Flexible Spending Accounts (FSA) are employer-sponsored benefits that allow you

to set aside a portion of your salary, before taxes, to pay for qualified health care

and dependent care (day care) expenses. Because that portion of your income is

not taxed, you end up with more money in your pocket. The end result is that you

decrease your taxable income and increase your spendable income. If you expect

to have health care and dependent care (day care) expenses that won’t be paid

by any other insurance, you should take advantage of your employer’s Health

Care Spending Account (FSA) and/or Dependent Care Spending Account (DCA).

The average person will save 30% on the cost of eligible expenses already in-

curred. You do not have to be enrolled in your company insurance plan to be eli-

gible to participate in a FSA.

You can enroll even if you receive insur-

ance coverage through your spouse’s em-

ployer.

Essential health care expenses for you and your dependents

not paid by any other insurance are reimbursable through a

Health Care Spending Account. The benefit covers qualified

expenses that you, your spouse, and your dependents in-

cur. Dependent children are covered up to age 26 regard-

less of their tax dependent or full-time student status. For

purposes of the Health Care Spending Account, a dependent

child may be married and live separately from the ac-

countholder. Note, dependents of your dependent child

(including their spouse) are not covered unless these indi-

viduals are being claimed as your tax dependent. Typical

qualified expenses include medical and prescription co-

payments and deductible expenses, vision care expenses,

eligible dental care expenses (cosmetic dentistry not eligi-

ble), and over-the-counter medicines and products. Over-

the-counter medicines and products are reimbursable when

the product is used for medical purposes. Eligible expenses

include medicines or products that alleviate or treat injuries or illness. Over-the-counter

medicines or products that merely benefit your general health are not reimbursable with-

out a letter of medical necessity. Examples of products that require a physician’s pre-

scription or letter of medical necessity include: pain relievers, cough medicine, allergy

medicine, vitamins, minerals, and calcium. [Reference the FSA Expense Guide for more

information.]

The Health Care Spending Account is pre-funded, allowing participants access to funds up

to their annual election amount from the first day of the plan year.

Day care expenses for children through age 12 or for dependents of any age who are

physically or mentally unable to care for themselves are reimbursable through a Depend-

ent Care Spending Account. There are two requirements for eligible dependent care ex-

penses to qualify. First, it is necessary for both you and your spouse to work in order to

remain eligible for reimbursement from the Dependent Care Account. Second, the total

amount of expenses to be reimbursed through the account cannot be greater than your

income or your spouse’s income, whichever is lower.

The maximum yearly deposit amount is

$5,000; this exceeds the Federal Tax Cred-

it for one child. If you are married and file

a separate return, the maximum election is

$2,500.

The DCA is not pre-funded; you will only

receive reimbursement for dependent care

expenses up to the amount contributed to

date. [Reference the DCA Expense Guide

for more information.]

When you participate in a Health Care FSA, you elect

to have a specific dollar amount deducted from your

gross (before tax) salary each pay period. [This low-

ers your taxable income. That means you also in-

crease your take home pay, or spendable income!]

Let’s look at an example: John Smith earns $30,000

per year and pays 30% for federal, state, and FICA

taxes. He spends $1,500 per year in health care ex-

penses for deductibles, eyeglasses, and dental visits

Salary and Expenses Without FSA With FSA

Gross Annual Salary $30,000 $30,000

Pre-Tax Health Expenses - $1,500

Taxable Income $30,000 $28,500

Income Taxes at 30% - $9,000 - $8,550

After-Tax Health Expenses - $1,500

Actual Take Home Income $19,500 $19,950

TOTAL SAVINGS = $450

Accessing Your

Account Online

The CareFlex Participant Portal and

CareFlex Mobile App put account

information at your fingertips 24/7.

Online account features:

• Access account balances.

• View payment card charges.

• Enter a new claim.

• View claims and claims status.

• Access communication center

messages.

• Find answers to frequently asked

questions.

• Find account forms and docu-

ments.

Quick Facts:

• Your entire FSA

Health Care election is

available to you on the first day of

the plan year!

