporting
period. The participant's Social Security Number and/or Employee Identification Number and name can
also be included.
Email daily activity notice
This notice will notify the City of the amounts issued that day for each flexible spending account. The notice
is sent one day in advance of the effective date of the debits from City of Fort Collins’s account and can be
sent to any individual (or individuals) designated by the City.
ASIFlex Proposal for FSA Administrative Services
Page 1 of 7
Standard FSA Reports
ASIFlex
ASIFlex Proposal for FSA Administrative Services
Page 2 of 7
Year-to-Date Status Report:
This monthly and annual report summarizes all year-to-date participant activity. It includes each participant's name, social
security number (or alternate unique identifier), annual election amount, amount contributed year-to-date, amount requested year-
to-date, amount reimbursed year-to-date, fund balances, and available funds for both health care and dependent care.
04/15/20xx
Soc Sec Nmbr Name
Annual
Medical
FMB
Available
Contrbd
Medical
Paid
Medical
FMB
Balance
Dep
Care
Annual
Dep
Care
Contrib
uted
Dep
Care
Paid
Dep
Care
Balance
Dep.
Care
Pending
Claims
####### Adams, 2,500 1000 625 1,500 0
####### Allen, 3,200 1500 800 1,700 0
####### Avaro, 2,700 2000 675 700 0 5000 1250 0 1250
####### Barka, 2,000 1000 500 1,000 0
####### Bellesd 1,500 1200 375 300 75
####### Billet, 3,000 1800 750 1,200 0
####### Calli, 3,000 1754 750 1,246 0 3550 887.5 888 0
####### Cook, 3,500 2544 875 956 0
####### Counten 2,200 1874 550 326 224
####### Dubbya, 2,020 1125 505 895 0 4500 1125 371 753.75
####### Eleste, 1,987 1001 496.75 986 0
####### Houser, 4,000 2205 1000 1,795 0
####### Hulk, 3,800 1055 950 2,745 0
####### Ingrid, 3,600 2222 900 1,378 0
####### Kidd, 2,200 2000 550 200 350
####### Light, 2,800 1500 700 1,300 0
####### Norman, 2,500 1500 625 1,000 0
####### Siebs 2,000 1841 500 159 341
####### Smith 4,000 2201 1000 1,799 0
####### Wan 3,750 3601 937.5 149 788.5
####### William 3,320 2200 830 1,120 0
21 Total
Participants 21 Medical Participants 3 Dependent Care Participants
ASIFlex Proposal for FSA Administrative Services
Page 3 of 7
Discrepancy Reports:
ASIFlex will send a discrepancy report to the appropriate payroll/personnel center each payroll cycle that will cite any and all
salary reductions that do not match the expected amounts. The report lists each employee whose payroll contribution does not
match the amount expected by ASIFlex. The payroll issue date is listed in the top right hand corner of the page. Each
employee's name, social security number and/or employee identification number, pay cycle and payroll ID are listed for each
employee with a discrepancy. This report is designed to be a communication tool to identify coverage changes and terminations
to ASIFlex.
ASIFlex Proposal for FSA Administrative Services
Page 4 of 7
8/31/xxxx Discrepancy Report Issue Date 8/31
Rachel
Human Resources
P O Box ####
Soc-Sec-Num
Employee
Name Pay Cyc :Employee ID:
456-52-**** MARJORIE,S 18
HAS THERE BEEN A CHANGE OF ELECTION TO DEPENDENT CARE?
HAVE NO FORM INDICATING ANY CHANGES.
Amount you sent not as expected DepC FSA 93.83 Sent 106.56 Expected
125-56-**** SMITH,J 18
18 PP EMPLOYEE EXPECTED BACK THIS TIME BUT WAS MISSING--I
WILL EXPECT TO SEE DOUBLE ON 9/15/08 UNLESS I HEAR OTHERWISE
No data sent for this employee Hlth FSA 22.23 Expected
DepC FSA 191.67 Expected
102-54-**** MICHAEL,J 18
I HAD INFORMATION THAT DEP CARE WAS STOPPED--WHY DID WE
RECEIVE CONTRIB. THIS TIME?
Amount you sent not as expected DepC FSA 111.12 Sent 0.00 Expected
002-51-**** MOORE,A 24
MISSED 8/15 AND 8/31 SO I AM TERMING AS OF 7/31/08
No data sent for this employee Hlth FSA 53.57 Expected
ASIFlex Proposal for FSA Administrative Services
Page 5 of 7
Reimbursement Listing:
The reimbursement listing summarizes claims payment activity during the specified period within the selected plan year. The total
claims payments for health care and the total claims payments for dependent care are listed for each day of the reporting period.
The number of reimbursements issued by check and the number of reimbursements issued by direct deposit (ACH) are also
listed. The reimbursement listing can also include detail payment information for each participant.
5/5/20xx Reimbursement Listing for the period 4/29/20xx - 4/29/20xx Page 1
Plan year 20xx
Soc-Sec-Num Employee Name Check # Medical Dep. Care Total Date Checks ACH
125-36-***** JONES,J ACH 338.38 338.38 04/29/08
456-78-***** THOMAS,P ACH 1,254.58 1,254.58
344-56-***** ADMAN,T ACH 15.32 15.32
789-09-***** OSCAR,C 178688 176.89 176.89
123-45-***** DILLON,B ACH 142.59 142.59
678-90-***** JONES,P 178689 1.07 1.07
567-89-***** STEVENS,L ACH 304.35 304.35
891-23-***** ALFRED,L ACH 416.66 416.66
345-67-***** PAUL,T ACH 891.88 225.00 1,116.88
891-23-***** STEWS,A ACH 78.69 78.69
578-90-***** OBER,U ACH 25.45 25.45
345-78-***** LONS,P ACH 69.78 69.78
000-12-***** RAUL,F ACH 89.12 89.12
321-01-***** ACKERMAN,T ACH 12.75 12.75
457-89-***** MOORE,A 178691 727.67 727.67
784-56-***** QUINN,W ACH 52.35 52.35
Total this day 4,597.53 225.00 4,822.53 4/29/08 3 13
Total this report 4,597.53 225.00 4,822.53 3 13
ASIFlex Proposal for FSA Administrative Services
Page 6 of 7
Payment/Contribution Report:
The payment/contribution report summarizes each participant's claims reimbursements and payroll contributions during the
specified reporting period and plan year-to-date through the end of the reporting period. The participant's social security number
and/or employee identification number and name can also be included.
Payment/Contribution Report -- Flex Accounts Only -- 2011
<---- 01/01/11 - 07/31/2011 ----> <-------2011 Y-T-D through 7/31/2011-------->
Med Contrbtd Med Paid DC Cntrbtd DC Paid Med Contrbtd Med Paid DC Contrbtd DC
Paid SSN Name
125-36-***** JONES,J 650 277.77 650 277.77
456-78-***** THOMAS,P 556.7 235 556.7 235
344-56-***** ADMAN,T 650 40 650 40
789-09-***** OSCAR,C 2200 699 2200 699
123-45-***** DILLON,B 315 100 315 100
457-89-***** MOORE,A 2316 1502 452 452 2316 1502 452 452
000-12-***** RAUL,F 900 255 900 255
578-90-***** OBER,U 540 300 540 300
345-67-***** PAUL,T 1780 1485 1780 1485
891-23-***** ALFRED,L 340 0 345 200 340 0 345 200
10247.7 4893.77 797 652 10247.7 4893.77 797 652
ASIFlex Proposal for FSA Administrative Services
Page 7 of 7
Email Daily Activity Notice:
This notice will notify the employer of the amounts issued that day for each flexible spending account. The notice is sent one day in
advance of the effective date of the debits from the employer’s account and can be sent to any individual (or individuals) designated
by the employer.
============================================================
Email address: greg********@**********.gov
RE: FSA Payments
To: Greg *******
FSA Payments for ************* Flexible Benefits Plan
Payments processed on 3/26/12 for plan year 2012
Category Amount
===================== ==========
Medical Reimbursement 14,794.92
Dependent Care 5,200.36
==========
Total 19,995.28
Category Check ACH
===================== ========== ==========
Medical Reimbursement 2,770.78 12,024.14
Dependent Care 5,200.36
========== ==========
Total 2,770.78 17,224.50
Description
Maximum
length Data Type Decimals Justification Comments
Employee ID 15 AN Left SSN or EID
Employee name 30 AN Left Last name, First name
Street 30 AN Left 1st line of employee's address
Street 30 AN Left 2nd line of employee's address
City 20 AN Left Employee's city
State 2 AN Employee's state
Zip 10 AN Left Zip code in either 5‐4 format or 54 (without hyphen)
Per pay period H.C. F.S.A.
deduction 7 N 2 Right Decimal may be implied or explicit
Per pay period D.C.F.S.A.
deduction 7 N 2 Right Decimal may be implied or explicit
Annual H.C. F.S.A. election 7 N 2 Right Decimal may be implied or explicit
Annual D.C.F.S.A. election 7 N 2 Right Decimal may be implied or explicit
Pay cycle 2 N 0 Right Employee's pay cycle ‐ e.g. 12, 24, 52
Debit Card Flag 1 Debit card flag = y or n
Insurance plan name 5 AN Requires discussion before inclusion‐‐if applicable
Date of Birth 8 N Participant date of birth
Direct Deposit Routing No. participant bank routing number‐if applicable
Direct Deposit Acct. No. participant bank account number‐‐if applicable
Email address participant email address‐‐if applicable
Employee ID EE Name Address 2 Address 2 City State Zip PP HC PP DC PY HC PY DC y Cyit Cnce Plan DOB DD Routing DD Acct Email
1
____________________ Plan
(Cafeteria Plan)
for the Employees of
_________________________
Plan Document
Amended Effective ________________
Original Effective Date: ___________
2
_______________ Plan
(Cafeteria Plan)
for the Employees of
___________________________
Plan Document
Table of Contents
Section Title Page
Section 1 Introduction ........................................................................................................................ 3
Section 2 General Information ........................................................................................................... 5
Section 3 Benefit Options and Method of Funding ............................................................................ 7
Section 4 Eligibility and Participation ................................................................................................. 9
Section 5 Method of Timing and Elections ....................................................................................... 13
Section 6 Irrevocability of Elections and Exceptions ........................................................................ 14
Section 7 Claims and Appeals ........................................................................................................... 22
Section 8 Plan Administration .......................................................................................................... 26
Section 9 Amendment or Termination of the Plan........................................................................... 29
Section 10 General Provisions ............................................................................................................ 30
Section 11 HIPAA Privacy and Security ............................................................................................... 32
Glossary .......................................................................................................................................... 35
Appendix A Exclusions—Medical Expenses That Are Not Reimbursable From the
HCFSA ................................................................................................................................ 39
Appendix B Related Employers That Have Adopted This Plan ............................................................. 41
Schedule A Health Care Flexible Spending Account ............................................................................ 42
Schedule B Dependent Care Flexible Spending Account ..................................................................... 49
3
Section 1
Introduction
1.1 Establishment of the Plan
___________________ (the “Employer”) hereby amends the _________________________ Plan (the
“Plan”), a Cafeteria Plan, effective _________________. The original effective date of the Cafeteria Plan
is January 1, 2002 (the “Effective Date”).
1.2 Amendment Effective Dates
This amendment incorporates the changes made by the Patient Protection and Affordable Care Act,
Public Law No. 111-149 (“PPACA”) and the Health Care and Education Reconciliation Act of 2010, Public
Law No. 111-152 (“HCERA”).
PPACA and HCERA modified Code §105(b) to provide an exclusion from gross income for health
reimbursements under an employer-provided health plan to any employee’s child through the end of
the month the child attains age 26. This Plan amendment is intended to allow such dependents’ health
care expenses to be eligible for coverage under this Plan effective of the date of this amendment.
Section 9003 of PPACA added Code §106(f) which revised the definition of medical expenses as it relates
to over-the-counter drugs. Section 9003 is applicable after December 31, 2010. The portion of this
Amendment referencing Code §106(f) shall be effective retroactive to January 1, 2011 and January 16,
2011 for health FSA debit card purchases as allowed by IRS Notice 2010-59.
1.3 Purpose of the Plan
This Plan allows an Employee to participate in the following Benefit Options:
Health Care Flexible Spending Account (HCFSA) to make pre-tax Salary Reduction Contributions
to an account for reimbursement of certain Health Care Expenses.
Dependent Care Flexible Spending Account (DCFSA) to make pre-tax Salary Reduction
Contributions to an account for reimbursement of certain Dependent Care Expenses.
1.4 Legal Status
This Plan is intended to qualify as a “cafeteria plan” under the Code §125, and regulations issued
thereunder and shall be interpreted to accomplish that objective.
The DCFSA is intended to qualify as a Dependent Care Flexible Spending Account under Code §129, and
the Dependent Care Expenses reimbursed are intended to be eligible for exclusion from participating
Employees’ gross income under Code §129(a).
Although reprinted within this document, the HCFSA and the DCFSA are separate plans for purposes of
administration and all reporting and nondiscrimination requirements imposed by Code §§105 and 129.
The HCFSA is also a separate plan for purposes of applicable provisions of COBRA and HIPAA.
4
1.5 Capitalized Terms
Many of the terms used in this document begin with a capital letter. These terms have special meaning
under the Plan and are defined in the Glossary at the end of this document or in other relevant
Sections. When reading the provisions of the Plan, please refer to the Glossary at the end of this
document. Becoming familiar with the terms defined there will provide a better understanding of the
procedures and Benefits described.
5
Section 2
General Information
Name of the Cafeteria Plan ____________________________ Plan
Name of Employer ______________________
Address of Plan ___________________________________________________
Plan Administrator ____________
Plan Sponsor and its IRS
Employer Identification
Number
____________
____________
Named Fiduciary & Agent for
Service of Legal Process
______________
Type of Administration The Plan is administered by the Plan Administrator with Benefits
provided in accordance with the provisions of the
___________________ Plan. It is not financed by an insurance
company and Benefits are not guaranteed by a contract of insurance.
_________________ may hire a third party to perform some of its
administrative duties such as claim payments and enrollment.
Plan Number 501
Benefit Option Year The twelve-month period ending December 31.
Plan Effective Date _______________ Plan originally effective ______________; This
amendment effective __________.
Claims Administrator Application Software, Inc.
Plan Renewal Date January 1
Internal Revenue Code and
Other Federal Compliance
It is intended that this Plan meet all applicable requirements of the
Internal Revenue Code of 1986 (the “Code”) and other federal
regulations. In the event of any conflict between this Plan and the Code
or other federal regulations, the provisions of the Code and the federal
regulations shall be deemed controlling, and any conflicting part of this
Plan shall be deemed superseded to the extent of the conflict.
Discretionary Authority The Plan Administrator shall perform its duties as the Plan
Administrator and in its sole discretion, shall determine the appropriate
courses of action in light of the reason and purpose for which this Plan
is established and maintained.
6
In particular, the Plan Administrator shall have full and sole
discretionary authority to interpret all Plan documents, and make all
interpretive and factual determinations as to whether any individual is
entitled to receive any Benefit under the terms of this Plan. Any
construction of the terms of any Plan document and any determination
of fact adopted by the Plan Administrator shall be final and legally
binding on all parties. Any interpretation shall be subject to review only
if it is arbitrary, capricious, or otherwise an abuse of discretion.
Any review of a final decision or action of the Plan Administrator shall
be based only on such evidence presented to or considered by the Plan
Administrator at the time it made the decision that is the subject of
review. Accepting any Benefits or making any claim for Benefits under
this Plan constitutes agreement with and consent to any decisions that
the Plan Administrator makes in its sole discretion and further
constitutes agreement to the limited standard and scope of review
described by this Section.
7
Section 3
Benefit Options and Method of Funding
3.1 Benefits Offered
Each Employee may elect to participate in one or more of the following Benefits:
Health Care Flexible Spending Account (HCFSA) as described in Schedule A.
Dependent Care Flexible Spending Account (DCFSA) as described in Schedule B.
Benefits under the Plan shall not be provided in the form of deferred Compensation.
3.2 Employer and Participant Contributions
Employer Contributions. The Employer may, but is not required to, contribute to any of the
Benefit Options.
Participant Contributions. The Employer shall withhold from a Participant’s Compensation by
Salary Reduction on a pre-tax basis an amount equal to the Contributions required for the
Benefits elected by the Participant under the Salary Reduction Agreement. In some instances,
the participant may elect to make such Contributions with after-tax monies. The maximum
amount of Salary Reductions shall not exceed the aggregate cost of the Benefits elected.
3.3 Computing Salary Reduction Contributions
Salary Reductions per Pay Period. The Participant’s Salary Reduction is an amount equal to:
o The annual election for such Benefits payable on a per pay period basis in the Period of
Coverage;
o An amount otherwise agreed upon between the Employer and the Participant; or
o An amount deemed appropriate by the Plan Administrator. (Example: in the event of a
shortage of reducible Compensation, amounts withheld and the Benefits to which Salary
Reductions are applied may fluctuate.)
Salary Reductions Following a Change of Elections. If the Participant changes his or her election
under the HCFSA or DCFSA, as permitted under the Plan, the Salary Reductions will be, for the
Benefits affected, calculated as follows:
o An amount equal to:
The new annual amount elected pursuant to the Method of Timing and Elections section
below;
Less the aggregate Contributions, if any, for the period prior to such election change;
8
Payable over the remaining term of the Period of Coverage commencing with the
election change;
o An amount otherwise agreed upon between the Employer and the Participant; or
o An amount deemed appropriate by the Plan Administrator. (Example: in the event of a
shortage of reducible Compensation, amounts withheld and the Benefits to which Salary
Reductions are applied may fluctuate.)
