Questions & Answers

1. What are the benefits of participating in the HFSA?

	You are in control. You make the decision to participate. You are in control of how much you want to contribute to your HFSA account, up to $1,000 per year.
	Saves you money. Contributions to the plan are deducted from your paycheck before taxes. That means you will not pay taxes on the amount of money you deposit into your HFSA. It lowers your taxable income and saves you money in taxes.
	Manage your money. Contributions come out of your paycheck in equal installments. Now you can have money that has been setup to pay for health care expenses that are not paid by your insurance plans. Having money setup for health care expenses helps you better manage your money and budget.
	Tax free withdrawals. Withdrawals are tax free if you use the money to pay qualified medical expenses. See page 6 for a list of qualified medical expenses.
	Interest-free loans. You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. When you use the plan this way, it’s like getting an interest-free loan for your out-of-pocket health care expenses.

2. What’s in it for the city?

There are tax advantages for you to participate, and there are tax advantages for the city. You win by reducing your taxable income. The city benefits by reducing the amount of FICA tax it contributes on your behalf. We’re both SMART.

3. Can I put money in this plan for my spouse and dependent children’s out-of-pocket health care expenses?

Yes. You may request reimbursement for your own eligible expenses as well as your spouse’s, if you file a joint tax return. Expenses for a dependent child are eligible for reimbursement if you claim the dependent on your federal income tax return, the dependent lives with you, and you provide more than half of the dependent’s support. You or your dependents do not need to be covered by the city’s medical or dental plans to participate in the HFSA.

4. What if I change my mind during the year?

You will have to decide how much to contribute to this plan during open enrollment. Once you make your election for the year, you cannot increase or decrease your contribution until open enrollment next year. The only exception to this rule is if you have a family status change, such as marriage, divorce or legal separation, birth or adoption of a child, your child no longer qualifies as a dependent, or your spouse gains or loses employment.

5. Where can I find a list of reimbursable expenses?

	Eligble Expenses
	IRS Publication 502 at www.irs.gov.
	You may also contact the plan administrator at www.aflac.com or by phone at (800) 992-3522.

6. Do I have to wait until my contribution is deducted from my paycheck before I can file a claim for reimbursement?

No, you do not have to wait to file a reimbursement claim. You can file a claim for reimbursement up to the total amount you have elected for the year at any time after the beginning of the plan year, even if the money is not yet in your account.

This is one of the best benefits of the HFSA. Unlike the Dependent Reimbursement Plan, you do not have to wait for money to be deposited in your account to file, and receive reimbursement for an eligible health care expense.

7. What happens if I have money left over at the end of the year?

The IRS prohibits the plan from returning any money to you that you have not incurred and claimed by the end of the plan year. You will forfeit any money left in your account if:

1. You do not incur enough eligible expenses within the plan year, May 1 – April 30, to use up the amount that you elected, or
2. You do not incur enough eligible expenses before your employment with the city ends, or
3. You do not claim your reimbursement within 90 days of the end of the plan year, July 29.

8. What if I overestimated my expenses and can’t get to my dentist before April 30?

If you find that you have overestimated your health care expenses for the year, there are many ways to use the money in your account before the plan year ends, April 30. Remember, over-the-counter medications such as pain relievers, cold and sinus medications and vision expenses such as an extra pair of glasses or contact lenses are eligible expenses. So, it is rare that anyone leaves money in the account.

9. What is the difference between the Healthcare Flexible Spending Account and the Dependent Care Reimbursement Plan?

At first glance, the Healthcare Flexible Spending Account and the Dependent Care Reimbursement Plan look similar. Both save you money in taxes; both are Flexible Spending Accounts as defined by the Internal Revenue Service; and both are administered by FLEXONE.

However, these two benefits are separate plans, designed for two different purposes. The HFSA is a savings account for health care expenses incurred by you and your family. The Dependent Care Reimbursement Plan is also a pretax savings account. Only expenses incurred for dependent day care can be reimbursed from this account. The DCRP will not reimburse you for any health care expenses, even if they are for your dependents.

Confusion by some people comes from the misunderstanding that the DCRP benefit is for dependent health care expenses while the HFSA is for your health care expenses. This is incorrect. Eligible DCRP expenses include:

	licensed nursery school and day-care centers for children,
	licensed day care centers for disabled elderly parents,
	food and education provided as part of preschool care services.

Please read your Dependent Care Reimbursement Program guide for more detailed information about the DCRP benefit. The plan year is January through December. Enrollment for that plan is in November.

10. Can I transfer money from my Dependent Care Reimbursement Plan to the HFSA?

No. While there are many similarities between the HFSA and the Dependent Care Reimbursement Plan, they are separate plans, and money cannot be transferred from one to the other, even if you made a mistake by electing the wrong plan. So, please be careful when enrolling in these reimbursement programs. Be sure that you are enrolling in the intended benefit plan.

11. If I terminate during the plan year before April 30, may I continue to participate?

Participation after termination requires election of COBRA continuation coverage. COBRA also applies to dependents losing eligibility as a result of a family status change.

12. Will my pension benefit be affected by my participation in the Healthcare Flexible Spending Account?

No. Your city pension is calculated on your “base pay,” prior to the HFSA deduction. Your retirement benefit from Social Security is calculated on your taxable earnings, meaning the lower amount.

13. What if I leave my job with the city? Can I get the balance left in my account?

Yes, if you have incurred eligible expenses and claim them in the proper time period. Your HFSA benefit ends on your last day of employment with the city. You will only be able to make claims on expenses that you have incurred prior to your last day of employment. Your deductions stop with your last paycheck.

If your employment ends with the city during the plan year, there are two scenarios that can exist:

Scenario 1: You incurred more health care expenses than you had deducted from your paycheck.

You incurred more health care expenses than you had deducted from your paycheck.
You elected $240 for the plan year, May 1 – April 30, and $10 is being deducted from your paycheck over 24 pay periods.

On July 15, your spouse has office visits, laboratory and prescription expenses of $200. You file claims and receive reimbursement for the full $200.

On Nov. 1, six months into the plan year, your employment with the city ends. You have had $120 deducted from your paychecks.

You will have received $80 more than you have deposited into the plan; and you cannot be billed for the amount you did not contribute, per IRS regulations.

Although you can not file claims for expenses incurred after your termination, you have 90 days after termination to file claims for expenses incurred before termination.

Scenario 2: You have incurred less health care expenses than you had deducted from your paycheck.

You have incurred less health care expenses than you had deducted from your paycheck.

You elected $240 for the plan year, May 1 – April 30, and $10 is being deducted from your paycheck over 24 pay periods.

On Nov. 1, you have incurred no health care expenses and your employment with the city ends. You have had $120 deducted from your paychecks.

You will forfeit $120 in your account. It cannot be returned to you, per IRS regulations.

14. When do I have to file a claim?

Claims must be filed within 90 days of plan year end, unless you cease to participate before Apr. 30. In that case, you must file your claim within 90 days after your participation ends. All claims must be incurred while you are a participant.

15. Will FLEXONE reimburse me for every claim I submit?

Reimbursement is based on your annual election, amount previously reimbursed, proper documentation, and eligibility of the expense. If your claim is denied, FLEXONE will provide a specific reason in writing.

		Where do I send my claim? FLEXONE 1932 Wynnton Road Columbus, Georgia 31999-9950 or fax to: (877) 353-9256

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