• FSA expenses can be for you and

your tax dependents, regardless

of whose insurance covers an indi-

vidual.

• It isn’t just deductible and copay

expenses that are covered under

an FSA … eligible expenses include

non-cosmetic dental work, eye-

glasses, and alternative care (such

as acupuncture and chiropractic

services).

• Your DCA election is available as

funds accumulate in your account.

• DCA expenses can be for your de-

pendents under the age of 13 or

over 13 if mentally or physically

unable to care for himself/herself.

• Easy to manage. You will need to

keep track of your paperwork, but

the CareFlex Participant Portal

makes managing your account

easy. Eligible Expenses Include:

✓ Dependent care center; must comply with state and

local laws (applicable if more than 6 persons are

cared for).

✓ Services of other providers of care outside the home

(i.e., neighbors, your parents).

✓ Services of a child or dependent care provider who

comes to your home.

✓ Relatives who provide care (except someone who

can be claimed as a dependent or who is a child un-

der the age of 19).

Eligible Children or Other Dependents Include:

✓ Any child under age 13 who can be claimed as a de-

pendent on your Income Tax Return.

✓ Your spouse or any dependent over 13 who is phys-

ically or mentally unable to care for himself or her-

self.

✓ Anyone who is physically or mentally unable to care

for himself or herself for whom you contribute more

than half of their support.

Over-the-counter (OTC) drugs and medicines (other than insulin) re-

quire a physician’s prescription or OTC Prescription form to qualify as

an eligible medical expense under a Health Care Spending Account.

This provision impacts how we pay for these qualified expenses.

CareFlex Benefits Card—Pharmacies and drug stores that are cer-

tified as a 90% merchant (over 90% of sales are for qualified health care expenses) will con-

tinue to accept health benefit cards; however, a physician’s prescription or OTC Prescription

form will be required to be submitted to CareFlex to substantiate the expense. Pharmacies

that have an Inventory Information Approval System (IIAS) may accept health benefit cards

to purchase OTC medicines provided that a physician’s prescription is presented to the phar-

macist, the pharmacist dispenses the drug in accordance with applicable law, an RX number

is assigned, the pharmacist retains certain records and the records are accessible by the em-

ployer’s plan or its agent.

If a pharmacy will not fill the OTC medicine as a RX, you will not be able to use a health ben-

efit card and will have to pay with another form of payment and submit a claim to receive

reimbursement from your account. Submitted claims must include a completed claim form,

an itemized receipt and a physician’s prescription or completed OTC Prescription form. An ad-

equate itemized receipt contains the name of the product, the date, and the amount paid. A

physician’s prescription must include: the date prescribed, name of patient, name of the OTC

medicine, and the physician’s address and license number. A physician’s prescription or OTC

Prescription form will stay on file at CareFlex for the duration of a plan year.

Over-The-Counter Products—OTC products that are not medicines but used for medical

purposes (reference the FSA Expense Guide for more information) are reim-

bursable without a prescription under a Health Care Spending Account.

Health benefit cards can be used to pay for eligible OTC products at mer-

chants that have an Inventory Information Approval System (IIAS) or are

certified as a 90% merchant. Purchases made at 90% certified merchants

will require an itemized receipt to be submitted to CareFlex to substantiate

the expense. If not paid with a health benefit card, you can submit a claim to

CareFlex for reimbursement from your account. Submitted claims must in-

clude a completed Reimbursement Request form and an itemized receipt. An

adequate itemized receipt contains the date, the name of the product, and the amount paid. If

your receipt does not include this information, you will need to copy the label from the product

or its packaging, circle the correct amount on your receipt, and submit with your completed

Reimbursement Request form.

Dual-Purpose Products—Certain OTC products are considered dual-purpose, such as vita-

mins and supplements. This is because for some individuals the product is used to alleviate a

medical condition, while others use the product for general health and well-being. These dual

-purpose products may be eligible for reimbursement, but require a Medical Necessity form

stating your specific diagnosis or medical condition, a recommendation to take the specific

OTC medicine to treat your condition, and documentation of the product and cost. Please

note: submitting a Medical Necessity form with your claim does not guarantee that the ex-

pense will be approved.