Salary Reductions Considered Employer Contributions for Certain Purposes. Salary Reductions
to pay for the Participant’s share of the Contributions for Benefit Options elected for purposes
of this Plan and the Code are considered Employer Contributions.
Salary Reduction Balance Upon Termination of Coverage. If, as of the date that coverage under
this Plan terminates, a Participant’s year-to-date Salary Reductions exceed or are less than the
required Contributions necessary for Benefit Options elected up to the date of termination, the
Employer will either return the excess to the Participant as additional taxable wages or recoup
the amount due through Salary Reduction amounts from any remaining Compensation.
3.4 Funding This Plan
Benefits Paid from General Assets. All of the amounts payable under this Plan shall be paid
from the general assets of the Employer. Nothing herein will be construed to require the
Employer nor the Plan Administrator to maintain any fund or to segregate any amount for the
Participant’s benefit. Neither the Participant, nor any other person, shall have any claim against,
right to, or security or other interest in any fund, account or asset of the Employer from which
any payment under this Plan may be made. There is no trust or other fund from which Benefits
are paid. While the Employer has complete responsibility for the payment of Benefits out of its
general assets, it may hire a third party administrator to perform some of its administrative
duties such as claims payments and enrollment.
Participant Bookkeeping Account. While all Benefits are to be paid from the general assets of
the Employer, the Employer will keep a bookkeeping account in the name of each Participant.
The bookkeeping account is used to track allocation and payment of Plan Benefits. On behalf of
the Plan Administrator, the third party administrator will establish and maintain under each
Participant’s bookkeeping account a subaccount for each Benefit Option elected by each
Participant.
Maximum Contributions. The maximum Contributions that may be made under this Plan for the
Participant are the total of the maximums that may be elected for the HCFSA as described in Schedule A
and the DCFSA as described in Schedule B.
9
Section 4
Eligibility and Participation
4.1 Eligibility to Participate
An individual is eligible to participate in this Plan if such individual meets the definition of Employee as
set forth in the Glossary.
Eligibility requirements to participate in the individual Benefit Options may vary from the eligibility
requirements to participate in this Plan.
4.2 Required Salary Reduction Agreement
To participate, an Employee must complete, sign and return to the Plan Administrator a Salary
Reduction Agreement by the deadline designated by the Plan Administrator. If an Employee fails to
return a Salary Reduction Agreement, the Employee is deemed to have elected cash and will not be
allowed to change such election until the next Open Enrollment unless the Employee experiences an
event permitting an election change mid-year.
The Employee may begin participation on the 1st of the month coincident with or next following the
date on which the Employee has met the Plan’s eligibility requirements or in accordance with the
Enrollment requirements each year.
4.3 Termination of Participation
A Participant will terminate participation in this Plan upon the earlier of:
The expiration of the Period of Coverage for which the Employee has elected to participate
unless during the Open Enrollment Period for the next Plan Year the Employee elects to
continue participating;
The termination of this Plan; or
The date on which the Employee ceases to be an Employee because of retirement, termination
of employment, layoff, reduction in hours, or any other reason. Eligibility may continue beyond
such date for purposes of COBRA coverage, where applicable as set forth in the respective
Schedule attached hereto, as may be permitted by the Plan Administrator on a uniform and
consistent basis, but not beyond the end of the current Plan Year.
False or Fraudulent Claims. If ASIFlex believes that false or fraudulent claims have been submitted,
ASIFlex will investigate the submitted claims and forward, with all investigational findings, to the
__________________ for further investigation. In the interim, ASIFlex will deny your claim and notify
you that your account has been placed on hold until the situation has been resolved.
________________ will make a decision as to whether your participation will be terminated in FSA and
whether to recover any funds that may have been fraudulently obtained. ________________ has the
authority to deny claims found to be false or fraudulent and to terminate your participation in the FSA in
accordance with its discretionary duty as the Plan Administrator. ________________ may take legal or
disciplinary action against a member found to have committed fraud.
10
Termination of participation in this Plan will automatically revoke the Participant’s participation in the
elected Benefit Options, according to the terms thereof.
4.4 Rehired Employees
If a Participant terminates employment with the Employer for any reason, including, but not limited to,
disability, retirement, layoff, leave of absence without pay, or voluntary resignation, and then is rehired
within the same Plan Year and within 30 days or less of the date of termination of employment, the
Employee will be reinstated with the same elections that the Participant had prior to termination. If the
Employer rehires a former Participant within the same Plan Year but more than 30 days following
termination of employment and the Participant is otherwise eligible to participant in the Plan, then the
individual may make new elections as a new hire.
4.5 Eligibility Rules Regarding the HCFSA
An Employee enrolled in a Health Savings Account (HSA) is not eligible to enroll in the HCFSA.
4.6 FMLA Leaves Of Absence
Health Benefits. Notwithstanding any provision to the contrary in this Plan, if a Participant goes on a
qualifying leave under FMLA then to the extent required by FMLA, the Participant will be entitled to
continue the Benefits that provide health coverage on the same terms and conditions as if the
Participant were still an active Employee. In the event of unpaid FMLA leave, a Participant may elect to
continue such Benefits.
If the Participant elects to continue coverage while on FMLA leave, then the Participant’s coverage shall
continue during the approved FMLA leave of coverage. Upon return from the approved FMLA leave of
coverage, the per pay period contributions shall be recalculated to catch up the contributions that
would normally have been taken during the approved FMLA leave coverage.
A Participant whose coverage ceased due to failure to elect to continue coverage during the leave will
be entitled to elect whether to be reinstated in such plans: 1) at the same coverage level as in effect
before the FMLA leave with increased Contributions for the remaining Period of Coverage in order to
catch up to the initial annual election; or 2) by making a new election for the rest of the plan year.
Non-Health Benefits. If a Participant goes on a qualifying leave under the FMLA, then entitlement to
non-health benefits (such as DCFSA Benefits) is to be determined by the Employer’s policy for providing
such Benefits when the Participant is on leave not qualified as an FMLA leave of absence, as described
below.
4.7 Non-FMLA Leaves of Absence
If a Participant goes on an unpaid leave of absence that does not affect eligibility, then the Participant
will continue to participate and the Contributions due for the Participant will be paid by with catch-up
Contributions after the leave ends, as may be determined by the Plan Administrator.
If a Participant goes on an unpaid leave of absence that affects eligibility, the Participant should
complete the Unpaid Leave of Absence Election Form and choose whether to revoke his or her coverage
11
during the unpaid leave of absence or to catch up the contributions upon his or her return from the
unpaid leave of absence. If such form is not completed and submitted, then the Participant shall be
deemed to have elected to have the contributions revoked during the unpaid leave resulting in the
period of coverage ending on the first day of the unpaid leave. Any claims incurred after such date will
not be eligible for reimbursement.
To the extent COBRA applies, the Participant may continue coverage under COBRA.
4.8 Death
A Participant’s beneficiaries or representative of the Participant’s estate, may submit claims for
expenses that the Participant incurred through the end of the month in which the Participant ceases to
be eligible for the Plan due to death. A Participant may designate a specific beneficiary for this purpose.
If no beneficiary is specified, the Plan Administrator or its designee may designate the Participant’s
Spouse, another Dependent, or representative of the estate. Claims incurred by the Participant’s
covered Spouse or any other of the Participant’s covered Dependents prior to the end of the month in
which the Participant dies may also be submitted for reimbursement. While any claims must have been
incurred prior to the end of the month in which the Participant dies, the claims may be submitted until
the last day of the normal claims runoff period.
4.9 COBRA
Under the COBRA rules, as discussed in the attached Schedules B and C, where applicable, the
Participant’s Spouse and Dependents may be able to continue to participate under the HCFSA through
the end of the Period of Coverage in which the Participant dies. The Participant’s Spouse and
Dependents may be required to continue making Contributions to continue their participation.
4.10 USERRA
Notwithstanding any provision to the contrary in this Plan, if a Participant goes on a qualifying leave
under USERRA, then to the extent required by USERRA, the Employer will continue the Benefits that
provide health coverage on the same terms and conditions as if the Participant were still an active
Employee. In the event of unpaid USERRA leave, a Participant may elect to continue such Benefits
during the leave.
If the Participant elects to continue coverage while on USERRA leave, then the Participant may pay his or
her share of the Contribution with:
After-tax dollars, by sending monthly payments to the Employer by the due date established by
the Employer; or
Pre-tax dollars, by having such amounts withheld from the Participant’s ongoing Compensation,
if any, including any applicable unused sick days and vacation days.
Coverage will terminate if Contributions are not received by the due date established by the Employer.
If a Participant’s coverage ceases while on USERRA leave for any reason, including for non-payment of
Contributions, the Participant will be entitled to re-enter such Benefit upon return from such leave on
the date of such resumption of employment and will have the same opportunities to make elections
under this Plan as persons returning from non-USERRA leaves. Regardless of anything to the contrary in
12
this Plan, an Employee returning from USERRA leave has no greater right to Benefits for the remainder
of the Plan Year than an Employee who has been continuously working during the Plan Year.
If the Participant elects to continue coverage while on USERRA leave, then the Participant’s coverage
shall continue during the USERRA leave of coverage. Upon return from the USERRA leave of coverage,
the per pay period contributions shall be recalculated to catch up the contributions that would normally
have been taken during the USERRA leave coverage.
A Participant whose coverage ceased due to failure to elect to continue coverage during the leave will
be entitled to elect whether to be reinstated in such plans: 1) at the same coverage level as in effect
before the USERRA leave with increased Contributions for the remaining Period of Coverage in order to
catch up to the initial annual election; or 2) by making a new election for the rest of the plan year.
13
Section 5
Method of Timing and Elections
5.1 Initial Election
An Employee must complete, sign and return a Salary Reduction Agreement within the election-period
set forth therein to enroll in the Benefit Options.
Unless otherwise specified by the Employer, an Employee who first becomes eligible to participate in
the Plan mid-year will commence participation on the 1st day of the month coinciding with or after the
date the Employee completes, signs and returns a Salary Reduction Agreement or completes a Salary
Reduction Agreement using the electronic system produced by the Employer (if any), within the election
period set forth therein.
Eligibility for Benefits shall be subject to the additional requirements, if any, specified in the applicable
Benefit Option. The provisions of this Plan are not intended to override any exclusions, eligibility
requirements or waiting periods specified in the applicable Benefit Options.
5.2 Open Enrollment
During each Open Enrollment Period, the Plan Administrator shall provide a Salary Reduction Agreement
to each Employee who is eligible to participate in the Plan. The Salary Reduction shall enable the
Employee to elect to participate in the Benefit Options for the next Plan Year, and to authorize the
necessary Salary Reductions to pay for the Benefits elected. The Employee must complete sign and
return the Salary Reduction Agreement or complete an election using the electronic system provided by
the Employer, if any, to the Plan Administrator on or before the last day of the Open Enrollment Period.
If an Employee makes an election to participate during an Open Enrollment Period, then the Employee
will become a Participant on the first day of the next Plan Year.
The Employer may, in lieu of a Salary Reduction Agreement, provide an electronic method for
Employees to use to make elections. The Employer may require Employees to use the electronic system
to make elections. Use of an electronic system will have the same effect as a signed Salary Reduction
Agreement.
5.3 Failure To Elect
If an Employee fails to complete, sign and return a Salary Reduction Agreement or fails to complete an
election using the electronic system (if any) provided by the Employer within the time described in the
Elections paragraphs as discussed immediately above, then the Employee will be deemed to have
elected to receive his or her entire Compensation in cash.
Such Employee may not enroll in the Plan:
Until the next Open Enrollment Period; or
Until an event occurs that would justify a mid-year election change as described in the
Irrevocability of Election and Exceptions section below.
14
Section 6
Irrevocability of Elections and Exceptions
6.1 Irrevocability of Elections
A Participant’s election under the Plan is irrevocable for the duration of the Period of Coverage to which
it relates, except as described in this Section.
The rules regarding irrevocability of elections and exceptions are quite complex. The Plan Administrator
will interpret these rules in accordance with prevailing IRS guidance.
6.2 Procedure for Making New Election If Exception to Irrevocability Applies
Timing for Making New Election if Exception to Irrevocability Applies. A Participant may make
a new election within 31 days of the occurrence of an event described in section 6.4 below, if
the election under the new Salary Reduction Agreement is made on account of and corresponds
to the event.
Effective Date of New Election. Elections made pursuant to this Section shall be effective on
the 1st of the month following or coinciding with the Plan Administrator's receipt and approval
of the election request for the balance of the Period of Coverage following the change of
election unless a subsequent event allows for a further election change. Except as provided in
“Certain Judgments, Decrees and Orders” or for HIPAA special enrollment rights in the event of
birth, adoption, or placement for adoption, all election changes shall be effective on a
prospective basis only.
Changes. For subsequent Plan Years, the maximum and minimum dollar limit may be changed
by the Plan Administrator and shall be communicated to Employees through the Salary
Reduction Agreement or other document.
Effect on Maximum Benefits. Any change in an election affecting annual Contributions to the
HCFSA or DCFSA also will change the maximum reimbursement Benefits for the balance of the
Period of Coverage commencing with the election change. Such maximum reimbursement
Benefits for the balance of the Period of Coverage shall be calculated by adding:
o Any Contributions made by the Participant as of the end of the portion of the Period of
Coverage immediately preceding the change in election; to
o The total Contributions scheduled to be made by the Participant during the remainder of
such Period of Coverage to the Benefit Option; reduced by
o All reimbursements made during the entire Period of Coverage.
6.3 Change in Status Defined
A Participant may make a new election that corresponds to a gain or loss of eligibility and coverage
under this Plan or under any other plan maintained by the Employer or a plan of the Spouse’s or
Dependent’s employer that was caused by the occurrence of a Change in Status. A Change in Status is
15
any of the events described below, as well as any other events included under subsequent changes to
Code §125 or regulations issued thereunder, which the Plan Administrator, in its sole discretion and on a
uniform and consistent basis, determines are permitted under IRS regulations and under this Plan:
Legal Marital Status. A change in a Participant’s legal marital status including marriage, death
of a Spouse, divorce, legal separation or annulment;
Number of Dependents. Events that change a Participant’s number of Dependents, including
birth, death, adoption, and placement for adoption. In the case of the DCFSA, a change in the
number of Qualifying Individuals as defined in Code §21(b)(1);
Employment Status. Any of the following events that change the employment status of the
Participant, Spouse or Dependents:
o A termination or commencement of employment;
o A strike or lockout;
o A commencement of or return from an unpaid leave of absence;
o A change in worksite; or
o If the eligibility conditions of this Plan or another employee benefit plan of the Participant,
Spouse or Dependent depend on the employment status of that individual and there is a
change in that individual’s status with the consequence that the individual becomes, or
ceases to be, eligible under this Plan or another employee benefit plan;
Dependent Eligibility Requirements. An event that causes a Dependent to satisfy or cease to
satisfy the Dependent eligibility requirements for a particular Benefit; and
Change in Residence. A change in the place of residence of the Participant, Spouse or
Dependent(s).
6.4 Events Permitting Exception to Irrevocability Rule
A Participant may change an election as described below upon the occurrence of
____________________d events for the applicable Benefit Option.
The following rules shall apply to all Benefit Options except where expressly limited below.
Open Enrollment Period. A Participant may change an election during the Open Enrollment
Period.
Termination of Employment. A Participant’s election will terminate upon termination of
employment as described in the Eligibility and Participation section above.
16
Leave of Absence. A Participant may change an election upon a leave of absence as described in
the Eligibility and Participation section above.
Change in Status. (Applies to the HCFSA and DCFSA as limited below.) A Participant may change
the actual or deemed election under the Plan upon the occurrence of a Change in Status, but
only if such election change corresponds with a gain or loss of eligibility and coverage under a
plan of the Employer or a plan of the Spouse’s or Dependent’s employer, referred to as the
general consistency requirement.
A Change in Status that affects eligibility for coverage also includes a Change in Status that
results in an increase or decrease in the number of an Employee’s family members who may
benefit from the coverage.
The Plan Administrator, on a uniform and consistent basis, shall determine, based on prevailing
IRS guidance, whether a requested change satisfies the general consistency requirement.
Assuming that the general consistency requirement is satisfied, a requested election change
must also satisfy the following specific consistency requirements in order for a Participant to be
able to alter elections based on the specified Change in Status:
o Special Consistency Rule for DCFSA Benefits. With respect to the DCFSA, the Participant
may change or terminate the Participant’s election upon a Change in Status if:
Such change or termination is made on account of and corresponds with a Change in
Status that affects eligibility for coverage under an Employer’s plan; or
The election change is on account of and corresponds with a Change in Status that
affects eligibility of Dependent Care Expenses for the tax exclusion under Code §129.
Certain Judgments, Decrees and Orders. (Applies to the HCFSA but does not apply to the
DCFSA). If a judgment, decree, or order resulting from a divorce, legal separation, annulment or
change in legal custody, including a Qualified Medical Child Support Order (QMCSO) requires
accident or health coverage, including an election for HCFSA Benefits for a Participant’s
Dependent child, a Participant may:
o Change an election to provide coverage for the Dependent child provided that the order
requires the Participant to provide coverage; or
o Change an election to revoke coverage for the Dependent child if the order requires that
another individual provide coverage under that individual’s plan and such coverage is
actually provided.
Medicare and Medicaid. (Applies to the HCFSA, but does not apply to the DCFSA). If a
Participant, Spouse or Dependent is enrolled in a Benefit under this Plan and becomes entitled
to Medicare or Medicaid (other than coverage consisting solely of benefits under Section 1928
of the Social Security Act providing for pediatric vaccines), the Participant may prospectively
cancel, but not reduce, the HCFSA coverage. However, such cancellation will not be effective to
the extent that it would reduce future contributions to the HCFSA to a point where the total
contributions for the Plan Year are less that the amount already reimbursed for the Plan Year.
