1. Introduction & Program Overview Presented by ASIFlex

2. Two Types of Accounts: ◦ FSA  Pre-tax money for out-of-pocket medical expenses  Expenses can be for you, your spouse or any of your tax dependents (regardless of whose insurance the dependent is on) ◦ Dependent Care Assistance Program (DCAP)  Allows for reimbursement for childcare expenses  Elder care expenses also eligible

3. Most employees save at least 20% on each dollar that is contributed  For example: ◦ Federal taxes15% ◦ F.I.C.A7.65% ◦ Total22.65% x $100 = $22.65  Check out the Tax Savings Calculator at www.asiflex.com/pebb to see your expected savings www.asiflex.com/pebb

4. $200

5. Only $160

6. H EALTH C ARE S PENDING A CCOUNT Program Overview

7.  All medical expenses as defined in Section 213 of the Internal Revenue Code ◦ Insurance premiums and long term care are not eligible ◦ Detailed list of eligible expenses on www.asiflex.com  Qualifying expenses for you or your dependents whether or not on your employer’s insurance policies ◦ E.g. your spouse can be on a different employer’s insurance program and still have expenses qualify through your plan  Any medical service provided during the plan year that insurance does not reimburse

8. GlassesDental WorkLab Work X-RaysMassage Therapy & Chiropractic care Prescriptions/OTC

9. How does the program work?

10.  Enrollment must be completed during the State of Washington’s Open Enrollment Period ◦ Open enrollment ends November 30 th, 2007 ◦ Enroll online at www.asiflex.com/pebbwww.asiflex.com/pebb  Up to $2,400 per plan year per participant ◦ If your spouse works for the State of Washington, you may each set aside up to the max  Annual election amount deducted over the course of the plan year (January 1, 2008 –December 31 st, 2008)  Full Annual Election available to you January 1

11. How do I access the money?

12. 1)Submit a claim & supporting documentation & receive reimbursement Or 2)Utilize the FSA Debit card to pay for certain expenses

13. Option 1

14. 1. Write your name 2. List the services 3. Sign the form

15. 2/ 14 /0 7

16.  ASIFlex can issue direct deposits to a checking or savings account ◦ If you are already enrolled for DD, you don’t need to set this up again; it will stay the same from year-to-year  You can sign up to receive notice of reimbursements via email  Payments are issued within one business day of receipt of the claim (up to your annual election)

17. Option 2

18.  The Debit Card is optional to health care FSA users. ◦ An application for the card will come with your confirmation of enrollment packet ◦ If you had the card in 2007, you do not have to re- apply  The debit card will be issued within 10 business days of ASIFlex’s receipt of the application.  If you currently have a card, it is still valid (you do not need to re-apply)

19.  Use the debit card for out-of-pocket medical expenses only ◦ Cannot be used to pay for DCAP expenses  Card use is restricted to use at: 1) Known Health Care Providers 2) Retail outlets with an inventory control system in place

20.  Health Care Providers include: ◦ Hospitals ◦ Health clinics ◦ Opticians ◦ Dental Offices ◦ Pharmacies  Typically pharmacies within grocery stores do not meet this qualification  The card reads the Merchant Category Code (MCC) when it is swiped and the card determines if the provider has an acceptable MCC ◦ If it does not have an allowable MCC, the card will be declined

21.  The card can be used at retail outlets that do not have a health care MCC if the retail store has implemented the inventory control system  This system only allows eligible expenses to be paid for with the card ◦ E.g. if you attempt to purchase a six pack of cola and a bottle of aspirin, the card will pay for the aspirin and then you will have to provide a separate form of payment for the cola ◦ No documentation required for purchases at these stores

22.  Currently in place at: ◦ Wal-Mart Stores ◦ Sam’s Club ◦ Walgreens ◦ Drugstore.com  Many more anticipated as of 1/1/08 ◦ Safeway ◦ CVS ◦ Jewel/Osco ◦ Target

23.  Every debit card transaction will have to be substantiated somehow, either electronically or with a paper claim  Electronic substantiation ◦ Known co-pays ◦ Multiples of up to five known co-pays  Purchases made at retail outlets with inventory control system  Paper claims must be submitted for all other transactions

25.  ASIFlex will administer the DCAP for services provided from 1/1/08 forward  All claims for services provided in 2007 must be submitted to DRS ◦ If you submit claims for services in 2007 to ASIFlex, they will be returned to you unpaid

26.  Provides a tax break on child/elder care expenses incurred while: ◦ You go to work Or ◦ You and your spouse (if married) go to work Or ◦ You go to work and your spouse:  Looks for work  Pursues an educational opportunity  Other expenses are not eligible. ◦ i.e. getting a babysitter for Friday night date night is not an eligible expense

27.  Children under the age of 13*  Older dependents unable to care for themselves who live in your home at least 8 hours per day * Must be custodial parent with over 50% custody if divorced.

28.  Day care services  General purpose day camps  Babysitters  Pre-school

29.  Costs of food and transportation if itemized  Educational expenses ◦ Includes private schools  Overnight camps  Payments to your spouse or any other dependent of yours  Payments to your child under 19, even if he/she is not your dependent

30. How does the program work?

31.  Family maximum of $5,000/year ◦ This is an IRS maximum per household  Example: $2,600 for the plan year contributed each paycheck for 26 checks = $100.00 per check

32. How do I access the money?

33. 1. Write your name 2. List the services 4. Sign the form 3. Have the provider sign the form

34. April 1 to April 30, 2007

35.  Deposit directly into your bank account  Receive notice of deposit via email  Payments are made within one business day of receipt

36.  Funds in one category cannot apply to expenses in another category.  Expenses for services provided during the plan year and the additional 2 1/2 month grace period.  Unused funds will go back to your employer. ◦ Use it or lose it ◦ Start small if you are unsure of how much you will actually spend

37.  2008 Plan year is 1/1/2008 - 12/31/2008  Expenses for services provided 1/1/2009 – 3/15/2009 can be used to claim 2008 Plan Year funds ◦ Grace period provides extra time to incur expenses if you set aside too much money  When filing a claim with ASIFlex, expenses will be automatically applied to old year first, unless the participant requests otherwise ◦ Reversals between plan years are allowed later, but a written request must be provided by the participant before the claims filing deadline

38.  Online through ASIFlex’s website ◦ www.asiflex.com/pebb www.asiflex.com/pebb ◦ Select “Enrollment”  Or you can submit a paper enrollment form to ASIFlex  All enrollments must be completed by November 30 th  You must re-enroll, even if you don’t want your deduction amount to change

39. www.asiflex.com/pebbEmail asi@asiflex.comCall (800) 659-3035

40. Questions?