Excluded Items—OTC products that are not medicines or merely benefit your general health

are not reimbursable without a Medical Necessity form.

An OTC Prescription/Medical Necessity Form can be downloaded from the CareFlex website

www.careflex.com. A Pharmacy Locator can also be accessed from the website.

All enrollees will receive a

CareFlex Benefits Card to

access funds. The full elec-

tion amount is available on

the card on the first day of

the plan year to pay eligi-

ble expenses.

The card swipe process

works like any MasterCard® transaction, but will only

work to transfer funds for properly coded transactions.

Transactions at merchants not providing authorized ser-

vices will be denied. Transactions that exceed your annu-

al election amount will also be denied. The CareFlex Ben-

efits Card is valid for a three-year period, allowing next

plan year’s election to be loaded on the card.

Your card is programmed to work only at pharmacies,

discount stores, and grocery stores that submit a health

care transaction total to CareFlex. To locate certified

merchants, use the Pharmacy Locator provided on our

website: www.careflex.com. Remember to save your

itemized receipts! At times documentation is requested

to verify purchases. Keeping itemized receipts on file

makes it easier when the time comes.

Medical Services—When you pay for health care, be

sure to always present your health insurance ID card first

to ensure proper processing of your services.

• Copays: If you are asked to pay a copay, you may pay

with the CareFlex Benefits Card, or you may pay out of

pocket and request reimbursement from your account.

Save your itemized receipt to submit as documentation.

• Additional Charges: If you’re asked to pay additional

charges, do not pay your provider until the claim is pro-

cessed by your health insurance plan and you receive

your Explanation of Benefits (EOB). This helps avoid

overpayment. Compare your EOB with the provider bill

to verify the amount being charged by your provider is

the same as the patient balance on the EOB. Then, pay

with your CareFlex Benefits Card, or pay out of pocket

and request reimbursement from your account.

The Pharmacy—When purchasing prescriptions, be sure

to always present your health insurance ID card first to

ensure proper processing of your charges. You may pay

with your CareFlex Benefits Card, or pay out of pocket

and request reimbursement from your account. Save

your itemized receipts to submit as documentation.

•

•

•

•

IIAS (Inventory Infor-

mation Approval Sys-

tem): technology used

by retailers to ensure

benefit card transactions are eligi-

ble health expenses. Every item in

the store's scanner database is

flagged for plan eligibility. Note:

no documentation will be required

for verification of expenses pur-

chased at a merchant with IIAS.

90% Rule: certifies at least 90%

of gross sales in the prior tax year

were for eligible health expenses.

Note: you will be required to sub-

mit documentation to verify ex-

penses purchased at a merchant

who is 90% certified.

Settling Outstanding Previous Plan Year Expenses

Your benefit card will only recognize new plan year funds. Once the new plan

year begins, do not use your benefit card to pay for dates of service incurred in

the previous plan year. If you receive an invoice during the new plan year for

dates of service in the previous plan year, pay with another form of payment and

submit a manual claim to CareFlex for reimbursement from previous plan year

funds. NOTE: All reimbursement requests received after the run out period will

be denied.

Changing an Election – The elections you make at the be-

ginning of the plan year will remain in effect until the end of

the plan year. Changes to elections are only permitted if

your family status changes. A change in family status is

generally defined as a birth, adoption, or death of a depend-

ent; marriage or divorce; or if you or your spouse experience

a change in employment. Acceptable changes in status for a

Dependent Care Spending Account include a change in the child care/elder care provider

or a significant change in the cost of coverage, such as a cost increase charged by your

current daycare provider. A change in status allows a participant to increase or decrease

an election amount consistent with the event. Changes to an election must be made

within 30 days of the date of the status change. CareFlex will verify that your event qual-

ifies, requesting additional documentation if necessary.

The IRS allows pre-tax contributions as long as benefits do not favor highly compensated

employees. Testing will be completed following the open enrollment period to verify ben-

efits do not disproportionately favor highly compensated employees. Participants will be

notified if elections require a change.

