1. Flexible Spending
City of Bowling Green

2. Health Care flexible spending account
A healthcare spending account (FSA) allows you to set aside money (up to $2,600 per plan year) from your paycheck (before taxes are taken out) to pay for healthcare expenses your health plan doesn’t cover. The limit and eligible expenses are established by IRS regulations. The City sets the minimum of $15 per pay check.

3. HEALTH CARE FLEXIBLE SPENDING ACCOUNT
An FSA helps you plan for healthcare expenses and take home more of your paycheck. A key advantage of an FSA is that it may offer FICA, federal, and state tax savings. Since healthcare FSA contributions are deducted from your pay before they are taxed, you do not report them as income – which means you pay no taxes on the money you contribute to your FSA.

4. HEALTH CARE FLEXIBLE SPENDING ACCOUNT
WITH FSA
WITHOUT FSA
Example of annual tax savings
With FSA
Taxable income
$28,000
Amount deposited into FSA before taxes
-$ 1,500
Remaining taxable income
$26,500
Minus federal and Social Security taxes
-$ 9,447
If you had used after-tax dollars (instead of FSA dollars) for eligible health expenses -$
Spendable income
Your tax savings with an FSA
$17,053 $
Example of annual tax savings
Without FSA
Taxable income
$28,000
Amount deposited into FSA before taxes -$
Remaining taxable income
Minus federal and Social Security taxes
-$ 9,982
If you had used after-tax dollars (instead of FSA dollars) for eligible health expenses
-$ 1,500
Spendable income
Your tax savings without an FSA
$16,518 $
*This example is intended to demonstrate a typical tax savings based on 28% federal and 7.65% FICA taxes. Actual savings will vary based on your individual tax situation. Please contact a tax professional for more information on tax implications of an FSA.

6. Pre-paid benefits card
The Benny Prepaid Benefits Card will help you pay for medical costs.
The first thing to remember when using the Benny Card is to
SAVE YOUR RECEIPTS.
The IRS, which governs the use of the Benny Card, allows some of the expenses you incur to be automatically approved. But this won’t always happen. In some cases, you’ll receive a letter asking for an itemized receipt of the purchase. When you receive this letter, make sure you submit the receipts as soon as possible to avoid having the card suspended.

7. Itemized receipt What is an itemized receipt?
An itemized receipt must include:
The merchant or provider’s name.
The patient’s name.
Services received or items purchased.
Date of service.
The amount of the expense that is the patient’s responsibility

8. Itemized receipt
You might receive a letter requesting an itemized receipt when:
You use your Benny prepaid benefits card to pay a coinsurance bill from a doctor (for amounts not covered by insurance) that is not a standard copay.
You or your dependents are not covered by your employer’s health plan.
You buy items that are not eligible along with FSA-eligible items in a pharmacy, medical, dental, or vision location.
You purchase over-the-counter items from stores that do not electronically identify FSA-eligible items.

9. Pre-paid benefits card I used my card at my local pharmacy. Now what?
If the charge was for a prescription copay, be sure to get an itemized receipt for your records.
If the charge is for an over-the-counter item at a pharmacy that does not electronically identify FSA-eligible items, you should get an itemized receipt for your records. Meritain Health will send you a letter asking for a copy of the receipt.

10. Pre-paid benefits card I used my card at my doctor’s office. Now what?
The City of Bowling Green medical and dental plans do not have an office visit copay. Using your pre-paid benefits card on the day of service will require an itemized receipt and explanation of benefits be sent to Meritain. Meritain will send you a letter asking for a copy of an itemized receipt.
The provider (dentist, physician, orthodontist) can only estimate your amount owed. The claim must be processed through insurance to get an exact amount owed. Meritain may have negotiated a provider discount which is not applied until the claim is processed.
BEST PRACTICE:
DO NOT use your pre-paid benefits card at the point of service. Wait until you get the itemized billing statement from the provider, then match up the provider statement and the Meritain explanation of benefits (EOB). If they match, then write your pre-paid benefits card information on the billing statement and return to the provider.

11. Explanation of benefits
An explanation of benefits (commonly referred to as an EOB) is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf. What Information Is in My Explanation of Benefits? Your EOB has a lot of useful information that may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years.

12. EXPLANATION OF BENEFITS
A typical EOB has the following information:
Patient: The name of the person who received the service. This may be you or one of your dependents.
Insured ID Number: The identification number assigned to you by your insurance company. This should match the number on your insurance card.
Claim Number: The number that identifies, or refers to the claim that either you or your health provider submitted to the insurance company. Along with your insurance ID number, you will need this claim number if you have any questions about your health plan.
Provider: The name of the provider who performed the services for you or your dependent. This may be the name of a doctor, a laboratory, a hospital, or other healthcare providers.
Type of Service: A code and a brief description of the health-related service you received from the provider.

13. EXPLANATION OF BENEFITS
A typical EOB has the following information:
Date of Service: The beginning and end dates of the health-related service you received from the provider (If the claim is for a doctor visit, the beginning and end dates will be the same).
Charge (also known as Billed Charges): The amount your provider billed your insurance company for the service.
Not Covered Amount: The amount of money that your insurance company did not pay your provider. Next to this amount you may see a code that gives reason the doctor was not paid a certain amount. A description of these codes is usually found at the bottom of the EOB, on the back of your EOB, or in a note attached to your EOB.
Total Patient Cost: The amount of money you owe as your share of the bill. This amount depends on you health plan’s out-of-pocket requirements, such as an annual deductible, copayments, and coinsurance. Also, you may have received service that is not covered by your health plan in which case you are responsible for paying the full amount.

14. Use-It-or-lose-it benefit
The IRS allows employees to rollover up to $500 in their account to the following year. Any amount over $500 will be forfeited if not utilized in the plan year.
This rollover is automatic.
There must be a minimum account balance of $25 for the rollover to occur for employees not electing an FSA in the following year.
There is a 90-day run-out period to file claims from the previous year (if funds available).

15. Flexible SPending
The member CANNOT file a claim under the FSA and the HRA (Health Reimbursement Account).
The member selects which account to file the claim.
The same claim cannot be submitted to both the FSA and HRA.

16. Flexible spending account take-aways
An FSA allows you to put aside money (tax-deferred) to help pay for health care expenses.
Save your itemized receipts.
If you are new to the FSA this year you will receive a pre-paid benefits card – also called a “Benny Card”. If you had an FSA last year you will continue to use your current Benny card.
DO NOT use your pre-paid benefits card at the point of service (except for pharmacy and vision co-pays).
ALWAYS compare your provider billing statement with your Meritain Explanation of Benefits (EOB) – if they match, proceed with paying the bill. If they do not match, contact the Benefits Manager.
Any FSA balance over $500 is a use-it-or-lose it benefit at the end of that calendar year.
There is a 90-day run-out period to file claims from the previous year (if funds available).
Cannot submit claims to both the FSA and HRA