Further, if a Participant, Spouse, or Dependent who has been entitled to Medicare or Medicaid
17
loses eligibility for such coverage, the Participant may prospectively elect to commence or
increase the HCFSA coverage.
Change in Cost. (Applies to the DCFSA as limited below, but does not apply to the HCFSA). For
purposes of this Section, “similar coverage” means coverage for the same category of Benefits
for the same individuals.
o Insignificant Cost Changes. The Participant is required to increase his or her elective
Contributions to reflect insignificant increases in the required Contribution for the Benefit
Options, and to decrease the elective Contributions to reflect insignificant decreases in the
required Contribution. The Plan Administrator, in its sole discretion and on a uniform and
consistent basis, will determine whether an increase or decrease is insignificant based upon
all the surrounding facts and circumstances, including but not limited to the dollar amount
or percentage of the cost change. The Plan Administrator, on a reasonable and consistent
basis, will automatically make this increase or decrease in affected Participants’ elective
Contributions on a prospective basis.
o Significant Cost Increases. If the Plan Administrator determines that the cost charged to an
Employee for a Benefit significantly increases during a Period of Coverage, the Participant
may:
Make a corresponding prospective increase to elective Contributions by increasing
Salary Reductions;
Revoke the election for that coverage, and in lieu thereof, receive on a prospective basis
coverage under another Benefit Option that provides similar coverage; or
Terminate coverage going forward if there is no other Benefit Option available that
provides similar coverage.
The Plan Administrator, in its sole discretion and on a uniform and consistent basis, will
decide whether a cost increase is significant.
o Significant Cost Decreases. If the Plan Administrator determines that the cost of any
Benefit (such as the premium for the Health Plan) significantly decreases during a Period of
Coverage, then the Plan Administrator may permit the following election changes:
Participants enrolled in that Benefit Option may make a corresponding prospective
decrease in their elective contributions by decreasing Salary Reductions;
Participants who are enrolled in another benefit package option may change their
election on a prospective basis to elect the Benefit Option that has decreased in cost; or
Employees who are otherwise eligible may elect the Benefit Option that has decreased
in cost on a prospective basis, subject to the terms and limitations of the Benefit Option.
The Plan Administrator, in its sole discretion and on a uniform and consistent basis, will
decide whether a cost decrease is significant.
18
o Limitation on Change in Cost Provisions for DCFSA Benefits. The above “Change in Cost”
provisions apply to DCFSA Benefits only if the cost change is imposed by a dependent care
provider who is not a relative of the Employee.
Change in Coverage. (Applies to the DCFSA, but not to the HCFSA). The definition of “similar
coverage” applied in the Change of Cost provision above also applies here.
o Significant Curtailment. Coverage under a Plan is deemed to be “significantly curtailed”
only if there is an overall reduction in coverage provided under the Plan to constitute
reduced coverage generally. If coverage is “significantly curtailed,” Participants may elect
coverage under a Benefit Option that provides similar coverage. In addition, if the coverage
curtailment results in a “Loss of Coverage” as defined below, Participants may drop
coverage if no similar coverage is offered by the Employer. The Plan Administrator, in its
sole discretion and on a uniform and consistent basis, will decide whether a curtailment is
“significant,” and whether a Loss of Coverage has occurred in accordance with prevailing IRS
guidance.
Significant Curtailment Without Loss of Coverage. If the Plan Administrator determines
that a Participant’s coverage under a Benefit Option (or the Participant’s, Spouse’s or
Dependent’s coverage under the respective employer’s plan) is significantly curtailed
without a Loss of Coverage during a Period of Coverage, the Participant may revoke an
election for the affected coverage and prospectively elect coverage under another
Benefit Option if offered, that provides similar coverage.
Significant Curtailment With a Loss of Coverage. If the Plan Administrator determines
that a Participant’s coverage under this Plan (or the Participant’s, Spouse’s or
Dependent’s coverage under the respective employer’s plan) is significantly curtailed,
and such curtailment results in a Loss of Coverage during a Period of Coverage, the
Participant may revoke an election for the affected coverage, and may either
prospectively elect coverage under another Benefit Option that provides similar
coverage or drop coverage if no other Benefit Option providing similar coverage is
offered by the Employer.
Definition of Loss of Coverage. For purposes of this Section, a “Loss of Coverage”
means a complete loss of coverage. In addition, the Plan Administrator in its sole
discretion and on a uniform and consistent basis, may treat the following as a Loss of
Coverage:
A substantial decrease in the health care providers available under the Benefit
Package Plan;
A reduction in benefits for a specific type of medical condition or treatment with
respect to which the Participant or his or her Spouse or Dependent is currently in a
course of treatment; or
Any other similar fundamental loss of coverage.
19
o Addition or Significant Improvement of a Benefit Option. If during a Period of Coverage,
the Plan adds a new Benefit Option or significantly improves an existing Benefit Option, the
Plan Administrator may permit the following election changes:
Participants who are enrolled in a Benefit Option other than the newly-added or
significantly improved Benefit Option that provides similar coverage may change
their election on a prospective basis to cancel the current Benefit Option and
instead elect the newly added or significantly improved Benefit Option; and
Employees who are otherwise eligible may elect the newly added or significantly
improved Benefit Option on a prospective basis, subject to the terms and limitations
of the Benefit Option. The Plan Administrator, in its sole discretion and on a
uniform and consistent basis, will decide whether there has been an addition of, or
a significant improvement in, a Benefit Option.
o Change in Coverage Under Another Employer Plan. A Participant may make a prospective
election change that is on account of and corresponds with a change made under an
employer plan, including a plan of the Employer or a plan of the Spouse’s or Dependent’s
employer, so long as:
The other cafeteria plan or qualified benefits plan permits its participants to make an
election change that would be permitted under applicable IRS regulations; or
The Plan permits Participants to make an election for a Period of Coverage that is
different from the plan year under the other cafeteria plan or qualified benefits plan.
The Plan Administrator, on a uniform and consistent basis, will decide whether a requested
change is because of, and corresponds with, a change made under the other employer plan.
o Change in Dependent Care Service Provider. A Participant may make a prospective election
change that corresponds with a change in the dependent care service provider. For
example:
If the Participant terminates one dependent care service provider and hires a new
dependent care service provider, the Participant may change coverage to reflect the
cost of the new service provider; and
If the Participant terminates a dependent care service provider because a relative or
other person becomes available to take care of the child at no charge, the Participant
may cancel coverage.
A Participant entitled to change an election as described in this Section must do so in
accordance with the procedures described this Section.
6.5 Election Modifications Required by Plan Administrator
The Plan Administrator may require, at any time, any Participant or class of Participants to amend their
Salary Reductions for a Period of Coverage if the Plan Administrator determines that such action is
necessary or advisable in order to:
20
Satisfy any of the Code’s nondiscrimination requirements applicable to this Plan or another
cafeteria plan;
Prevent any Employee or class of Employees from having to recognize more income for federal
income tax purposes from the receipt of Benefits hereunder than would otherwise be
recognized;
Maintain the qualified status of Benefits received under this Plan; or
Satisfy any of the Code’s nondiscrimination requirements or other limitations applicable to the
Employer’s qualified Plans.
In the event that Contributions need to be reduced for a class of Participants, the Plan
Administrator will reduce the Salary Reduction amounts for each affected Participant, beginning
with the Participant in the class who had elected the highest Salary Reduction amount, and
continuing with the Participant in the class who had elected the next-highest Salary Reduction
amount, and so forth, until the defect is corrected.
21
Section 7
Claims and Appeals
7.1 Claims Under the Plan
If a claim for reimbursement under the HCFSA or DCFSA is wholly or partially denied, or if the Participant
is denied a Benefit under the Plan regarding the Participant’s coverage under the Plan, then the claims
procedure described below will apply.
7.2 Notice from ASI
If a claim is denied in whole or in part, (ASI) will notify the Participant in writing within 30 days of the
date that ASI received the claim. This time may be extended for an additional 15 days for matters
beyond the control of the ASI, including cases where a claim is incomplete. ASI will provide written
notice of any extension, including the reason(s) for the extension and the date a decision by ASI is
expected to be made. When a claim is incomplete, the extension notice will also specifically describe
the required information, and will allow the Participant at least 45 days from receipt of the notice to
provide the specified information, and will have the effect of suspending the time for a decision on the
claim until the specified information is provided. Notification of a denied claim will include:
The specific reasons for the denial;
The specific Plan provisions on which the denial is based;
A description of any additional material or information necessary to validate the claim and an
explanation of why such material or information is necessary; and
Appropriate information on the steps to take to appeal ASI’s adverse benefits determination,
including the right to submit written comments and have them considered, and the right to
review, upon request and at no charge, relevant documents and other information, and the
right to file suit, where applicable, with respect to any adverse benefits determination after the
final appeal of the claim.
7.3 First Level Appeal to ASI
If a claim is denied in whole or in part, the Participant, or the Participant’s authorized representative,
may request a review of the adverse benefits determination upon written application to ASI. The
Participant, or the Participant’s authorized representative, may request access to all relevant documents
in order to evaluate whether to request review of an adverse benefits determination and, if review is
requested, to prepare for such review.
An appeal of an adverse benefits determination must be made in writing within 30 days upon receipt of
the notice that the claim was denied. If an appeal is not made within the above referenced timeframe
all rights to appeal the adverse benefits determination and to file suit in court will be forfeited. A
written appeal should include: additional documents, written comments, and any other information in
support of the appeal. The review of the adverse benefits determination will take into account all new
information, whether or not presented or available at the initial determination. No deference will be
afforded to the initial determination.
22
7.4 ASI Action on Appeal
ASI, within a reasonable time, but no later than 60 days after receipt of the request for review, will
decide the appeal. ASI may, in its discretion, hold a hearing on the denied claim. Any medical expert
consulted in connection with the appeal will be different from and not subordinate to any expert
consulted in connection with the initial claim denial. The identity of any medical expert consulted in
connection with the appeal will be provided. If the decision on review affirms the initial denial of the
claim, a notice will be provided which sets forth:
The specific reasons for the decision on review;
The specific Plan provisions on which the decision is based;
A statement regarding the right to review, upon request and at no charge, relevant documents
and other information. If an “internal rule, guideline, protocol, or other similar criterion” is
relied on in making the decision on review, a description of the specific rule, guideline, protocol,
or other similar criterion or a statement that such a rule, guideline, protocol, or other similar
criterion was relied on and that a copy of such rule, guideline, protocol, or other criterion will be
provided free of charge upon request; and
Appropriate information on the steps to take to appeal ASI’s adverse benefits determination,
including the right to submit written comments and have them considered, and the right to
review, upon request and at no charge, relevant documents and other information, and the
right to file suit, where applicable, with respect to any adverse benefits determination after the
final appeal of the claim.
7.5 Second Level Appeal to ____________________
Participant may file an appeal of the denial in writing to ____________________ within 20 days of the
postmark date of the notice of denial of the first level appeal.
Appeal must contain how the employee may be contacted (mailing address, telephone number, etc.), a
written summary of events, applicable claims, and any additional documentation participant desires to
provide to support his/her position.
The Appeals Administrator from ____________________ (or his/her designee) will conduct an internal
review of the appeal and provide a written notice of the decision to the participant and the third party
administrator within 30 days of receiving the appeal.
7.6 Appeal Procedure for Eligibility or Salary Reduction Issues
If the Participant is denied a Benefit under the Plan due to questions regarding the Participant’s
eligibility or entitlement for coverage under the Plan or regarding the amount the Participant owes, the
Participant may request a review upon written application to ____________________.
The Participant, or the Participant’s authorized representative, may request access to all relevant
documents in order to evaluate whether to request review of an adverse benefits determination and if
review is requested, to prepare for such review.
23
An appeal of an adverse benefits determination must be made in writing within 20 days upon receipt of
the notice that the claim was denied. If an appeal is not made within the above referenced timeframe
all rights to appeal the adverse benefits determination and to file suit in court will be forfeited. A
written appeal should include: additional documents, written comments, and any other information in
support of the appeal. The review of the adverse benefits determination will take into account all new
information, whether or not presented or available at the initial determination. No deference will be
afforded to the initial determination.
If the decision on review affirms the Plan Administrator’s initial denial, the Participant may request a
review of the adverse appeal determination upon written application to ____________________.
24
Section 8
Plan Administration
8.1 Plan Administrator
The administration of this Plan shall be under the supervision of the Plan Administrator. It is the
principal duty of the Plan Administrator to see that this Plan is carried out in accordance with the terms
of the Plan document and for the exclusive benefit of persons entitled to participate in this Plan and
without discrimination among them.
8.2 Powers of the Plan Administrator
The Plan Administrator shall have such powers and duties as may be necessary or appropriate to
discharge its functions hereunder. The Plan Administrator shall have final discretionary authority to
make such decisions and all such determinations shall be final, conclusive and binding. The Plan
Administrator shall have the exclusive right to interpret the Plan and to decide all matters hereunder.
The Plan Administrator shall have the following discretionary authority:
To construe and interpret this Plan, including all possible ambiguities, inconsistencies and
omissions in the Plan and related documents, and to decide all questions of fact, questions
relating to eligibility and participation, and questions of Benefits under this Plan (provided that
the Committee shall exercise such exclusive power with respect to an appeal of a claim);
To prescribe procedures to be followed and the forms to be used by Employees and Participants
to make elections pursuant to this Plan;
To prepare and distribute information explaining this Plan and the Benefits under this Plan in
such manner as the Plan Administrator determines to be appropriate;
To request and receive from all Employees and Participants such information as the Plan
Administrator shall from time to time determine to be necessary for the proper administration
of this Plan;
To furnish each Employee and Participant with such reports in relation to the administration of
this Plan as the Plan Administrator determines to be reasonable and appropriate, including
appropriate statements setting forth the amounts by which a Participant’s Compensation has
been reduced in order to provide Benefits under this Plan;
To receive, review and keep on file such reports and information concerning the Benefits
covered by this Plan as the Plan Administrator determines from time to time to be necessary
and proper;
To appoint and employ such individuals or entities to assist in the administration of this Plan as
it determines to be necessary or advisable, including legal counsel and Benefit consultants;
To sign documents for the purposes of administering this Plan, or to designate an individual or
individuals to sign documents for the purposes of administering this Plan;
25
To secure independent medical or other advice and require such evidence as deemed necessary
to decide any claim or appeal; and
To maintain the books of accounts, records, and other data in the manner necessary for proper
administration of this Plan and to meet any applicable disclosure and reporting requirements.
8.3 Reliance on Participant, Tables, etc.
The Plan Administrator may rely upon the Participant’s direction, information or election as being
proper under the Plan and shall not be responsible for any act or failure to act because of a direction or
lack of direction by the Participant. The Plan Administrator will also be entitled, to the extent permitted
by law, to rely conclusively on all tables, valuations, certificates, opinions and reports that are furnished
by accountants, attorneys, or other experts employed or engaged by the Plan Administrator.
8.4 Outside Assistance
The Plan Administrator may employ such counsel, accountants, claims administrators, consultants,
actuaries and other person or persons as the Plan Administrator shall deem advisable. The Plan shall
pay the compensation of such counsel, accountants, and other person or persons and any other
reasonable expenses incurred by the Plan Administrator in the administration of the Plan. Unless
otherwise provided in the service agreement, obligations under this Plan shall remain the obligations of
the Employer and the Plan Administrator.
8.5 Fiduciary Liability
To the extent permitted by law, the Plan Administrator shall not incur any liability for any acts or for
failure to act except for its own gross negligence, misconduct or willful breach of this Plan.
8.6 Compensation of Plan Administrator
Unless otherwise determined by the Employer and permitted by law, any Plan Administrator that is also
an employee of the Employer shall serve without compensation for services rendered in such capacity,
but all reasonable expenses incurred in the performance of their duties shall be paid by the Employer.
8.7 Inability to Locate Payee
If the Plan Administrator is unable to make payment to the Participant or another person to whom a
payment is due under the Plan because it cannot ascertain the identity or whereabouts of the
Participant or such other person after reasonable efforts have been made to identify or locate such
person, then such payment and all subsequent payments otherwise due to the Participant or such other
person shall be forfeited one year after the date any such payment first became due.
8.8 Effect of Mistake
In the event of a mistake as to the eligibility or participation of an Employee, or the allocations made to
the Participant’s account, or the amount of Benefits paid or to be paid to the Participant or another
person, the Plan Administrator shall, to the extent administratively possible and otherwise permissible
under Code §125 or the regulations issued thereunder, correct by making the appropriate adjustments
26
of such amounts as necessary to credit the Participant’s account or such other person’s account or
withhold any amount due to the Plan or the Employer from Compensation paid by the Employer.
27
Section 9
Amendment or Termination of the Plan
9.1 Permanency
While the Employer fully expects that this Plan will continue indefinitely, due to unforeseen, future
business contingencies, permanency of the Plan will be subject to the Employer's right to amend or
terminate the Plan, as provided in the paragraphs below.
9.2 Right to Amend
The Employer reserves the right to merge or consolidate the Plan and to make any amendment or
restatement to the Plan from time-to-time, including those which are retroactive in effect. Such
amendments may be applicable to any Participant.
Any amendment or restatement shall be deemed to be duly executed by the Employer when signed by
the __________________________, and attested by its ____________.
9.3 Right to Terminate
The Employer reserves the right to discontinue or terminate the Plan in whole or in part at any time
without prejudice. This Plan may be terminated by the Employer. This Plan also shall terminate
automatically if the Employer is legally dissolved, makes a general assignment for the benefit of its
creditors, files for liquidation under the Bankruptcy Code, merges or consolidates with any other entity
and it is not the surviving entity, or if it sells or transfers substantially all of its assets, unless the
Employer's successor in interest agrees to assume the liabilities under this Plan as to the Participant and
Dependents.
