1. © 2007 PAYFLEX SYSTEMS USA, INC. 1 > > January-December (enter plan year)

2. © 2007 PAYFLEX SYSTEMS USA, INC. 2 What is an FSA? Flexible Spending Accounts (FSAs) Allows you to pay for certain out-of-pocket health care expenses with “pre-tax” dollars. This means you get a tax deduction for these expenses before you ever file your tax return. You don’t pay Federal income or Social Security taxes on this money and, in most states, you don’t pay state taxes either. On average you will save about 30% on your total FSA contribution.

3. © 2007 PAYFLEX SYSTEMS USA, INC. 3 What does this mean to you?  Decrease Taxable Income  Increase Spendable Income Tax Savings!

4. © 2007 PAYFLEX SYSTEMS USA, INC. 4 FSA Savings - Example Real world example:  Let’s say someone in your family needs braces at an average cost of $4,500. This is typically paid over the course of one or two years. If you put this money into a Health Care Flexible Savings Account you will save approximately $1,350 in taxes.

5. © 2007 PAYFLEX SYSTEMS USA, INC. 5 Eligible FSA Expenses  Medical & dental deductibles, co-pays and co-insurance  Prescriptions  Over-the-counter medicines & supplies  Hospital expenses  Selected durable medical  Orthopedic devices

6. © 2007 PAYFLEX SYSTEMS USA, INC. 6 Eligible FSA Expenses  Eye Glasses, contact lenses  Saline/cleaning solutions  LASIK surgery  Hearing aids and batteries  Orthodontic care  Chiropractic expenses/ co-pays  Insulin, syringes for insulin

7. © 2007 PAYFLEX SYSTEMS USA, INC. 7 Eligible OTC Medications  Antacids  Anti-fungal ointments  Antiseptic ointments  Cold & Allergy  Throat Sprays  Lozenges  Nasal Sprays  Cough Syrups  Cough Drops  Eye drops  Gas Relief  Hemorrhoid medications  Laxatives  Motion-sickness pills  Pain Relievers  Arthritis Pain  Back / Head Pain  Sleep Aids  Stop smoking gums/patches  Vapor rubs

8. © 2007 PAYFLEX SYSTEMS USA, INC. 8 Ineligible Healthcare Expenses  Anti-Bacterial Soaps  Acne Treatments  Dandruff Shampoo  Dry Skin Creams/Treatments  Foot Care Products  Hair Loss Treatments  Electrolysis – hair removal  Cosmetic surgery  Teeth Bleaching  Mouthwash  Suntan /Sunscreen Lotion  Dietary Supplements  Supplements  Varicose veins treatment  Tattoo removal  Herbal supplements  Child birth classes

9. © 2007 PAYFLEX SYSTEMS USA, INC. 9 Calculating Your Contribution  Determine out-of-pocket expenses that recur every year for you and all of your dependents.  Prescriptions, over-the-counter medicines, etc.  Braces  Routine doctor visits – co-pays/non covered visits  Estimate out-of-pocket expenses that you plan to incur during the plan year (e.g., laser surgery, extra glasses, acupuncture)  Use our expense planning worksheets to assist you in determining your annual contribution (available at www.payflex.com)

10. © 2007 PAYFLEX SYSTEMS USA, INC. 10 Special IRS Plan Rules  Once you establish your plan year contribution, you may only change it if you experience a “life event” change.  Qualifying events include: marriage, divorce, and death  Any amount left in your flexible spending account at the end of the plan year will be forfeited unless employer has implemented a “grace period”.  Even if you or another family member are covered under another health insurance plan, you can still participate in the PayFlex FSA plan.

11. © 2007 PAYFLEX SYSTEMS USA, INC. 11 New IRS Ruling – Grace Period

12. © 2007 PAYFLEX SYSTEMS USA, INC. 12 What is a “grace period”?  An extra 2 ½ month period to use up your healthcare and dependent day care spending account dollars Internal Revenue & PayFlex Guidelines:  Eligible health care & dependent care expenses incurred after end of plan year, must be incurred and submitted to PayFlex by the end of the 2 ½ month period

13. © 2007 PAYFLEX SYSTEMS USA, INC. 13 FSA Educational Tools  Comprehensive participant website  Online FSA expense planning calculator and worksheets  Frequently Asked Questions  Eligible FSA expenses  Express Claims  Web-based FSA tutorial  Printable enrollment and claim forms www.payflex.com

14. © 2007 PAYFLEX SYSTEMS USA, INC. 14 www.mypayflex.com Login: New user registration & login screen Accounts: Account Summary with balances, claims history and payroll transactions Debit Cards: List of debit cards active in your account My Info: Username, password, security question & answer, email address and option for electing e-Notify to receive emails for processed claims Express Claims: To submit your claims during the plan year, print claims and instructions to fax claims. Express Claims promises 72 hour turnaround time for claims processing Education Tools: FSA Tutorial, FAQ’s to help you use PayFlex services, savings calculator, and expense planning worksheets FSA Calculator: Directs you to a site to calculate your medical care, prescriptions, dental care, eye care, and over-the-counter drugs as well as your potential savings Eligible/Ineligible Expense Items: A comprehensive list of IRS-eligible Health Care & Dependent Care expenses Forms: Administrative forms and publications and IRS forms and publications including direct deposit forms and claim forms FAQs: Includes general questions as well as questions regarding filing claims, changing your election, health care, dependent care, flex debit card and grace period.

