Spending Accounts Health Care & Dependent Care SHPS.
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Transcript of Spending Accounts Health Care & Dependent Care SHPS.
Spending Accounts
Health Care & Dependent Care
SHPS
February 2010 2APRIL 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 3APRIL 2010
General or Limited Purpose Health Care Spending Account
Maximum contribution: $420/ month (maximum of $5,040/ year)
Coverage for new employees is effective the first of the month following one full
calendar month of employment
Monthly administration fee: $3.20
Eligible medical care expenses include amounts paid for the diagnosis, cure,
treatment, or prevention of disease, and for treatments affecting any part or function
of the body. The expenses must be to alleviate or prevent a physical defect or
illness
“Cosmetic procedures” are ineligible (face lift, hair transplant, hair removal
(electrolysis), teeth whitening, liposuction)
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