28
Section 10
General Provisions
10.1 Expenses
All reasonable expenses incurred in administering the Plan are currently paid by forfeitures to the extent
provided in Schedules B, C, and E and then by the Employer.
10.2 No Contract of Employment
Nothing contained in the Plan shall be construed as a contract of employment with the Employer or as a
right of any Employee to be continued in the employment of the Employer, or as a limitation of the right
of the Employer to discharge any Employee, with or without cause.
10.3 Compliance with Federal Mandates
To the extent applicable for each Benefit Option, the Plan will provide Benefits in accordance with the
requirements of all federal mandates, including USERRA, COBRA, and HIPAA. This Plan shall be
construed, operated and administered accordingly, and in the event of any conflict between any part,
clause or provision of this Plan and the Code, the provisions of the Code shall be deemed controlling,
and any conflicting part, clause or provision of this Plan shall be deemed superseded to the extent of the
conflict.
10.4 Verification
The Plan Administrator shall be entitled to require reasonable information to verify any claim or the
status of any person as an Employee or Dependent. If the Participant does not supply the requested
information within the applicable time limits or provide a release for such information, the Participant
will not be entitled to Benefits under the Plan.
10.5 Limitation of Rights
Nothing appearing in or done pursuant to the Plan shall be held or construed:
To give any person any legal or equitable right against the Employer, any of its employees, or
persons connected therewith, except as provided by law; or
To give any person any legal or equitable right to any assets of the Plan or any related trust,
except as expressly provide herein or as provided by law.
10.6 Non-Assignability of Rights
The right of any Participant to receive any reimbursement under this Plan shall not be alienable by the
participant by assignment or any other method and shall not be subject to claims by the Participant’s
creditors by any process whatsoever. Any attempt to cause such right to be so subjected will not be
recognized, except to the extent required by law.
29
10.7 Governing Law
This Plan is intended to be construed, and all rights and duties hereunder are governed, in accordance
with the laws of ____________________, except to the extent such laws are preempted by any federal
law.
10.8 Severability
If any provision of the Plan is held invalid or unenforceable, its validity or unenforceability shall not
affect any other provision of the Plan, and the Plan shall be construed and enforced as if such provision
had not been included herein.
10.9 Captions
The captions contained herein are inserted only as a matter of convenience and for reference and in no
way define, limit, enlarge or describe the scope or intent of the Plan nor in any way shall affect the Plan
or the construction of any provision thereof.
10.10 Federal Tax Disclaimer
To ensure compliance with requirements imposed by the IRS to the extent this Plan Document or any
Schedule contains advice relating to a federal tax issue, it is not intended or written to be used, and it
may not be used, for the purpose of avoiding any penalties that may be imposed on the Participant or
any other person or entity under the Internal Revenue Code or promoting, marketing or recommending
to another party any transaction or matter addressed herein.
10.11 No Guarantee of Tax Consequences
Neither the Plan Administrator nor the Employer make any commitment or guarantee that any amounts
paid to the Participant or for the Participant’s benefit under this Plan will be excludable from the
Participant’s gross income for federal, state or local income tax purposes. It shall be the Participant’s
obligation to determine whether each payment under this Plan is excludable from the Participant’s gross
income for federal, state and local income tax purposes, and to notify the Plan Administrator if the
Participant has any reason to believe that such payment is not so excludable.
10.12 Indemnification of Employer
If the Participant receives one or more payments or reimbursements under this Plan on a pre-tax Salary
Reduction basis, and such payments do not qualify for such treatment under the Code, the Participant
shall indemnify and reimburse the Employer for any liability the Employer may incur for failure to
withhold federal income taxes, Social Security taxes, or other taxes from such payments or
reimbursements.
30
Section 11
HIPAA Privacy and Security
11.1 Provision of Protected Health Information to Employer
For purposes of this Section, Protected Health Information (PHI) shall have the meaning as defined in
HIPAA. PHI means information that is created or received by the Plan and relates to the past, present,
or future physical or mental health or condition of a Participant; the provision of health care to a
Participant; or the past, present, or future payment for the provision of health care to a Participant; and
that identifies the Participant or for which there is a reasonable basis to believe the information can be
used to identify the Participant. PHI includes information of persons living or deceased.
Members of the Employer’s workforce have access to the individually identifiable health information of
Plan Participants for administrative functions of the HCFSA plus any other Benefit Option which might
be subject to the privacy and security provisions of HIPAA (hereinafter referred to collectively as the
Plan). When this health information is provided to the Employer, it is PHI. HIPAA and its implementing
regulations restrict the Employer’s ability to use and disclose PHI. The Employer shall have access to
PHI from the Plan only as permitted under this Section or as otherwise required or permitted by HIPAA.
11.2 Permitted Disclosure of Enrollment/Disenrollment Information
The Plan may disclose to the Employer information on whether the individual is participating in the Plan.
11.3 Permitted Uses and Disclosure of Summary Health Information
The Plan may disclose Summary Health Information to the Employer, provided that the Employer
requests the Summary Health Information for the purpose of modifying, amending, or terminating the
Plan.
Summary Health Information means information:
That summarizes the claims history, claims expenses, or type of claims experienced by
individuals for whom a plan sponsor had provided health benefits under a health plan; and
From which the required information has been deleted, except that the geographic information
need only be aggregated to the level of a five-digit ZIP code.
11.4 Permitted and Required Uses and Disclosure of PHI for Plan Administration Purposes
Unless otherwise permitted by law, and subject to the conditions of disclosure and obtaining written
certification described below, the Plan may disclose PHI to the Employer, provided that the Employer
uses or discloses such PHI only for Plan Administration Purposes.
Plan Administration Purposes means administration functions performed by the Employer on behalf of
the Plan, such as quality assurance, claims processing, auditing, and monitoring. Plan Administration
functions do not include functions performed by the Employer in connection with any other benefit or
benefit plan of the Employer, and they do not include any employment-related functions.
Notwithstanding the provisions of this Plan to the contrary, in no event shall the Employer be permitted
31
to use or disclose PHI in a manner that is inconsistent with 45 CFR § 164.504(f).
11.5 Conditions of Disclosure for Plan Administration Purposes
Employer agrees that with respect to any PHI (other than enrollment/disenrollment information and
Summary Health Information, which are not subject to these restrictions) disclosed to it, the Employer
shall:
Not use or further disclose PHI other than as permitted or required by the Plan or as required by
law;
Ensure that any agent, including a subcontractor, to whom it provides PHI received from the
Plan agrees to the same restrictions and conditions that apply to the Employer with respect to
PHI;
Not use or disclose the PHI for employment-related actions and decisions or in connection with
any other for employee benefit plan of the Employer;
Report to the Plan any use or disclosure of the information that is inconsistent with the uses or
disclosures provided for of which it becomes aware;
Make available PHI to comply with HIPAA’s right to access in accordance with 45 CFR §164.524;
Make available PHI for amendment and incorporate any amendments to PHI in accordance with
45 CFR §164.526;
Make available the information required to provide an accounting of disclosures in accordance
with 45 CFR §164.528;
Make its internal practices, books, and records relating to the use and disclosure of PHI received
from the Plan available to the Secretary of Health and Human Services for purposes of
determining compliance with HIPAA’s privacy and security requirements;
If feasible, return or destroy all PHI received from the Plan that the Employer still maintains in
any form and retain no copies of such information when no longer needed for the purpose for
which disclosure was made, except that, if such return or destruction is not feasible, limit
further uses and disclosures to those purposes that make the return or destruction of the
information infeasible; and
Ensure that the adequate separation between the Plan and the Employer (i.e., the “firewall”),
required in 45 CFR §504(f)(2)(iii), is satisfied.
The Employer further agrees that if it creates, receives, maintains, or transmits any electronic PHI (other
than enrollment/disenrollment information and Summary Health Information, which are not subject to
these restrictions) on behalf of the Plan, it will implement administrative, physical, and technical
safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the
electronic PHI, and it will ensure that any agents, including subcontractors, to whom it provides such
electronic PHI agrees to implement reasonable and appropriate security measures to protect the
information. The Employer will report to the Plan any security incident of which it becomes aware.
32
11.6 Adequate Separation Between Plan and Employer
The Employer shall designate such employees of the Employer who need access to PHI in order to
perform Plan administration functions that the Employer performs for the Plan such as quality
assurance, claims processing, auditing, monitoring, payroll, and appeals. No other persons shall have
access to PHI. These specified employees, or classes of employees, shall only have access to and use of
PHI to the extent necessary to perform the plan administration functions that the Employer performs for
the Plan.
In the event that any of these designated employees do not comply with the provisions of this Section,
that employee shall be subject to disciplinary action by the Employer for non-compliance pursuant to
the Employer’s employee discipline and termination procedures.
The Employer will ensure that the provisions of this Section are supported by reasonable and
appropriate security measures to the extent that the designees have access to electronic PHI.
11.7 Certification of Plan Sponsor
The Plan shall disclose PHI to the Employer only upon the receipt of a certification by the Employer that
the Plan has been amended to incorporate the provisions of 45 CFR §164.504(f)(2)(ii), and that the
Employer agrees to the conditions of disclosure set forth in Section 10.5.
11.8 Organized Health Care Arrangement
The Plan Administrator intends the Plan to form part of an Organized Health Care Arrangement along
with any other Benefit Option under a covered health plan under 45 CFR §160.103 provided by
Employer.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument
comprising ____________________ Plan, ____________________ has caused this Plan to be executed
in its name and on its behalf, on this ____ day of _______, 20___.
____________________
By:
Its:
Attest:________________________________________
Title:_________________________________________
33
Glossary
Capitalized terms used in the Plan have the following meanings:
Benefit or Benefits means the Benefit Options offered under the Plan.
Benefit Option means a qualified benefit under Code §125(f) that is offered under this Cafeteria Plan, or
an option for coverage under an underlying accident or health plan.
Cafeteria Plan means ____________________ Plan as set forth herein and as amended from time to
time.
COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
Code means the Internal Revenue Code of 1986, as amended.
Compensation means the wages or salary paid to an Employee by the Employer, determined prior to:
any Salary Reduction election under this Plan; any Salary Reduction election under any other cafeteria
plan; any compensation reduction under any Code §132(f)(4) plan; and any salary deferral elections
under any Code §§401(k), 408(k) or 457(b) Plan or arrangement.
Contribution means the amount contributed to pay for the cost of Benefits as calculated under the
Benefit Options.
DCFSA means Dependent Care Flexible Spending Account.
Dental Plan means the dental benefit plan sponsored by the Employer.
Dependent means any individual who is a tax dependent of the Participant as defined in Code §§105(b)
and 152, with the following exceptions:
For purposes of accident or health coverage (for purposes of the HCFSA):
o A dependent is defined as in Code §§105(b) and 152, determined without regard to §152
subsections (b)(1), (b)(2), and (d)(1)(B) thereof; and
o Any child whom IRS Rev. Proc. 2008-48 applies (regarding certain children of divorced or
separated parents who receive more than half of their support for the calendar year from
one or both parents and are in the custody of one or both parents for more than half of the
calendar year) is treated as a dependent of both parents; and
For purposes of the DCFSA, a dependent means a Qualifying Individual.
The inclusion of Code Section 105(b) in the definition of “dependent” will allow for reimbursement of
expenses for adult children until the end of the month in which the child attains age 26.
Notwithstanding the foregoing, the HCFSA Component will provide Benefits in accordance with the
applicable requirements of any QMCSO, even if the child does not meet the definition of “Dependent.”
34
Dependent Care Flexible Spending Account means the Dependent Care Flexible Spending Account
component established by Employer under the Plan. It allows the Participant to use pre-tax dollars to
pay for the care of the Participant’s eligible Dependents while the Participant is at work.
Dependent Care Expenses has the meaning described in the DCFSA Schedule below.
Earned Income means all income derived from wages, salaries, tips, self-employment, and other
compensation (such as disability or wage continuation Benefits), but only if such amounts are includible
in gross income for the taxable year. Earned income does not include: any amounts received pursuant
to any DCFSA established under Code §129; or any other amounts excluded from earned income under
Code §32(c)(2), such as amounts received under a pension or annuity, or pursuant to workers’
compensation.
Effective Date of this Plan shall be May 31, 2011.
Employee means an individual who is benefit eligible; and has been employed by the Employer for 90 or
more days, counting the Participant’s employment commencement date as the first day.
The following classes of employees cannot participate in ____________________ Plan:
Leased employees (as defined by §414 (n) of the Code);
Contract workers and independent contractors;
Temporary employees, casual employees, and employees hired short-term to meet specific
needs of the Employer whether or not such persons are on the Employer’s W-2 payroll;
Individuals paid by a temporary or other employment or staffing agency;
Self-employed individuals; and
Any more than 2% shareholders of S corporations.
Employer means State of ____________________.
FMLA means the Family and Medical Leave Act of 1993, as amended.
Health Care Expenses has the meaning defined in the HCFSA Schedule below.
Health Care Flexible Spending Account means the Health Care Flexible Spending Account component
established by the Employer under the Plan. It allows a Participant to use pre-tax dollars to pay for most
health and dental expenses not reimbursed under other programs.
HCFSA means Health Care Flexible Spending Account.
Health Plan means the health benefit plan sponsored by the Employer.
HIPAA means the Health Insurance Portability and Accountability Act of 1996, as amended.
Life Insurance Plan means the life insurance benefit plan sponsored by the Employer.
35
Open Enrollment Period with respect to a Plan Year means a period as described by the Plan
Administrator preceding the Plan Year during which Participants may make Benefit elections for the Plan
Year.
Participant means a person who is an Employee and who is participating in this Plan in accordance with
the provisions of the Eligibility and Participation Section. Participants include: (a) those that elect to
receive Benefits under this Plan, and enroll for Salary Reductions to pay for such Benefits; and (b) those
that elect instead to receive their full salary in cash and have not elected the HCFSA or DCFSA.
Period of Coverage means the Plan Year, with the following exceptions: for Employees who first become
eligible to participate, it shall mean the portion of the Plan Year following the date participation
commences, as described in the Eligibility and Participation Section; and for Employees who terminate
participation, it shall mean the portion of the Plan Year prior to the date participation terminates, as
described in the Eligibility and Participation Section.
PHI means Protected Health Information.
Plan means ____________________ Plan, as set forth herein and as amended from time to time.
Plan Administrator means ____________________.
Plan Year means the twelve-month period ending December 31.
Protected Health Information (PHI) means information that is created or received by
____________________ Plan and relates to the past, present, or future physical, mental health or
condition of a Participant; the provision of health care to a participant; or the past, present, or future
payment for the provision of health care to a Participant; and that identifies the Participant or for which
there is a reasonable basis to believe the information can be used to identify the Participant. Protected
health information includes information of persons living or deceased.
QMCSO means a Qualified Medical Child Support Order.
Qualifying Dependent Care Services has the meaning described in the DCFSA Schedule below.
Qualifying Individual means:
A tax dependent of the Participant as defined in Code §152 who is under the age of 13 and who
is the Participant’s qualifying child as defined in Code § 152(a)(1);
A tax dependent of the Participant as defined in Code §152, but determined without regard to
subsections (b)(1), (b)(2), and (d)(1)(B) thereof, who is physically or mentally incapable of self-
care and who has the same principal place of abode as the Participant for more than half of the
year; or
A Participant’s Spouse who is physically or mentally incapable of self-care, and who has the
same principal place of abode as the Participant for more than half of the year.
Notwithstanding the foregoing, in the case of divorced or separated parents, a Qualifying Individual who
is a child shall, as provided in Code §21(e)(5), be treated as a Qualifying Individual of the custodial
36
parent (within the meaning of Code §152(e)) and shall not be treated as a Qualifying Individual with
respect to the non-custodial parent.
Related Employer means any employer affiliated with State of ____________________ that, under
Code §414(b), (c), or (m), is treated as a single employer with State of ____________________ for
purposes of Code §125(g)(4), and which is listed in Appendix B.
Salary Reduction means the amount by which the Participant’s Compensation is reduced and applied by
the Employer under this Plan to pay for one or more of the Benefit Options.
Salary Reduction Agreement means the agreement, form(s) or Internet web site, which Employees use
to elect one or more Benefit Options. The agreement and/or forms spell out the procedures used for
allowing an Employee to participate in this Plan and will allow the Employee to elect Salary Reductions
to pay for any Benefit Options offered under this Plan.
Spouse means an individual who is legally married to a Participant as determined under applicable state
law (and who is treated as a Spouse under the Code). Notwithstanding the above, for purposes of the
DCFSA, the term “Spouse” shall not include: an individual legally separated from the Participant under a
divorce or separate maintenance decree; or an individual who, although married to the Participant, files
a separate federal income tax return, maintains a principal residence separate from the Participant
during the last six months of the taxable year, and does not furnish more than half of the cost of
maintaining the principal place of abode of the Participant.
Student means an individual who, during five or more calendar months during the Plan Year, is a full-
time student at any educational organization that normally maintains a regular faculty and curriculum
and normally has an enrolled student body in attendance at the location where its educational activities
are regularly held.
USERRA means the Uniformed Services Employment and Reemployment Rights Act of 1994, as
amended.
37
Appendix A
Exclusions—Medical Expenses That Are Not Reimbursable From the HCFSA
The Plan Document contains the general rules governing what expenses are reimbursable under the
HCFSA. This Appendix A, as referenced in the Plan Document, specifies certain expenses that are
excluded under this Plan with respect to reimbursement from the HCFSA -- that is, expenses that are not
reimbursable, even if such expenses meet the definition of “medical care” under Code §§213(d) and
106(f) and may otherwise be reimbursable under the regulations governing health flexible spending
accounts:
Health insurance premiums for any other plan (including a plan sponsored by the Employer).
