Flexible Spending Accounts Savings Employees Money

Flexible Spending Accounts (FSAs) What is an FSA? A flexible spending account is an employer- sponsored benefit account that allows employees to set aside pre-tax funds to help pay for eligible out-of- pocket healthcare expenses. FSA benefits: Lower taxable income (increased take-home pay) Receive up to 30% savings on qualified healthcare expenses NEW EASY FSA SYSTEM! Starting this enrollment you will be able to link your insurance carriers to your FSA debit card. This will help you in not needing to submit receipts after the fact.

Why Should You Offer FSAs? Sample Employee Savings* Employee Savings Federal tax rate Annual FSA contribution Estimated annual employee savings 15% $1,500 $340 $2,500 $566 25% $490 $816 33% $610 $1,016 FSA Employee savings: Lower taxable income: FSA contributions are made pre-tax – before federal, social security, and most state taxes, meaning: Employees can reduce their taxable income and maximize their take-home pay Savings on qualified healthcare expenses: Pre-tax contributions allow employees to save up to 30% when spending pre-tax dollars they otherwise wouldn’t have. Time Savings: With the easyFSA system and mobile and online technology the FSA is as simple as signing up and spending your money. *For illustrative purposes only. Based on 7.65% FICA. Individual tax situations may vary. Please consult a tax adviser.

How Do FSAs Work? Summary An employee determines an annual election amount Annual election amount is deducted evenly from each pay check – on a pre-tax basis The full annual election is available on day 1 of the plan year for participants to spend on qualified out-of-pocket expenses FSA debit card for spending Online/mobile engagement tools At the end of the plan year, participants can rollover up to $500 of unused funds into the future plan year *You may also opt to offer a grace period in which employees are given a post-plan window to spend remaining funds

Employee Contributions How do FSAs Work? Employee Contributions During open enrollment, employees plan and select an annual election amount Annual FSA maximum: $2,700 Rule-of-thumb: Employees should estimate annual out- of-pocket healthcare expenses Funding amount cannot be changed mid-year without a qualified life changing event The annual election amount is divided evenly by paycheck, funds are deducted on a pre-tax basis and placed in the employee’s FSA The full annual election is immediately available to the employee on day 1 of the plan year Even though funds have not yet been withdrawn from future paychecks *New to FSAs* Up to $500 of unused funds can be rolled forward into the future plan year.

How do FSAs Work? Qualified Expenses Participants can use tax-free contributions to pay for qualified healthcare expenses Qualified expenses include: Co-pays, coinsurance, deductibles Dental and orthodontia Eye exams, contact lenses, eyeglasses Prescriptions Over-the-counter medical supplies Lasik And more! View the full list of eligible expenses: www.irs.gov/publications/p502/ Participants can receive up to 30% savings on eligible expenses, thanks to the nature of their tax-free contributions

How do FSAs Work? Debit Card Spending Debit cards give participants easy access to FSA funds Works just like a standard debit card, but funds are spent from the employee’s FSA Real time, on-demand access to funds Eliminates cash purchases & reimbursement hassles Point-of-sale purchase, provider payment, direct deposit employee reimbursement Debit cards can be used to purchase qualified healthcare products/services at: Physician & doctor offices Hospitals Pharmacies Opticians / vision care locations Dental offices And, even qualifying retail stores!

The New FSA Funds Rollover Policy How do FSAs Work? The New FSA Funds Rollover Policy In 2013, the US Department of Treasury modified the long-standing FSA ‘use it or lose it’ rule FSA participants can now rollover up to $500 of unused funds into the future plan year Future year maximum election is not impacted (remains $2,700) FSA Participant benefits: Greater flexibility - No need to precisely budget & plan healthcare expenses Lower risk – Employees reduce the risk of losing money Reduced waste – No more reckless end-of-year spending More savings – Less forfeiture risk = higher elections and tax savings

24/7/365 Account Access & Management Online FSA Access 24/7/365 Account Access & Management Online account access for FSA participants and their family Check your balance File a claim Access to account information & transaction activity Communication and alerts management Replace/re-order debit cards FSA features: Planning tools & calculators FSA statements & transaction history Reimbursement requests Bill payment

Mobile FSA Access For FSA participants ‘on the go’: Supports Apple and Android smartphones and tablets Available via the Apple App Store & Google Play Participant engagement features: View account balances View transaction history Attach receipts Edit alerts File a Claim Contact administrator

Questions? Call 630-773-2337