Spending Accounts (For Plan Year 2013)
Health Care & Dependent Care
SHPS
February 2010 2APRIL 2010
Spending Accounts – SHPS/ADP No increase in admin fees with current plan design
HCSA annual maximum will reduce from $5,040 to $2,460
– Monthly maximum will be $205
– Compliance with Patient Protection and Affordable Care Act (PPACA)
– Note: a monthly administration fee of $3.20 is included in the total contribution amount
Employees who contributed a larger amount in 2012 will be reduced to the new HCSA maximum for 2013
Plan Design/Premium Changes for AE 2013
February 2010 3APRIL 2010
How Does it Work?
Employee chooses a monthly contribution amount
Pre-tax contribution is transferred into the Spending Account
Employee submits eligible expenses
Employee reimbursed with pre-tax dollars
February 2010 4APRIL 2010
General or Limited Purpose Health Care Spending Account
Employees may submit eligible expenses for your spouse (e.g. coinsurance payments; deductibles from another health plan)
It is illegal to submit expenses that have been paid by another insurance plan or reimbursed by another spending account
Children’s medical expenses covered under the employee, as well as the spouse’s, group medical coverage can be submitted
An Explanation of Benefits from both insurance carriers is required
February 2010 5APRIL 2010
Limited Purpose Health Care Spending Account
Employees must select if enrolling in a Health Savings Account
Only dental and vision costs that are not normally eligible under the General Purpose Health Care Spending Account are covered
February 2010 6APRIL 2010
Health Care Spending Account Debit Card
Employee must keep the EOBs and/or receipts
SHPS will request supporting documentation, normally every 2 months
EOBs and/or receipts along with the request letter from SHPS must be submitted for validation purposes
SHPS will submit validation letters online
If SHPS has the employee’s email address, requests will be emailed directly to the individual
February 2010 7APRIL 2010
Health Care Spending Account Debit Card
If documentation is not received after the validation request is issued, the card will be turned off (60 – 90 days)
An overpayment will be noted on the account
When a paper claim is received, a reimbursement will not occur. It will be deducted from the overpayment showing
February 2010 8APRIL 2010
Dependent Care Spending Account
Maximum contribution: $416/ month (maximum of $4,992/ year)
Coverage for new employees is effective the first of the month following one full calendar month of employment
Monthly administration fee: $3.20
Reimbursement requests will be processed after services have been fully rendered
Reimbursement subject to account balance
Department must transfer contributions to SPA before account can be credited
February 2010 9APRIL 2010
Dependent Care Spending Account
Eligible dependents would include:
Children under age 13
Spouse (if mentally or physically disabled)
Any other person who is a qualified IRS dependent, regardless of age, who is mentally or physically disabled
Health Savings Accounts
February 2010 11APRIL 2010
Health Savings Accounts
Tax-exempt account that can be used for qualified medical expenses not otherwise covered by the High Deductible Health Plan*
Qualified medical expenses include:• HDHP* Deductibles• Co-payments• Prescriptions and over-the-counter medication• Dental services• Vision Care
Must be enrolled in a High Deductible Health Plan (HDHP)
Cannot be enrolled in Medicare
Cannot be covered by another Health plan
Cannot be claimed as a dependent on someone else’s tax return
February 2010 12APRIL 2010
Health Savings Accounts
Funds are not subject to forfeiture; rollover from year to year
Maximum allowable contributions for Plan Year 2009:
Single: $3,000
Family: $5,950
Monthly service charge: $3.20 Additional contributions to the HSA can be made outside normal payroll deductions Contribution tickets are included with the HSA Welcome Kit to make post-tax
contributions It is the HSA account holder’s responsibility to ensure the total contributions do not
exceed the maximum allowed by the IRS
February 2010 13APRIL 2010
Health Savings Accounts
Money in the HSA can be used for an emergency situation for a non-qualified expense The distribution would qualify as taxable income
• 10% penalty tax would be assessed NOTENOTE: Agencies should not take a December payroll for January coverage, unless the
employee already had an HSA account. Investment opportunities are available through HSA administrator (JP Morgan Chase) Must maintain a $2,000 minimum account balance to qualify Investment transfers, contributions changes, and change of beneficiaries can be made anytime
during the Plan Year Catch up provision is provided
• Age 55 or older may contribute an additional $800 per year above the HSA maximum Tax Forms required for the HSA:
• Distributions reported on Form 1099 SA• Contributions reported on Form 5498 SA