Long-term care services.
Cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to
ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal
injury resulting from an accident or trauma, or a disfiguring disease. “Cosmetic surgery” means
any procedure that is directed at improving the patient’s appearance and does not meaningfully
promote the proper function of the body or prevent or treat illness or disease.
The salary expense of a nurse to care for a healthy newborn at home.
Funeral and burial expenses.
Household and domestic help (even if recommended by a qualified physician due to an
Employee’s or Dependent’s inability to perform physical housework).
Custodial care.
Costs for sending a problem child to a special school for Benefits that the child may receive from
the course of study and disciplinary methods.
Social activities, such as dance lessons (even if recommended by a physician for general health
improvement).
Bottled water.
Cosmetics, toiletries, toothpaste, etc.
Uniforms or special clothing, such as maternity clothing.
Automobile insurance premiums.
Marijuana and other controlled substances that are in violation of federal laws, even if
prescribed by a physician.
Any item that does not constitute “medical care” as defined under Code §§213(d) and 106(f).
38
Any item that is not reimbursable under Code §§213(d) and 106(f) due to the rules in Prop.
Treas. Reg. §1.125-2, Q-7(b)(4) or other applicable regulations.
39
Appendix B
Related Employers That Have Adopted This Plan
With the Approval of State of ____________________.
No Related Employers have adopted this plan. State of ____________________ is the only employer
participating in this Plan.
40
Schedule A
Health Care Flexible Spending Account
Unless otherwise specified, terms capitalized in this Schedule A shall have the same meaning as the
defined terms in the Plan Document to which this Schedule is attached.
A.1 Benefits
An Employee not enrolled in an HSA can elect to participate in the HCFSA by electing to receive Benefits
in the form of reimbursements for Health Care Expenses. If elected, the Benefit Option will be funded
by Participant Contributions on a pre-tax Salary Reduction basis as provided in the Employer and
Participant Contributions section in the Plan Document.
Unless an exception applies as described in the Irrevocability of Elections and Exceptions section, such
election is irrevocable for the duration of the Period of Coverage to which it relates.
A.2 Benefit Contributions
The annual Contribution for a Participant’s HCFSA is equal to the annual Benefit amount elected by the
Participant.
A.3 Eligible Health Care Expenses
Under the HCFSA, a Participant may receive reimbursement for Health Care Expenses incurred during
the Period of Coverage for which an election is in force.
Incurred. A Health Care Expense is incurred at the time the medical care or service giving rise to
the expense is provided, and not when the Participant is formally billed for, is charged for, or
pays for the medical care.
Health Care Expenses. Health Care Expenses means expenses incurred by a Participant, or the
Participant’s Spouse or Dependent(s) covered under the HCFSA for medical care, as defined in
Code §§213(d) and 106(f), other than expenses that are excluded by this Plan, but only to the
extent that the Participant or other person incurring the expense is not reimbursed through any
other accident or health plan.
Expenses That Are Not Reimbursable. Insurance premiums are not reimbursable from the
HCFSA. Other expenses that are not reimbursable are listed in Appendix A to the Plan
Document.
A.4 Maximum and Minimum Benefits
Maximum Reimbursement Available; Uniform Coverage Rule. The maximum dollar amount
elected by the Participant for reimbursement of Health Care Expenses incurred during a Period
of Coverage, reduced by prior reimbursements during the Period of Coverage, shall be available
at all times during the Period of Coverage, regardless of the actual amounts credited to the
Participant’s HCFSA. Notwithstanding the foregoing, no reimbursements will be available for
Health Care Expenses incurred after coverage under this Plan has terminated, unless the
41
Participant has elected COBRA as provided below, or is entitled to submit expenses incurred
during a Grace Period as provided below.
Payment shall be made to the Participant in cash as reimbursement for Health Care Expenses
incurred during the Period of Coverage for which the Participant’s election is effective, or
during a Grace Period as provided below, provided that the other requirements of this Section
have been satisfied.
Maximum and Minimum Dollar Limits. The maximum annual benefit amount that a Participant
may elect to receive under this Plan in the form of reimbursements for Health Care Expenses
incurred in any subsequent Period of Coverage shall be $4,000. The minimum annual benefit
amount that a Participant may elect to receive under this Plan in the form of reimbursements
for Health Care Expenses incurred in any Period of Coverage shall be $50. Reimbursements due
for Health Care Expenses incurred by the Participant’s Spouse or Dependent(s) shall be charged
against the Participant’s HCFSA.
Changes. For subsequent Plan Years, the maximum and minimum dollar limit may be changed
by the Plan Administrator and shall be communicated to Employees through the Salary
Reduction Agreement or another document.
No Proration. If a Participant enters the Plan mid-year or wishes to increase his or her election
mid-year as permitted under this Plan, then the Participant may elect coverage or increase
coverage respectively, up to the maximum annual benefit amount stated above. The maximum
annual benefit amount will not be prorated.
Effect on Maximum Benefits If Election Change Permitted. Any change in an election affecting
annual Contributions to the HCFSA will also change the maximum reimbursement benefits for
the balance of the Period of Coverage commencing on the election change effective date. Such
maximum reimbursement benefits for the balance of the Period of Coverage shall be calculated
by adding:
o The aggregate Contribution for the period prior to such election change; to
o The total Contribution for the remainder of such Period of Coverage to the HCFSA; reduced
by
o All reimbursements made during the entire Period of Coverage.
FMLA Leave. Any change in an election for FMLA leave will change the maximum
reimbursement benefits in accordance with FMLA or the regulations governing cafeteria plans.
Monthly Limits on Reimbursing OTC Drugs. Only reasonable quantities of over-the-counter
(OTC) drugs or medicines of the same kind may be reimbursed from a Participant’s HCFSA in a
single calendar month, even assuming that the drug otherwise meets the requirements of this
Section, including that it is for medical care under Code §§213(d) and 106(f). Stockpiling is not
permitted.
42
A.5 Establishment of Account
The Plan Administrator will establish and maintain a HCFSA with respect to each Participant who has
elected to participate in the HCFSA, but will not create a separate fund or otherwise segregate assets for
this purpose. The account established hereto will merely be a record keeping account with the purpose
of keeping track of Contributions and determining forfeitures.
Crediting of Accounts. A Participant’s HCFSA will be credited following each Salary Reduction
actually made during each Period of Coverage with an amount equal to the Salary Reduction
actually made.
Debiting of Accounts. A Participant’s HCFSA will be debited during each Period of Coverage for
any reimbursement of Health Care Expenses incurred during the Period of Coverage, or during a
Grace Period described below.
Available Amount Not Based on Credited Amount. The amount available for reimbursement of
Health Care Expenses is the amount as calculated according to the “Maximum Reimbursement
Available” paragraph of this Section above. It is not based on the amount credited to the HCFSA
at a particular point in time.
A.6 Use It or Lose It Rule; Forfeiture Of Account Balance
Use It or Lose It Rule. Except for expenses incurred during an applicable Grace Period, if any
balance remains in the Participant’s HCFSA for a Period of Coverage after all reimbursements
have been made for the Period of Coverage, then such balance shall not be carried over to
reimburse the Participant for Health Care Expenses incurred during a subsequent Plan Year. The
Participant shall forfeit all rights with respect to such balance.
Use of Forfeitures. All forfeitures under this Plan shall be used as follows:
o First, to offset any losses experienced by Employer during the Plan Year as a result of making
reimbursements with respect to any Participant in excess of the Contributions paid by such
Participant through Salary Reductions;
o Second, to reduce the cost of administering the HCFSA during the Plan Year or the
subsequent Plan Year (all such administrative costs shall be documented by the Plan
Administrator); and
o To provide increased Benefits or compensation to all Participants in subsequent years in any
weighted or uniform fashion that the Plan Administrator deems appropriate, consistent with
applicable regulations.
Unclaimed Benefits. Benefit payments that remain unclaimed by the close of the Plan Year
following the Period of Coverage in which the Health Care Expense was incurred shall be
forfeited and applied as described above.
43
A.7 Grace Period
Special Rules for Claims Incurred During a Grace Period. The Employer has the discretion to
establish a grace period following the end of the Plan Year, as follows:
o An individual may be reimbursed for Health Care Expenses incurred during a Grace Period
from amounts remaining in his or her HCFSA Account at the end of the Plan Year to which
that Grace Period relates (“Prior Plan Year HCFSA Amounts”) if the individual is either:
A Participant with HCFSA coverage that is in effect on the last day of that Plan Year; or
A qualified beneficiary as defined under COBRA who has COBRA coverage under the
HCFSA Benefit Option on the last day of that Plan Year.
o Prior Plan Year HCFSA Amounts may not be cashed out or converted to any other taxable or
non-taxable Benefit Option. For example, Prior Plan Year HCFSA Amounts may not be used
to reimburse Dependent Care Expenses.
o Health Care Expenses incurred during a Grace Period and approved for reimbursement will
be reimbursed first from any available Prior Plan Year HCFSA Amounts and then from any
amounts that are available to reimburse expenses that are incurred during the current Plan
Year. If the HCFSA is accessible by an electronic payment card, Health Care Expenses
incurred during the Grace Period may need to be submitted manually in order to be
reimbursed from Prior Plan Year HCFSA Amounts if the card is unavailable for such
reimbursement. An individual’s Prior Plan Year HCFSA Amounts will be debited for any
reimbursement of Health Care Expenses incurred during the Grace Period that is made from
such Prior Plan Year HCFSA Amounts.
o Claims for reimbursement of Health Care Expenses incurred during a Grace Period must be
submitted no later than 4 months following the close of the Plan Year to which the Grace
Period relates in order to be reimbursed from Prior Plan Year HCFSA Amounts. Any Prior
Plan Year HCFSA Amounts that remain after all reimbursements have been made for the
Plan Year and its related Grace Period shall not be carried over to reimburse the Participant
for expenses incurred in any subsequent period. The Participant will forfeit all rights with
respect to these amounts, which will be subject to the Plan's provisions regarding
forfeitures.
A.8 Reimbursement Procedure
Timing. Within 30 days after receipt by the Plan Administrator of a reimbursement claim from a
Participant, the Employer will reimburse the Participant for the Participant’s Health Care
Expenses, or the Plan Administrator will notify the Participant that a claim has been denied. This
time period may be extended for an additional 15 days for matters beyond the control of the
Plan Administrator, including in cases where a reimbursement claim is incomplete. The Plan
Administrator will provide written notice of any extension, including the reasons for the
extension, and will allow the Participant 45 days from receipt of the written notice in which to
complete an incomplete reimbursement claim.
44
Claims Substantiation. A Participant who has elected to receive Health Care Reimbursement
Benefits for a Period of Coverage may apply for reimbursement by submitting an application to
the Plan Administrator by no later than the date set by the Plan Administrator each year, setting
forth:
o The person or persons on whose behalf Health Care Expenses have been incurred;
o The nature and date of the expenses incurred;
o The amount of the requested reimbursement;
o A statement that such expenses have not otherwise been reimbursed and the Participant
will not seek reimbursement through any other source; and
o Other such details about the expenses that may be requested by the Plan Administrator in
the reimbursement request form or otherwise.
The application shall be accompanied by bills, invoices, or other statements from an
independent third party showing that the Health Care Expenses have been incurred and the
amounts of such expenses, together with any additional documentation that the Plan
Administrator may request. If the HCFSA is accessible by an electronic payment card, the
Participant will be required to comply with substantiation procedures established by the Plan
Administrator in accordance with the most current IRS guidance.
Claims Denied. For appeal of claims that are denied, see the Appeals Procedure in the Plan
Document.
Claims Ordering; No Reprocessing. All claims for reimbursement will be paid in the order in
which they are approved. Once paid, a claim will not be reprocessed or otherwise
recharacterized solely for the purpose of paying it from amounts attributable to a different Plan
Year or Period of Coverage.
A.9 Reimbursements After Termination; Limited COBRA Continuation
The Participant will not be able to receive reimbursements for Health Care Expenses incurred after
participation terminates. However, except for expenses incurred during an appropriate Grace Period,
such Participant, or the Participant’s estate, may claim reimbursement for any Health Care Expenses
incurred during the Period of Coverage prior to termination, provided that the Participant, or the
Participant’s estate, files a claim by the date established in the Reimbursement Procedure paragraphs
above following the close of the Plan Year in which the Health Care Expense was incurred.
Notwithstanding any provision to the contrary in this Plan, to the extent required by COBRA, a
Participant and such Participant’s Spouse and Dependent(s), whose coverage terminates under the
HCFSA because of a COBRA qualifying event, shall be given the opportunity to continue the same
coverage that the Participant had under the HCFSA the day before the qualifying event, subject to all
conditions and limitations under COBRA. The Contributions for such continuation coverage will be equal
to the cost of providing the same coverage to an active employee taking into account all costs incurred
by the Employee and the Employer plus a 2% administration fee. Specifically, an individual will be
eligible for COBRA continuation coverage only if the Participant's remaining available amount is greater
45
than the Participant's remaining Contribution payments at the time of the qualifying event, taking into
account all claims submitted before the date of the qualifying event. Such individual will be notified if
the individual is eligible for COBRA continuation coverage.
If COBRA is elected, COBRA coverage will be subject to the most current COBRA rules. COBRA will be
available only for the remainder of the Plan Year in which the qualifying event occurs. Such COBRA
coverage for the HCFSA will cease at the end of the Plan Year, except for expenses incurred during an
appropriate Grace Period, and cannot be continued for the next Plan Year. Coverage may terminate
sooner if the Contributions for a Period of Coverage are not received by the due date established by the
Plan Administrator for that Period of Coverage. Continuation coverage is only granted after the Plan
Administrator has received the Contributions for that period of coverage.
Contributions for coverage for HCFSA Benefits may be paid on a pre-tax basis for current Employees
receiving taxable compensation, as may be permitted by the Plan Administrator on a uniform and
consistent basis, but may not be prepaid from Contributions in one Plan Year to provide coverage that
extends into a subsequent Plan Year, where COBRA coverage arises either:
Because the Employee ceases to be eligible because of a reduction of hours; or
Because the Employee’s Dependent ceases to satisfy the eligibility requirements for coverage.
For all other individuals (for example, Employees who cease to be eligible because of retirement,
termination of employment, or layoff), Contributions for COBRA coverage for HCFSA Benefits shall be
paid on an after-tax basis, unless permitted otherwise by the Plan Administrator, in its discretion and on
a uniform and consistent basis, but may not be prepaid from Contributions in one Plan Year to provide
coverage that extends into a subsequent Plan Year.
A.10 Qualifed Reservist Distribution
If a Participant meets all of the following conditions, the Participant may elect to receive a qualified
reservist distribution from the HCFSA:
The Participant’s Contributions to the HCFSA for the Plan Year as of the date the qualified
reservist distribution is requested exceeds the reimbursements the Participant has received
from the HCFSA for the Plan Year as of that date.
The Participant is ordered or called to active military duty for a period of at least 180 days or for
an indefinite period by reason of being a member of the Army National Guard of the United
States, the Army Reserve, the Navy Reserve, the Marine Corps Reserve, the Air National Guard
of the United States, the Air Force Reserve, the Coast Guard Reserve, or the Reserve Corps of
the Public Health Service.
The Participant has provided the Plan Administrator with a copy of the order or call to active
duty. An order or call to active duty of less than 180 days’ duration must be supplemented by
subsequent calls or orders to reach a total of 180 or more days.
The Participant is ordered or called to active military duty on or after April 1, 2009, or the
Participant’s period of active duty begins before April 1, 2009 and continues on or after the
date.
46
During the period beginning on the date of the Participant’s order or call to active duty and
ending on the last day of the Plan Year during which the order or call occurred, the Participant
submits a qualified reservist distribution election form to the Plan Administrator.
Amount of Qualified Reservist Distribution. If the above conditions are met, the Participant will receive
a distribution from the HCFSA equal to his or her Contributions to the HCFSA for the Plan Year as of the
date of the distribution request, minus any reimbursements received for the Plan Year as of that date.
No Reimbursement for Expenses Incurred After Distribution Request. Once a Participant requests a
qualified reservist distribution, the Participant forfeits the right to receive reimbursements for Health
Care Expenses incurred during the period that begins on the date of the distribution request and ends
on the last day of the Plan Year. The Participant may, however, continue to submit claims for Health
Care Expenses that were incurred before the date of the distribution request (even if the claims are
submitted after the date of the qualified reservist distribution), so long as the total dollar amount of the
claims does not exceed the amount of the HCFSA election for the Plan Year, minus the sum of the
qualified reservist distribution and the prior HCFSA reimbursements for the Plan Year.
Tax Treatment of a Qualified Reservist Distribution. If the Participant receives a qualified reservist
distribution, it will be included in his or her gross income and will be reported as wages on the
Participant’s Form W-2 for the year in which it is paid.
A.11 Named Fiduciary
The Plan Administrator is the Named Fiduciary for the HCFSA.
A.12 Coordination of Benefits
HCFSAs are intended to pay Benefits solely for Health Care Expenses not previously reimbursed or
reimbursable elsewhere. Accordingly, the HCFSA shall not be considered a group health plan for
coordination of benefits purposes, and the HCFSA shall not be taken into account when determining
benefits payable under any other plan.
47
Schedule B
Dependent Care Flexible Spending Account
Unless otherwise specified, terms capitalized in this Schedule B shall have the same meaning as the
defined terms in the Plan Document to which this Schedule is attached.