15. © 2007 PAYFLEX SYSTEMS USA, INC. 15 FSA Education Tools  Online FSA tutorial  Expense planning tools  Enrollment & claim forms www.mypayflex.com

16. © 2007 PAYFLEX SYSTEMS USA, INC. 16 Frequently Asked Questions How does an FSA account work?  You estimate the amount you will spend on out-of-pocket health care expenses  You decide how much you wish to set aside into your FSA Health Care account  The amounts you wish to set aside into your accounts will come out of your paycheck (on a pretax basis) in equal amounts each pay period  As you incur health care expenses throughout the year, you can submit a claim form along with documentation of your expenses OR file your claims online using our Express Claims  You will be reimbursed via check or direct deposit

17. © 2007 PAYFLEX SYSTEMS USA, INC. 17 Frequently Asked Questions How much can I put into my FSA Account?  Health Care account- maximum determined by your employer  Dependent Care account- $5,000 maximum per plan year per the IRS How often can I enroll?  Annually – new employees can join off cycle How much can I expect to save with and FSA?  This depends on your tax bracket but on average about 30% of your total contribution/election.

18. © 2007 PAYFLEX SYSTEMS USA, INC. 18 Frequently Asked Questions Do I have to save and turn in my receipt?  Yes. You can file your claims via fax, mail or online through our Express Claims service. Express Claims makes it easy to submit your claim and in most cases your claims are processed within 1 to 2 days. If I don’t use the money in my account do I lose it?  Yes. You must spend all the money in your account by the end of the benefit year. However, if your employer offers a “grace period”, you will be allowed to use your FSA dollars for an additional 2 ½ months after the end of the plan year.  You will be notified in early November of any funds left in your account.

19. © 2007 PAYFLEX SYSTEMS USA, INC. 19 Dependent Care

20. © 2007 PAYFLEX SYSTEMS USA, INC. 20 Dependent Care Expenses  Expenses necessary for you and, if married, your spouse to work  Child Care or Adult Day Care Expenses  Care for children under 13 or incapable of support  Care for adult dependent incapable of self care

21. © 2007 PAYFLEX SYSTEMS USA, INC. 21 Qualifying Child Care Providers  Private Sitter  Licensed Day Care Provider  An in-home provider as long as the care provider is not your child under age 19, or someone you claim as a dependent for income tax purposes  Summer camps, except overnight camps  Tuition considered a day care expense through preschool

22. © 2007 PAYFLEX SYSTEMS USA, INC. 22 Introducing…

23. © 2007 PAYFLEX SYSTEMS USA, INC. 23 The PayFlex Debit Card The PayFlex Card is a “Debit Card” that electronically accesses your health care account to pay for IRS-QUALIFIED medical expenses.

24. © 2007 PAYFLEX SYSTEMS USA, INC. 24 Advantages of the PayFlex Debit Card  Increase your personal cash flow  Convenient & easy to use  FAST- no waiting for reimbursement  Provide documentation only as requested  Use at qualified healthcare merchants accepting MasterCard®

25. © 2007 PAYFLEX SYSTEMS USA, INC. 25 PayFlex Debit Card Reminders  Only use for IRS-eligible expenses  Keep your eligible purchases separate from other purchases made at the same store  Please save your itemized receipts! PayFlex may request documentation based on IRS guidelines  UNLIMITED USE! Use your PayFlex Card as often as you wish!  Your card does not expire until the expiration date shown on the card. PayFlex will re-load your card each year for your new election period

26. © 2007 PAYFLEX SYSTEMS USA, INC. 26 Filing Paper Claims  Complete a claim form and submit to PayFlex via mail or fax  Include itemized statement or an Explanation of Benefits (EOB) statement showing your out-of-pocket expense  File paper claims as often as you wish (Remember, claims incurred during your plan year must be filed by March 31, 2008)  Claims can be direct deposited to a checking or savings account

27. © 2007 PAYFLEX SYSTEMS USA, INC. 27 Express Claims: filing claims online  Go to www.mypayflex.com  Login with your Username & Password, if first time user, please register for an account  Once you are logged in, the Accounts screen will appear, then select Express Claims on the right side  Select the account through which you wish to file a claim  Enter your claim information: date of expense, type of expense and the amount of expense and click the Next button  Verify your claim and print your claim  Fax claim and itemized receipts to (866) WEB-CLMS Note: Itemized receipts must include date of purchase, descriptions of purchase, amount of purchase, name of merchant and if a health care claim we will also need the name of the patient.

28. © 2007 PAYFLEX SYSTEMS USA, INC. 28 Communication Services  e-Notify - provide us with your e-mail address and you will receive an electronic receipt for paper claims that you submit, letting you know we have processed it. Sign up for e-Notify at www.payflex.com!  Year-end notification- reminder to use your remaining account balance before the end of the plan year.

29. © 2007 PAYFLEX SYSTEMS USA, INC. 29 PayFlex Contact Information Please contact us with any questions! PayFlex Systems USA, Inc. 700 Blackstone Centre Omaha, NE 68131 Toll-free: (800) 284-4885 Website: www.payflex.com

30. © 2007 PAYFLEX SYSTEMS USA, INC. 30 Thank You www.payflex.com