B.1 Benefits
An Employee can elect to participate in the DCFSA to receive Benefits in the form of reimbursements for
Dependent Care Expenses. If elected, the Benefit Option will be funded by the Participant on a pre-tax
Salary Reduction basis. Unless an exception applies, as described in the Irrevocability of Elections and
Exceptions section above, such election is irrevocable for the duration of the Period of Coverage to
which it relates.
B.2 Benefit Contributions
The annual Contribution for a Participant’s DCFSA Benefits is equal to the annual Benefit amount
elected by the Participant, subject to the Maximum Benefits paragraph below.
B.3 Eligible Dependent Care Expenses
Under the DCFSA, a Participant may receive reimbursement for Dependent Care Expenses incurred
during the Period of Coverage or Grace Period for which an election is in force.
Incurred. A Dependent Care Expense is “incurred” at the time the Qualifying Dependent Care
Service giving rise to the expense is provided, and not when the Participant is formally billed for,
is charged for, or pays for the Qualifying Dependent Care Services.
Dependent Care Expenses. Dependent Care Expenses means expenses that are considered to
be:
o Employment-related expenses under Code §21(b)(2) relating to expenses for the care of a
Qualifying Individual necessary for gainful employment of the Employee and Spouse; and
o Expenses for incidental household services, if incurred by the Employee to obtain Qualifying
Dependent Care Services, but only to the extent that the Participant or other person
incurring the expense is not reimbursed for the expense through any other Plan.
If only a portion of a Dependent Care Expense has been reimbursed elsewhere, the DCFSA can
reimburse the remaining portion of such Expense if it otherwise meets the requirements of this
Schedule.
Qualifying Individual. A Qualifying Individual is:
o A tax dependent of the Participant as defined in Code §152 who is under the age of 13 and
who is the Participant’s qualifying child as defined in Code §152(a)(1);
48
o A tax dependent of the Participant as defined in Code §152, who is physically or mentally
incapable of self-care and who has the same principal place of abode as the Participant for
more than half of the year; or
o A Participant’s Spouse, as defined in Code §152, who is physically or mentally incapable of
self-care, and who has the same principal place of abode as the Participant for more than
half of the year.
In the case of divorced or separated parents, a child shall be treated as a Qualifying Individual of
the custodial parent within the meaning of Code §152(e).
Qualifying Dependent Care Services. Qualifying Dependent Care Services means services that
both:
o Relate to the care of a Qualifying Individual that enable the Participant and Spouse to
remain gainfully employed after the date of participation in the DCFSA and during the
Period of Coverage; and
o Are performed:
In the Participant’s home; or
Outside the Participant’s home for:
The care of a Participant’s Dependent who is under age 13; or
The care of any other Qualifying Individual who regularly spends at least 8 hours per
day in the Participant’s household.
In addition, if the expenses are incurred for services provided by a facility that
provides care for more than six individuals not residing at the facility and that
receives a fee, payment or grant for such services, then the facility must comply
with all applicable state and local laws and regulations.
Exclusions. Dependent Care Expenses do not include amounts paid to or for:
o An individual with respect to whom a personal exemption is allowable under Code §151(c)
to a Participant or Participant’s Spouse;
o A Participant’s Spouse;
o A Participant’s child, as defined in Code §152(f)(I), who is under 19 years of age at the end of
the year in which the expenses were incurred; and
o A Participant's Spouse's child, as defined in Code §152 (a)(i), who is under 19 years of age at
the end of the year in which the expenses were incurred.
49
B.4 Maximum And Minimum Benefits
Maximum Reimbursement Available and Statutory Limits. The maximum dollar amount
elected by the Participant for reimbursement of Dependent Care Expenses incurred during a
Period of Coverage shall only be available during the Period of Coverage to the extent of the
actual amounts credited to the Participant’s DCFSA less amounts debited to the Participant's
DCFSA pursuant to the Maximum Contribution paragraph below.
Payment shall be made to the Participant as reimbursement for Dependent Care Expenses
incurred during the Period of Coverage for which the Participant’s election is effective, provided
that the other requirements of this Section have been satisfied.
No reimbursement otherwise due to a Participant hereunder shall be made to the extent that
such reimbursement, when combined with the total amount of reimbursements made to date
for the Plan Year, would exceed the year to date amount of Participant Contributions to the
DCFSA for the Period of Coverage or applicable statutory limit.
Maximum Dollar Limits. The maximum dollar limit for a Participant is the smallest of the
following amounts:
o The Participant’s Earned Income for the calendar year;
o The Earned Income for the calendar year of the Participant’s Spouse who:
Is not employed during a month in which the Participant incurs a Dependent Care
Expense; and
Is either physically or mentally incapable of self-care or a full-time Student shall be
deemed to have Earned Income in the amount of $250 per month per Qualifying
Individual for whom the Participant incurs Dependent Care Expenses, up to a maximum
amount of $500 per month); or
o $5,000 for the calendar year ($2,500 for the first short plan year), if:
The Participant is married and files a joint federal income tax return; or
The Participant is married, files a separate federal income tax return, and meets the
following conditions:
The Participant maintains as his or her home a household that constitutes, for more
than half of the taxable year, the principal abode of a Qualifying Individual;
The Participant furnishes over half of the cost of maintaining such household during
the taxable year; and
During the last six months of the taxable year, the Participant’s Spouse is not a
member of such household; or
The Participant is single or is the head of the household for federal income tax purposes.
50
o $2,500 for the calendar year if the Participant is married and resides with the Spouse, but
files a separate federal income tax return.
Minimum Dollar Limits. The minimum annual Benefit amount that a Participant may elect to
receive under this Plan in the form of reimbursements for Dependent Care Expenses incurred in
any Period of Coverage shall be $_________.
Changes. For subsequent Plan Years, the maximum and minimum dollar limit may be changed
by the Plan Administrator and shall be communicated to Employees through the Salary
Reduction Agreement or another document.
No Proration. If a Participant enters the Plan mid-year or wishes to increase his or her election
mid-year as permitted under this Plan, then the Participant may elect coverage or increase
coverage respectively, up to the maximum annual benefit amount stated above. The maximum
annual benefit amount will not be prorated.
Effect on Maximum Benefits If Election Change Permitted. Any change in an election affecting
annual Contributions to the DCFSA component will also change the maximum reimbursement
Benefits for the balance of the Period of Coverage commencing with the election change
effective date. Such maximum reimbursement Benefits for the balance of the Period of
Coverage shall be calculated by adding:
o The aggregate Contribution for the period prior to such election change; to
o The total Contribution for the remainder of such Period of Coverage to the DCFSA; reduced
by
o All reimbursements made during the entire Period of Coverage.
B.5 Establishment of Account
The Plan Administrator will establish and maintain a DCFSA with respect to each Participant who has
elected to participate in the DCFSA, but will not create a separate fund or otherwise segregate assets for
this purpose. The account so established will merely be a record keeping account with the purpose of
keeping track of Contributions and determining forfeitures.
Crediting of Accounts. A Participant’s DCFSA will be credited following each Salary Reduction
actually made during each Period of Coverage with an amount equal to the Salary Reduction
actually made.
Debiting of Accounts. A Participant’s DCFSA will be debited during each Period of Coverage for
any reimbursement of Dependent Care Expenses incurred during the Period of Coverage.
Available Amount is Based on Credited Amount. The amount available for reimbursement of
Dependent Care Expenses may not exceed the year-to-date amount credited to the Participant’s
DCFSA, less any prior reimbursements. A Participant’s DCFSA may not have a negative balance
during a Period of Coverage.
51
B.6 Grace Period and Unused Year End Balance
Grace Period. The Employer has the discretion to establish a grace period following the end of
the Plan Year as follows. If a Participant has unused funds in his or her DCFSA at the end of the
Plan Year, such Participant is allowed to carry over the unused balance for reimbursement of
Dependent Care Expenses incurred during the Grace Period. Unused funds in a Participant’s
DCFSA may not be used to reimburse another Benefit Option the Participant may have elected.
The Grace Period shall begin immediately following the end of the Plan Year and terminate on
the 15th day of the third calendar month after the end of the Plan Year.
Use It or Lose It Rule. Except for expenses incurred in an applicable Grace Period, if any balance
remains in the Participant’s DCFSA after all reimbursements have been made for the Period of
Coverage, it shall not be carried over to reimburse the Participant for Dependent Care Expenses
incurred during the subsequent Plan Year. The Participant shall forfeit all rights with respect to
such balance.
Use of Forfeifture. All forfeitures shall be used by the Plan in the following ways:
o To offset any losses experienced by the Employer during the Plan Year as a result of making
reimbursements with respect to all Participants in excess of the Contributions paid by such
Participant through Salary Reduction;
o To reduce the cost of administering the DCFSA during the Plan Year or the subsequent Plan
Year (all such administrative costs shall be documented by the Plan Administrator); and
o To provide increased Benefits or Compensation to Participants in subsequent years in any
weighted or uniform fashion the Plan Administrator deems appropriate, and consistent with
applicable regulations.
Unclaimed Benefits. Any DCFSA Benefit payments that are unclaimed by the close of the Plan
Year following the Period of Coverage or Grace Period in which the Dependent Care Expense
was incurred shall be applied as described above.
B.7 Reimbursement Procedure
Timing. Within 30 days after receipt by the Plan Administrator of a reimbursement claim from a
Participant, the Employer will reimburse the Participant for the Participant’s Dependent Care
Expenses or the Plan Administrator will notify the Participant that a claim has been denied. This
time period may be extended an additional 15 days for matters beyond the control of the Plan
Administrator, including in cases where a reimbursement claim is incomplete. The Plan
Administrator will provide written notice of any extension, including the reasons for the
extension, and will allow the Participant 45 days from receipt of the written notice in which to
complete an incomplete reimbursement claim.
Claims Substantiation. A Participant who has elected to receive DCFSA Benefits for a Period of
Coverage may apply for reimbursement by completing, signing, and returning an application to
the Plan Administrator by no later than the date set by the Plan Administrator each year, setting
forth:
52
o The person or persons on whose behalf Dependent Care Expenses have been incurred;
o The nature and date of the expenses incurred;
o The amount of the requested reimbursement;
o The name of the person, organization or entity to whom the expense was or is to be paid;
o A statement that such expenses have not otherwise been reimbursed and the Participant
will not seek reimbursement through any other source;
o The Participant’s certification that he or she has no reason to believe that the
reimbursement refunded, added to other reimbursements to date will exceed the limit
herein; and
o Other such details about the expenses that may be requested by the Plan Administrator.
The Participant shall include bills, invoices, or other statements from an independent third party
showing that the Dependent Care Expenses have been incurred and the amounts of such
expenses, together with any additional documentation that the Plan Administrator may request.
Claims Denied. For appeals of claims that are denied, see the Appeals Procedure in the Plan
Document.
B.8 Reimbursements After Termination
If a Participant’s employment terminates, the Participant may submit for reimbursement Dependent
Care Expenses incurred after the date of termination up to the amount of the Participant’s remaining
DCFSA Benefits.
B.9 DCFSA Participant vs. Claiming the Dependent Care Tax Credit
Employees often have the choice between participating in their employer’s DCFSA on a Salary Reduction
basis or taking a Dependent Care Tax Credit under Code §21. Employees cannot take advantage of both
tax benefit options. Employees with questions regarding which option is best should consult with an
accountant.
EMPLOYER NAME
Administered by
2013 Guide to Your FSA Benefits
P a g e | 1
2013 Guide to Your FSA Benefits
TABLE OF CONTENTS
Introduction .................................................................................................................................... 2
Health Care Flexible Spending Account ......................................................................................... 3
Benny Card (FSA debit card) ...........................................................................................................7
Dependent Care Flexible Spending Account .................................................................................10
Enrollment ..................................................................................................................................... 12
Making a Change ........................................................................................................................... 13
Termination/Retirement ............................................................................................................... 14
Flexible Spending Account Claims ................................................................................................ 15
Claim Submission & Filing Guidelines .......................................................................................... 17
P a g e | 2
2013 Guide to Your FSA Benefits
INTRODUCTION
A Flexible Spending Account (FSA) is an employer-sponsored plan that lets you deduct dollars from your
paycheck before they are taxed and put them into a special account.
FSA accounts are exempt from federal income taxes, Social Security (FICA) taxes and, in most cases, state
income taxes. FSA participation will impact earnings reported to the Social Security Administration. In
accordance with Internal Revenue Code Section 125, allowable premiums for health and dental insurance are
currently taken on a pre-tax basis. The more money you put in, the more tax you avoid. When you use the
money in your account to pay for out-of-pocket family care expenses, you avoid paying
taxes on those dollars. Depending on your tax bracket, you will save up to 30% on out-of-
pocket family care expenses.
How does the FSA work?
When you enroll in the FSA plan, you estimate the amount of family care expenses you are sure you will incur
during the plan year. You have that amount deducted from your paychecks in equal amounts throughout the
year. Though your actual salary remains the same, your taxable salary as reported to the government is
reduced by the amount you put into your FSA.
After you enroll in the FSA, ASIFlex will send you a confirmation of your enrollment and reimbursement
forms to your home address. As you incur eligible expenses throughout the plan year, you submit a
Reimbursement Form (by fax or mail) along with documentation of the expense, and you are reimbursed with
funds from your FSA account. You are not taxed on these reimbursements. After each claim, you will receive
an account summary.
Federal rules state that you will only be able to be reimbursed for expenses you incur during the plan year,
which runs from January 1, 2013 - December 31, 2013, and the accompanying FSA grace period which runs
from January 1, 2014 - March 15, 2014. IRS rules also state that if you do not use all of the money in your
account, unused funds will be forfeited to the State.
You can only change your election during the plan year as a result of certain eligible event changes. Also, your
Social Security benefits calculations will be based on your lower taxable earnings figures. (You can check with
your local Social Security office to explore any effects this may have on your benefits – which are usually very
minor.)
____________________ has contracted with ASIFlex to perform certain administrative functions for the
Plan. ASIFlex processes all claims for the Health Care Flexible Spending Account and the Dependent Care
Flexible Spending Account. If you have any questions concerning claims, please contact ASIFlex, P. O. Box
6044, Columbia, MO 65205, 800-659-3035, email: asi@asiflex.com, or on-line at www.asiflex.com.
Flexible Spending Accounts offer tax savings for your
out-of-pocket medical expenses. Most people save at
least 25% on each dollar that is set aside.
P a g e | 3
2013 Guide to Your FSA Benefits
ESTABLISHING AND USING YOUR
HEALTH CARE FLEXIBLE SPENDING ACCOUNT
Estimate your family’s annual out-of-pocket health care expenses. You may include expenses
for anyone who is a qualified dependent for tax purposes. (There are exceptions for the expenses of
children of divorced parents. Please call ASIFlex at 1-800-659-3035 for further information.) When
calculating your annual election, include predictable expenses only.
Annual Maximum $2,500.00 Annual Minimum $_______
Qualifying Health Care Expenses include all medical, dental and vision expenses not covered
or not reimbursed by insurance which are incurred by you or your eligible dependent (definition
available at www.asiflex.com) during the Plan Year or Grace Period for health care as defined
in Section 213(d) of the Internal Revenue Code. Please refer to the following list and IRS Publication 502
(available at www.asiflex.com) for further details on qualifying expenses. Expenses qualify for the
health care FSA based on when they are incurred, not when they are paid. Federal
regulations do not allow any insurance premiums or long-term care expenses to be
included under the FSA. Please contact ASIFlex at asi@asiflex.com, (800) 659-3035 if you have any
questions regarding particular expenses.
Below is a partial listing of qualified health care expenses. Expenses can only be claimed based
on the date incurred regardless of the date you are billed or pay for the expense.
Deductibles
Co-pays
Doctor’s fees
Dental expenses
Vision care expenses
Prescription glasses
Contact lenses and solutions
Corrective eye surgery
Prescription drugs
Chiropractor’s fees
Over-the-Counter drugs & medicines
(require a prescription)
Insulin
Orthodontia/braces (See details on page
5)
Routine physicals
Hearing aids including batteries
Transportation expenses related to
illness
Medical equipment
Non-Qualifying Health Care Expenses
This is a partial list of related items that do not qualify under the Plan. There may be other items that
do not qualify that are not listed here.
Cosmetic procedures; e.g. face-lifts, skin
peeling, teeth whitening, veneers, hair
replacement, removal of spider veins
Clip-on or non-prescription sunglasses
Warranties & insurance premiums
Toiletries
Long-term care expenses
Medicines, drugs, herbs, or vitamins for
general health and not used to treat a
medical condition
Expenses that are merely beneficial to
your general health (e.g., vacations)
Health club dues
Over-the-counter drugs and medicines
(without a prescription)
P a g e | 4
2013 Guide to Your FSA Benefits
NOTICE - Over-the-Counter Medication Eligibility is Limited
The federal health care reform bill passed in March, 2010 states that as of January 1, 2012, over the
counter (OTC) drugs and medicines will only be reimbursable through your Health Care FSA if you have a
valid prescription. See the list below for examples of OTC medicines. Insulin still qualifies for
reimbursement without a prescription.
Equipment, supplies, and diagnostic devices such as bandages, hearing aid batteries, blood sugar test kits,
etc. will remain eligible for reimbursement without a prescription.
Following is a list of examples of OTC medicine categories no longer eligible for reimbursement without a
prescription after January 1, 2012:
Acid Controllers Allergy & Sinus
Anti-Diarrhea Products Anti-Gas Products
Anti-Itch & Insect Bite Products Baby Rash Ointments
Cold Sore Remedies Cough, Cold & Flu Products
Digestive Aids Hemorrhoid Remedies
Laxatives Motion Sickness
Pain Relievers Respiratory Treatments
Sleep Aids & Sedatives Stomach Ailment Remedies
If you use the Benny Card at merchants that have implemented the Inventory Information
Approval System (IIAS), you will not be able to pay for OTC medicine with the Benny Card,
even if you have a prescription on file with ASIFlex. You will be required to submit a
reimbursement request, along with a copy of the prescription and the cash register receipt
in order to be reimbursed for these expenses.
Eligible Dependents - Expenses for you and your spouse are automatically eligible for reimbursement
through the Health Care FSA. Federal rules stipulate that expenses for your children or tax dependents
will qualify for reimbursement through the program if one of the following criteria are met: If the
individual is a(n):
1) Adult Child – the individual must be a “child” of the taxpayer (son, daughter, stepson,
stepdaughter) or an eligible foster child and be age 26 or younger for the entire plan year in which
medical expenses are claimed; or
2) Qualify as a tax dependent, as either a Qualifying Child or a Qualifying Relative.
a. Qualifying Child – in order for someone to qualify as a tax dependent as a Qualifying
Child, the individual must:
Be the taxpayer’s child (including an adopted child, stepchild or eligible foster child),
brother, sister, stepbrother, stepsister or a descendant of one of these relatives;
Be under the age of 19 (age 24 if a full-time student);
Live with the taxpayer for more than half of the year; and
Not have provided over half of his or her own support during the year.
b. Qualifying Relative – in order for someone to qualify as a tax dependent as a
Qualifying Relative, the individual must:
Be a blood relative or reside with the taxpayer if not a blood relative;
Receive over half of his/her support from the taxpayer; and
Be a US citizen.
P a g e | 5
2013 Guide to Your FSA Benefits
Under the health care FSA, you may now include qualified expenses for your child(ren) until the end of
the month in which your child(ren) reach age 26. Your child does not need to live with you in order for
you to claim his/her health expenses that you have incurred on his/her behalf. Please see IRS Notice
2010-38 for further information.
Orthodontic expenses may be assumed to be incurred at the time a monthly
payment is due and paid. These monthly payments must be spread out evenly over
the expected period of orthodontic treatment. Therefore, claims submitted for
orthodontic payments that meet the above are allowable. You may also submit a claim
for a reasonable down payment of the orthodontic treatment if the down payment is
made at the time the appliances are placed. Claims for payments made prior to being
due or that otherwise do not meet the above requirements will not be processed.
Claims for the entire fee paid at the beginning of treatment will not be processed, nor
will claims for an entire year’s payments made at the beginning of the year be
processed. To claim orthodontic down payments, you must include a copy of the
treatment contract and payment schedule along with proof of payment or a receipt of
payment stating the date the braces were placed.
Enroll in the Health Care Flexible Spending Account Plan. See the separate
open enrollment checklist for detailed open enrollment instructions. Enroll on-line during open
enrollment. Print and maintain the confirmation statement as you will be required to provide it if there is
a discrepancy in your election. Your annual election will be divided by ___, the number of paychecks
from which a deduction will be taken during the plan year, to get your per paycheck deduction. New
employees should contact their Human Resources office for an enrollment form and assistance with
enrollment.
Receive health care services. A health care expense is incurred when the services are provided that
create the expense. You must receive the services before you file a claim for those services.
File claims. After you have received the health care services and know the amount of your responsibility
for the bill, you may submit a claim for those expenses to ASIFlex. See Flexible Spending Account
Claims on page 12 for details on claims filing. Extra claim forms are available over the Internet at
www.asiflex.com or __________________.
Grace Period: If you are a participant as of December 31st of a Plan Year, you may continue to incur
expenses through March 15th of the following year to use any remaining funds in the Plan Year that just
ended. Claims for expenses incurred during this Grace Period are paid from the oldest year’s funds first
unless you request otherwise.
For example: If you have $50 remaining in your 2012 flexible spending account as of January 1, 2013 and
incur an expense for $100 on February 10, 2013, this claim will be paid $50 from your 2012 FSA and the
remaining $50 will be paid from your 2013 FSA. If you do not want a claim for services provided January
1st through March 15th paid out of the old plan year, please write a note and enclose it with your claim
form.
Receive reimbursements. ASIFlex will review your claim, and if approved will reimburse you for the
medical expenses within one day of their receipt of the claim.
Payment from your Health Care Flexible Spending Account will be made up to the approved
amount of your claim or your remaining annual election, whichever is less. Payment is not limited to the
amount in your account at the time of your claim. Your per pay contributions will continue for the
remainder of the Plan year.
If you have questions
about using your FSA
dollars for orthodontia
expenses, please
contact ASIFlex at 1-
800-659-3035.
P a g e | 6
2013 Guide to Your FSA Benefits
Participants on unpaid leave. To maintain coverage, you must make arrangements prior to going on
unpaid leave with your Human Resources Office to pay for coverage after you return from unpaid leave. If
you have been on unpaid leave for longer than 30 consecutive days and did not elect to catch up
contributions when you return, the election and corresponding coverage will be revoked (effective on the
last day worked). Once your coverage is revoked, your Benny Card will be immediately suspended.
A new election may be made upon 31 days of return to work, effective for coverage the first of the month
following approval of the submitted form. However, no coverage will exist for months in which no
contributions were made if the participant had not elected to catch up contributions prior to the end of the
30 days. There will be a hold put on a participant’s account (no claims will be paid) if contributions are
not received on two consecutive payrolls and no leave form has been filed with your Human Resources
Office.
Health Care FSA Participants called to Active Duty in the middle of the plan year. If you are
a military reservist who is called to active duty for at least 180 days and are a Health Care FSA participant,
you may request a Qualified Reservist Distribution (QRD) to access funds that might otherwise be
forfeited. Requesting a QRD will allow you to access funds you have set aside in your Health Care FSA
without incurring eligible expenses to seek reimbursement. If you request a QRD, the Plan will pay you
the amount contributed to the Health Care FSA, as of the date of the QRD request, minus any
reimbursements received as of the date of the request. QRDs are subject to employment taxes and will be
included in your gross income and wages. A QRD will be reported as wages on your W-2 for the year in
which the QRD is paid.
Once you request a QRD, you will forego the right to claim any additional expenses incurred while you
were an active employee. However, if you return from your military leave and re-enroll in
____________________’s FSA program during the same plan year, you may claim expenses incurred
during your NEW period of coverage. All requests for a QRD must be submitted by the end of the FSA
grace period (March 15th) following the close of the previous plan year. For example, if you would like to
submit a request for a QRD for the 2012 plan year, you must submit this request no later than March 15th,
2013.
If you have questions about electing to receive a QRD, please contact your benefit representative for
additional details.
Other Considerations Regarding the Health Care Flexible Spending Account
Coverage Continuation (COBRA). To the extent required by COBRA, a participant or his/her spouse
or dependent may elect to continue the coverage elected under the Health Care Flexible Spending Account
Plan even though the participant’s or his/her spouse's or dependent's election to receive benefits expired
or was terminated, under the following circumstances:
1) Death of the participant;
2) Termination (other than for gross misconduct) or a reduction in hours*;
3) After retirement*;
4) Divorce of the participant;
5) A dependent child ceases to be a dependent under the terms of this plan.
* Please see Termination/Retirement on page 15 for additional details related to coverage and
reimbursement.
When the Plan is notified that one of the events has occurred, the right to choose continuation
coverage will be provided to each eligible person(s) if, on the date of the qualifying event, the
participant’s remaining benefits for the current Plan Year are greater than the participant’s remaining
contribution payments. The right to elect to continue ends 60 days from the date the notice of the right to
continue coverage is provided by the Administrator. It is the responsibility of the participant or a
P a g e | 7
2013 Guide to Your FSA Benefits
responsible family member to inform their Human Resources Office of the occurrence of an event
described in bullet points 3 or 4 above.
Continuation coverage will not extend beyond the end of the current Plan Year but may terminate earlier
if the premiums are not paid within 30 days of their due dates. Payments for expenses incurred
during any period of continuation shall not be made until the contributions for that period
are received by the Administrator. An administrative charge of 2% is assessed for each premium
paid for continuation coverage.
USE THE BENNY CARD (FSA DEBIT CARD) TO PAY FOR YOUR HEALTH CARE
EXPENSES
The Benny Card provides a convenient method to pay for out-of-pocket health care expenses for you, your
spouse and/or any tax dependents. The IRS has stringent regulations regarding appropriate use of the
Benny Card, such as where the card can be used, and when follow-up documentation is
required (use of the Benny Card DOES NOT necessarily eliminate all of the paperwork).
The Benny Card is a great benefit, but it is important that you take a moment and understand how it
works.
Where can the card be used?
Per IRS regulations, the Benny Card can only be used at Health Care Providers (based upon the Merchant
Category Code) and at stores that have implemented an Inventory Information Approval System (IIAS).
1) Health Care Merchant Category Codes (MCC): Every merchant that accepts credit cards
has an MCC, which is a general category that is assigned when the merchant applies for the right
to accept credit cards. The FSA debit card will work to pay providers that have an MCC that
indicates the merchant is a health care provider (hospital, doctor, dentist, optometrist,
chiropractor, etc.).
2) Inventory Information Approval System (IIAS): The IRS also allows the Benny Card to be
used at retail stores that have IIAS in place. IIAS restricts purchases with your FSA Benny Card
to eligible expenses, and you will never be prompted for follow-up documentation for purchases
at these stores. Please note that if you have a medical condition that allows you to claim expenses
that are not normally eligible, the Benny Card will not be able to pay for these expenses at these
stores. You will have to pay with a separate form of payment and submit a claim. The Benny
Card will work at these stores, even if the MCC does not indicate it is a health care provider.
However, you will not be able to pay for OTC drugs or medicines with the Benny
Card, even if you have a prescription.
A list of stores with this system in place now (and some expected in the future) is available online,
at www.asiflex.com/debitcards. Purchases at these stores will never require follow-up
documentation!! Please note that as of July 1, 2009, IRS regulations require all pharmacies to
have the IIAS in place, or your card may be declined at the point-of-sale.
When do I have to turn in paperwork?
Benny Card transactions can be accepted by the FSA administrator without any follow up if the merchant
is an acceptable merchant type such as a physician's office or hospital and at least one of three other
criteria are met. Transactions are electronically substantiated if:
P a g e | 8
2013 Guide to Your FSA Benefits
The dollar amount of the transaction at a health care provider equals the dollar amount of the co-
payment or any combination of any known co-pays up to five times the highest known co-pay, for
the employer-sponsored health, vision or dental plan that participant has elected;
The expense is a recurring expense that matches expenses previously approved as to amount,
provider, and time period (e.g., for an employee who pays a monthly fee for orthodontia at the
same provider for the same amount); or
The merchant maintains a compliant Inventory Information Approval System (IIAS) for over-the-
counter supplies (e.g Band-aids, contact lens solution, etc.) and prescription medication (this
system restricts purchases with the Benny Card to FSA-eligible expenses).
Any transaction that does not meet the above criteria will prompt a request for follow-up documentation.
What happens if I don’t submit requested documentation?
As detailed above, there are times when you may use the Benny Card to purchase FSA eligible items or
services and additional documentation will be required to substantiate the transaction, in accordance with
IRS Regulations. When follow up documentation, or a statement of services is required, ASIFlex will send
you an e-mail or letter requesting this documentation. The requested information should include the
following information: name of provider, name of member (or member’s spouse or dependent), date the
service was provided, brief description of the service(s) provided, and the amount that was your
responsibility.
ASIFlex will send the initial request for follow up documentation within a few days of the Benny Card
transaction. Should you not comply with the request, ASIFlex will make a second request in
approximately three weeks. Should you not comply with the second request, a third notice will be sent to
you stating that the Benny Card has been “suspended” because the requested documentation was not
received by ASIFlex.
When you use the Benny Card for a transaction requiring documentation, those dollars are identified as
“overpaid” within your FSA account until the transaction is substantiated. If you submit a manual claim
before the Benny Card transaction is substantiated, the dollars associated with the manual claim will be
used to offset the overpaid dollars from the Benny Card transaction. This will prevent the manual claim
from being reimbursed in part, or in full, depending upon the dollar amount of the manual claim. Once
the Benny Card transaction is substantiated, the manual claim used to offset the Benny Card transaction
will be reimbursed in full. See the following examples for further explanation:
Example 1: Lisa pays her eye doctor $250 for contacts using her Benny Card. ASIFlex sends Lisa
a notice asking for follow-up documentation for the $250 purchase. Prior to submitting the
detailed statement from her eye doctor, Lisa submits a manual claim to ASIFlex for a $100
prescription which she paid for out-of-pocket. ASIFlex will process the $100 claim but no payment
will be issued that day. Instead, the amount of the manual claim will be used to offset the Benny
Card transaction. This will result in ASIFlex showing Lisa’s’ overpaid amount reduced from $250
to $150. Two weeks later Lisa submits the follow up documentation for the Benny Card
transaction used to purchase the contacts to ASIFlex. ASIFlex will then process the supporting
documentation for $250 and Lisa will be issued a payment of $100 for her manual prescription
claim.
Example 2: John goes to the dentist and pays $200 for a root canal with his Benny Card. He
then receives a notice from ASIFlex requesting follow up documentation. John submits the
statement of services from his dentist along with the notice received from ASIFlex. ASIFlex
reviews and processes the follow up documentation to substantiate the claim. John’s FSA account
will no longer be showing as “overpaid “since all follow up documentation was submitted.
P a g e | 9
2013 Guide to Your FSA Benefits
If you are unable to provide documentation for a Benny Card transaction in question, you may submit
expenses incurred out-of-pocket to offset the Benny Card transaction. The expenses that are incurred
out-of-pocket must not be paid for using the FSA Benny Card.
Should you neglect to submit the requested documentation and the plan year comes to an end (following
the Plan’s provision for documentation to be submitted by April 15), ASIFlex will provide notice to
____________________ that the claim was not substantiated within the plan year as required by IRS
Regulations. You will be asked to repay the unsubstantiated claims by submitting payment by check to
____________________.
Is there a cost for the Benny Card?
Yes. There is a $____ annual fee that will be deducted from your available balance in January, 2013.
There are no refunds for the Benny Card if you terminate employment or use up your balance early in the
plan year.
How do I request a Benny Card?
You can request to receive a Benny Card through the online enrollment site available during open
enrollment, or by completing the Benny Card application form. Generally, it takes about two weeks to
receive the card once it has been requested.
Can I request additional Benny Cards?
Yes. Everyone who requests a card will receive two Benny Cards in the mail. If you would like additional
cards, they are available by emailing ASIFlex directly at asi@asiflex.com and placing your request. There
is a $___ fee for each additional Benny Card request. Please note that all Benny Cards will be in the
name of the FSA participant.
I had a Benny Card for 2012, and re-enrolled in the FSA for 2013. Will my 2012 card still be
valid?
Yes, as long as you have re-enrolled in the FSA program for 2013, your Benny Card will be funded with
your new annual election as of January 1, 2013. Please do not throw away your Benny Cards from
previous plan years until the expiration date on the physical Benny Card passes. If you have discarded
or destroyed your 2012 Benny Card and would still like to use the card in 2013, you will be
assessed a $____ replacement card fee for each additional card you request. This fee is on
top of the $_____ annual card fee.
Can I use the Benny Card to pay for OTC medicine at stores that have implemented IIAS if I
have a prescription on file with ASIFlex?
No, you will not be able to pay for OTC medicine with the Benny Card, even if you have a prescription on
file with ASIFlex. You will be required to submit a reimbursement request, along with a copy of the
prescription and the cash register receipt in order to be reimbursed for these expenses.
P a g e | 10
2013 Guide to Your FSA Benefits
ESTABLISHING AND USING YOUR DEPENDENT CARE FLEXIBLE SPENDING
ACCOUNT
Estimate your total dependent care expenses for the Plan Year. Include predictable expenses
only.
Annual (household) Maximum $5,000.00 Annual Minimum $______
You and your spouse together may include up to $5,000.00 per year ($2,500 in the case of a married
individual filing a separate tax return for the plan year) or the lesser of your or your spouse’s earned
income for the plan year. In the case of a spouse who is a full-time student at an educational institution or
is physically or mentally incapable of caring for himself or herself, such spouse shall be deemed to have
earned income of $250 per month if you have one dependent and $500 per month if you have two or
more dependents.
A Qualifying Individual is your Dependent who is under the age of 13 (when services are incurred) or
your Spouse or an older Dependent who is mentally or physically incapable of self-care who lives in your
home at least 8 hours each day. If you are divorced, the Qualifying Individual must be your son or
daughter for whom you have more than 50% physical custody. Please call ASIFlex before enrolling in this
account if you have unique day care or joint custody arrangements. Be sure to notify your Human
Resources Office within 31 days of a change in eligibility of a qualifying individual if you need to change
your election.
A Qualified Provider can provide care in your home or outside your home. The expenses may not be
paid to your spouse, a child of yours who is under the age of 19 at the end of the year in which the
expenses are incurred, or to an individual for whom you or your spouse is entitled to a personal tax
exemption as a dependent.
The Dependent Care Flexible Spending Account is an alternative to taking a “Tax Credit” allowed
with your tax filing each year. You may receive a tax break on your expenses, but you must choose
whether to use the “Tax Credit” or the “FSA”. The IRS will not allow you to receive two tax breaks on the
same expenses.
A Tax Credit is allowed for child/dependent care expenses of up to $6,000 per year for two or more
dependents ($3,000 per year for one dependent). You file for the “tax credit” on your annual tax
return, at the end of the year. The credit is an amount equal to your dependent care expenses
multiplied by a percentage determined by your combined adjusted gross income. The percentage
decreases from a high of 35% to a low of 20% as your income increases.
The Dependent Care Flexible Spending Account Plan allows a tax break on up to $5,000.00 per
year, $2,500 if married filing separately, for any number of dependents; one, two, or more. You will
experience “tax savings” throughout the year with every paycheck you receive. Employees who pay
federal taxes of 15%, state taxes of approximately 6% and Social Security taxes of 7.65% would save
around 28% of expenses through the Dependent Care Flexible Spending Account Plan. As their
federal tax percentage rises, they would receive an even higher tax break by using the Dependent Care
Flexible Spending Account Plan.
Generally those employees with a combined family income over $31,000 will have a higher percentage tax
break through the Dependent Care Flexible Spending Account Plan. Those employees with a combined
income under $31,000 generally will have a higher percentage tax break using the Tax Credit. Please
contact your tax advisor if you have questions about which is better for you.
You are required to file Schedule 2 with your IRS Form 1030A or Form 2441 with your IRS Form
1030 to support the amount redirected for the calendar year. This is for informational purposes. You will
P a g e | 11
2013 Guide to Your FSA Benefits
not pay taxes on the redirected amount. Payments made to you under this category are not taxable, but
the amount redirected will appear on your W-2 form which informs the IRS that you have received a tax
break on that expense.
Qualifying Dependent Care Expenses
Qualifying Child/dependent care expenses are those that you incur in order for you and your spouse (if
married) to be gainfully employed that are considered to be employment-related expenses under Internal
Revenue Code §21(b)(2) to the extent that you or another person (if any) incurring the expense is not
reimbursed for the expense through any other Plan. Only expenses incurred for care and well-being
qualify for this tax break (Kindergarten, summer school and private school expenses, food and
transportation do not apply). Day camp fees incurred in order for you to work are allowable but
overnight camps are not. Refer to IRS Publication 503 (available at www.asiflex.com) for additional
information. The purpose of Publication 503 is to assist people with their income tax filing. It does not
address Dependent Care Flexible Spending Account Plans. However, most of the items listed as eligible
for the tax credit in 503 can be claimed through your Dependent Care Flexible Spending Account. You
can only claim expenses based on the date incurred (not paid as stated in 503). Please
contact ASIFlex at asi@asiflex.com, (800) 659-3035 if you have any questions regarding particular
expenses.
Qualifying Expenses are those that enable you to be gainfully employed including:
Daycare centers Babysitters
Day camps Nannies
Non-Qualifying Dependent Care Expenses
This is a partial list of items that do not qualify under the plan. There may be other items that do not
qualify that are not listed here.
Care that is not incurred in order for you to
work or look for work
Care for a child for whom you have 50% or
less physical custody
Kindergarten or other educational
expenses
Care for a child age 13 or older who is not
disabled
Amounts paid to your spouse or dependent
or to your (or your spouse's) son or
daughter who is under 19 years old at the
end of the year
Child support payments
Elder daycare for a dependent with gross
income over the Federal exemption limit
Food, transportation or activity fees Overnight camps
Enroll in the Dependent Care Flexible Spending Account Plan. See the separate open
enrollment checklist for detailed open enrollment instructions. Enroll on-line during open enrollment.
Print and maintain the confirmation statement as you will be required to provide it if there is a
discrepancy in your election. Your annual election will be divided by 26, the number of paychecks from
which a deduction will be taken during the plan year, to get your per paycheck deduction. New employees
should contact their Human Resources office for an enrollment form and assistance with enrollment.
Participants on Paid or Unpaid Leave. Dependent Care expenses are not eligible for reimbursement
during a period of leave. Because of this, you may choose to have your deductions stopped prior to going
on a paid leave. When you return to work, you will have 31 days to reinstate your coverage with the same
or a new annual election.
Receive dependent care services. Dependent care expenses are incurred when the day care is
provided. You must receive the dependent care services before you file a claim for those services.
File claims. After you have received the dependent care services, you may submit a claim for those
expenses to ASIFlex. Extra claim forms are available by contacting ASIFlex or online at www.asiflex.com.
P a g e | 12
2013 Guide to Your FSA Benefits
Grace Period: If you are a participant as of December 31st of a Plan Year, you may continue to incur
expenses through March 15th to use any remaining funds in the Plan Year that just ended. Claims for
expenses incurred during this Grace Period are paid from the oldest year’s funds first unless you request
otherwise.
For example: If you have $50 remaining in your 2012 flexible spending account as of January 1, 2013 and
incur an expense for $100 on February 10, 2013, this claim will be paid $50 from your 2012 FSA and the
remaining $50 will be paid from your 2013 FSA. If you do not want a claim for services provided January
1st through March 15th paid out of the old plan year, please write a note and enclose it with your claim
form.
You may have the dependent care provider complete the dependent care section of the claim form and
sign on the line provided in lieu of providing separate documentation for dependent care claims.
The tax identification number or Social Security number of the child/dependent care provider should be
listed on each of your claim forms. You must provide this number with your federal income tax return.
Please check with your childcare provider (before enrolling in this category) to be sure that you are able
to obtain their tax I.D. number or his/her Social Security number.
Receive reimbursements. ASIFlex will review your claim, and if approved will reimburse you within
one business day of their receipt of your claim up to the amount you have on deposit in your account. If
your claim exceeds your available funds, the difference will be recorded and paid as funds become
available from payroll.
Payment from your Dependent Care Flexible Spending Account will be made up to the
approved amount of your claim or your current balance, whichever is less. Any portion of your claim
which is not paid will be paid automatically as money is contributed from payroll. Total payments for the
year are restricted to your annual election.
ENROLLMENT
Eligibility: All permanent part-time and full-time employees are eligible to participate in this Plan on
the 1st of the month after completing an initial waiting period of 90 days counting his or her Employment
Commencement Date as the first such day.
The Plan Year is the twelve-month period from January 1 through December 31 of the same calendar
year.
Open enrollment is normally held in November prior to the beginning of the Plan Year. Check with
your Human Resources Office for the exact dates. You may enroll during open enrollment each year for
the upcoming Plan Year by enrolling on-line during open enrollment. (You may either select an annual
amount or a per check amount and the system will compute the rest for you.) You may also enroll during
the plan year if you experience a qualifying change in status and enrollment corresponds with a change in
eligibility caused by that status change. See the Making a Change Section for more information. The
Health Care Flexible Spending Account Plan and the Dependent Care Flexible Spending Account Plan
have slightly different rules regarding making an election change or enrolling mid-year. Forms are
available from your Human Resources office.
New employees must enroll by the first day of the month after completing the initial waiting period of
90 days to participate for the remainder of that plan year. You enroll by completing an enrollment form
available from your Human Resources Office. Enrollment forms should be sent by the first of the month
preceding the date of eligibilty to ensure timely enrollment. If you fail to enroll within the time period
described above, then you may not elect to participate in the Plan until the next Open Enrollment Period
or until an event occurs that would justify a mid-year election change.
P a g e | 13
2013 Guide to Your FSA Benefits
Enrollment during the plan year is effective the first day of the month following the initial waiting
period.
MAKING A CHANGE
Except as specified in this section, your election under the Plan is irrevocable for the Plan
Year. It is the employee’s responsibility to file a change with their agency’s Human
Resources Office. The election change request must be filed within 31 days of the date of
the qualifying event and becomes effective on the 1st of the month following the event or
the date the form is signed whichever is later and upon the approval of the request.
Requests received after 31 days will not be approved.
You may change your election if you, your spouse, or a dependent experience an event listed below which
results in a gain or loss of eligibility for coverage under ____________________ Health Care Flexible
Spending Account Plan or Dependent Care Flexible Spending Account Plan or a similar plan maintained
by your spouse's employer or one of your dependent's employer and your desired election change
corresponds with that gain or loss of coverage. Changes are only allowed if one of the specific events
listed below has occurred that caused the needed change in your account. Otherwise, your election is
effective through the end of the plan year.
Events 1 - 3 apply to the Health Care Flexible Spending Account Plan and the Dependent Care Flexible
Spending Account Plan.
1. Your legal marital status changes through marriage, divorce, death or annulment.
2. Your number of dependents changes by reason of birth, adoption (or placement for adoption), or
death. If your child no longer qualifies for dependent care because he or she turned 13, then that
is a loss of a dependent under the Dependent Care Flexible Spending Account Plan, but not under
any of the other plans.
3. You, your spouse or any of your dependents have a change in employment status (termination,
retirement, new employment, change from part time to full time or vice versa) that affects
eligibility for health insurance, the Health Care Flexible Spending Account or the Dependent Care
Flexible Spending Account with ____________________ or a plan maintained by your
spouse's or any dependent's employer. Please see page 14 for specifics related to termination of
employment from ____________________.
Events 4 - 6 apply to Health Care Flexible Spending Account Plan, but not the Dependent Care Flexible
Spending Account Plan.
4. You are served with a judgment, decree or court order, including a qualified medical child support
order regarding coverage for a dependent. If the order requires you to pay for medical expenses
not paid by insurance for a dependent child, then you may add or increase coverage under the
Health Care Flexible Spending Account Plan. If the order requires that another person pay for
medical expenses not paid by insurance for the dependent child, then you may drop or reduce
coverage under the Health Care Flexible Spending Account Plan.
5. If you, your spouse or a dependent becomes entitled to and covered under Medicare or Medicaid,
you may drop or reduce coverage under the Health Care Flexible Spending Account Plan.
6. If you, your spouse or a dependent loses eligibility and coverage under Medicare or Medicaid, you
may add or increase coverage under the Health Care Flexible Spending Account Plan.
P a g e | 14
2013 Guide to Your FSA Benefits
Events 7 - 8 apply only to the Dependent Care Flexible Spending Account Plan.
7. You change dependent care providers (including school or other free provider). You may make a
corresponding change to your Dependent Care Flexible Spending Account and your future salary
reductions if you change dependent care providers.
8. You may make a corresponding change to your Dependent Care Flexible Spending Account and
your future salary reductions if your dependent care provider who is not your relative changes
your costs significantly. A relative is any person who is a relative according to Code §152(a)(1)
through (8), incorporating the rules of Code §152(b)(1) and (2).
Your Salary Reduction amount for a pay period is, an amount equal to the annual contribution for
your FSA election, divided by the number of pay periods in the Plan Year following your effective date. If
you increase an election under the Health Care Flexible Spending Account Plan or Dependent Care
Flexible Spending Account Plan, your salary reductions per pay period will be an amount equal to your
new reimbursement limit elected less the salary reductions made prior to such election change, divided by
the number of pay periods remaining in the Plan Year beginning with the election change effective date.
Any increase in your election may include only those expenses that are incurred during the period of
coverage on or after the effective date of the increase. Your coverage for the remaining period of the year
shall be calculated by adding the amount of contributions made prior to the change to the expected
contributions after the effective date of the change and subtracting prior reimbursements.
TERMINATION/RETIREMENT
Termination of participation: Your participation will end on your last day of work or on the date of your last
paycheck with an FSA deduction should you terminate employment or retire from ____________________.
This means you will no longer be able to make contributions to the plan. Should you return to work as an eligible
employee within 30 days during the same Plan Year, your participation will be reinstated as it was. If you return
after 30 days during the same plan year, you will have the option of reinstating your coverage at the same annual
level you had prior to your termination or reinstating your coverage at the same per pay period amount with a
reduced annual amount. Should you choose the same annual amount, your per pay period contributions will be
adjusted so that your total contributions for the year will equal your annual coverage amount. You have 31 days
after you return to work during the same Plan Year to make a new election for the remainder of the Plan Year
(not to exceed the annual plan maximum). Except as specifed in the section on Coverage Continuation (COBRA)
in the Health Care Flexible Spending Account Plan Summary, expenses incurred while you are not a participant
will not qualify for reimbursement. Participation in the Health Care Flexible Spending Account ends on the day
of termination or retirement, or on the date of your last paycheck with an FSA deduction. You may continue to
file for Dependent Care expenses incurred during the Plan Year after the end of your participation.
Your participation will also end at the end of the expiration of the Period of Coverage, if the Plan is terminated, or
if you a file false or fraudulent claim for benefits.
P a g e | 15
2013 Guide to Your FSA Benefits
FLEXIBLE SPENDING ACCOUNT CLAIMS
Claims processed daily – within 1 day of
receipt of qualified claim
Direct deposit is available for claims
payment
Fax or mail to ASIFlex:
1-877-879-9038
P O Box 6044
Columbia, MO 65205-6044
Direct deposit notices sent via E-mail or
US Mail the same day payment is
generated
Go to www.asiflex.com for claim forms and
personal account information
You may file claims online via ASIFlex's secure
website, by going to www.asiflex.com, and
going to the Account Detail section and
uploading your scanned supporting
documentation.
Allowable expenses must be incurred during the portion of the Plan Year or Grace Period that you are a
participant. Claims must be filed by April 15th following the end of the Plan Year. After that, your account will be
closed and any balance remaining will be forfeited to ____________________ in accordance with federal
regulations. If April 15th is a holiday, Saturday, or Sunday, then claims must be filed by the first business day
following April 15th.
You must submit a completed claim form along with copies of invoices or statements from the provider
to serve as proof that you have incurred an allowable expense in order to receive payment. Statements are
required to include, the provider’s name, the date(s) of service, a description of the service(s), and
the expense amount. Copies of personal checks and paid receipts, without the above information, are not
acceptable. Documentation or copies will not be returned. For over-the-counter supplies that do not require a
prescription, the receipt or documentation from the store must include the name of the item pre-printed on the
receipt. You must indicate the existing or imminent medical condition (items such as vitamins and nutritional
supplements may require a physician's statement) for which the item will be used on the receipt, on the claim
form, or on a separate enclosed statement each time these items are claimed. You will be provided with a supply
of claim forms with your enrollment confirmation. Extra claim forms are available by contacting ASIFlex or over
the Internet at www.asiflex.com.
Purchases for general good health will not be accepted. Claims for items that are purchased for an existing
medical condition must be accompanied by a letter from your doctor stating the medical condition and the
items that are required as treatment for that specific medical condition (if they would otherwise not qualify as
a general good health item). A sample letter is available at www.asiflex.com. This letter can be used as
support for 12 months from the date of the letter.
Direct deposit into the bank account of your choice is available for your claim payments. By using direct
deposit you will not need to wait for a check to arrive and be deposited. A notice that a payment was made will
False or Fraudulent Claims. If ASIFlex believes that false or fraudulent claims have been submitted, ASIFlex will
investigate the submitted claims and forward, with all investigational findings, to _____________ for further
investigation. In the interim, ASIFlex will deny your claim and notify you that your account has been placed on hold until
the situation has been resolved. ___________________ will make a decision as to whether your participation will be
terminated in FSA and whether to recover any funds that may have been fraudulently obtained. ____________ has the
authority to deny claims found to be false or fraudulent and to terminate your participation in the FSA in accordance with
its discretionary duty as the Plan Administrator. _____________ may take legal or disciplinary action against a member
found to have committed fraud.
P a g e | 16
2013 Guide to Your FSA Benefits
be sent to you. This direct deposit notice is available by U.S. Mail or by email over the Internet. If you prefer,
a check can be mailed to you instead of payment by direct deposit.
If you receive a check for reimbursement and forget to cash it, the check is valid for six months from
the issuance date. If you have received a check and have not cashed it within six months, ASIFlex will attempt
to contact you via email or postal mail, and will offer to reissue the reimbursement to you.
If you have unused funds at the end of the claims filing period, those funds are forfeited to
____________________ and used to a) offset reimbursements to health care FSA participants who
terminate employment mid-year and have been reimbursed more than contributed at that point in time and
b) pay ASIFlex’s administrative fees.
P a g e | 17
2013 Guide to Your FSA Benefits
CLAIMS SUBMISSION & FILING GUIDELINES
Claim Submission Options: There are three different methods by which you may submit your claim.
Online:
Submitting your claim online is easy and convenient! Go to https://my.asiflex.com.
In order to submit your claim via ASIFlex’s secure online portal, you will need the following:
Your account user credentials (User Name, Password and Security Image). If you have not yet set up
your credentials, you will need your PIN (provided to you in your welcome packet and in each account
summary statement). If you do not have your PIN, you may call Customer Service at (800) 659-3035.
Access to a scanner so that you may scan your documentation as a PDF. You will be requested to
upload the documentation after you complete the online claim.
Toll-free fax:
(877) 879-9038
This option provides fast and easy claims submission. You may submit your claim via ASIFlex’s toll-free fax
number 24 hours a day, 7 days a week.
US Mail:
ASIFlex, P.O. Box 6044, Columbia, MO 65205
Claim Filing Guidelines:
• Clearly print your name, address, social security number (or EID as appropriate) and your employer’s
name.
• List expenses and arrange the supporting documentation in the same order.
• Enclose required documentation.
IRS Documentation Requirements:
Each item claimed must be supported with proper documentation, including each of the following five (5)
essential pieces of information. Your claim will not be processed without the following information:
1. Name of the provider or merchant (medical or dependent care)
2. Name of the person, or persons receiving the service or care
3. Date or range of dates of service or care
4. Cost of the service, not just the amount paid
5. Description of the service or care
Without a description of the service or care provided, your claim will be denied. Credit card receipts,
cancelled checks and billing statements without detailed service information are not substantial
documentation and will not be accepted. The description of the service or care can be as generic as “copay” or
“office visit”. If the description of the service is not listed on the receipt* provided from your service or care
provider, the provider may write the description on the receipt.
*Please note if a receipt is not available for dependent/elder care expenses, you may have the care provider
sign and date the claim form in the appropriate area instead of providing a receipt.
• Sign the claim form. Claim forms that are not signed will not be accepted.
• Keep copies of each receipt and claim form for tax purposes (Dependent/Elder Care FSA participants
must file IRS Form 2441 each year with tax return). Keep in mind that you will need the provider’s tax ID
or Social Security Number when you file your taxes.
• Submit completed claim form and supporting documentation to ASIFlex.