Run-Out Period – The Run-Out Period allows additional time after the last day of the

plan year to submit manual claims for dates of service incurred during the plan year. Plan

year funds are no longer available on the CareFlex Benefits Card after the last day of the

plan year. The Run-Out Period allows time for participants to submit expenses to be

manually reimbursed from available funds remaining in the plan year. [Reference your

Plan Design communication for the run-out period timeframe.]

Unused Account Balance – Any funds remaining after the conclusion of the plan year,

including the run-out period, will be forfeited. The plan does not allow for the payment of

late claims or the return of unused funds. Review your employer’s plan design to deter-

mine time frames for submitting claims after the end of the plan year or after you termi-

nate employment/coverage.

Access your

account online!

• Go to

www.mywealthcareonine.

com/careflex/.

• Sign in with your Username

and Password.

• If it is your first time visiting

the site, select Register in

the top right of the page to

create access.

• Instructions for creating

online access can be down-

loaded from the CareFlex

website

www.careflex.com.

We make it easy to access and use your funds. There

are two ways to pay for eligible expenses:

1. Use Your CareFlex Benefits Card—This is the sim-

plest way to pay for eligible expenses! Pay using

your CareFlex Benefits Card and keep your item-

ized receipts and statements as documentation.

2. Pay Out of Pocket and Request Reimbursement:

▪ Pay using your own personal credit card, cash, or

check and keep your itemized receipts and state-

ments as documentation.

▪ Then, log on to your online account to file for re-

imbursement. Upload documentation to your

online claim or print the claim submission form

and email or fax documentation.

▪ Or, you can email, fax, or mail a reimbursement

request form with documentation to CareFlex.

Appropriate documentation for Health Care expenses

includes: a prescription label, an itemized receipt

(must include the provider name, date and descrip-

tion of expense), an itemized statement (must in-

clude the provider name/address, patient name, date

of service, description of service, and patient respon-

sibility), or a medical insurance Explanation of Bene-

fits (EOB). NOTE: Cancelled checks, credit card

receipts and/or non-itemized receipts are not

acceptable proof of services.

The same rules apply for Dependent Care expenses.

However, the Reimbursement Request Form can act

as a receipt from the provider when the provider

completes, signs, and dates the form. If there is not

a provider signature, you must submit a detailed pro-

vider invoice or statement. [Note: Provider Tax ID or

Social Security Number required.] If your dependent

will be in the same day care for the entire plan year,

a Dependent Care Provider Form can be completed

and signed by the provider and submitted to Care-

Flex. Participants are responsible for notifying Care-

Flex if a change is made to the dependent care pro-

vider.

CareFlex sends email notifications to participants who

have provided their email address. For online claims,

a notification will be sent once you file a claim notify-

ing you that the claim has been received. Another

email will be sent once your claim has been reviewed

and processed. For paper reimbursement requests,

an email will be sent once the claim has been entered

in our system. Participants can track their claims

through the CareFlex Participant Portal.

205 West Dares Beach Road, Prince Frederick, MD 20678

Toll Free Phone (888) 577-2762 / Fax (410) 414-8432 / support@careflex.com

For additional information, please contact

How do I keep track of my

account balance?

You can track your account online

through the CareFlex Participant Portal

www.mywealthcareonline.com/

careflex/. Instructions for creating

online access can be downloaded from

the CareFlex website

www.careflex.com.

What is the CareFlex Benefits Card?

The CareFlex Benefits Card is a stored value card that uses funds directly from your Flex-

ible Spending Account. Your benefit card is activated upon its initial use for eligible ex-

penses. Present your card to pay for services to providers accepting credit cards. The

benefit card is a signature based debit card and can be used as a credit card or debit

card. There is a PIN number associated with the card that can be accessed through the

CareFlex Participant Portal. The card swipe process works like any MasterCard® transac-

tion, but will only work to transfer funds for properly coded transactions.

Can I order a benefit card for a dependent?

It is not necessary to have a benefit card for dependents, but sometimes useful for

spouses or dependents away from home. To order a benefit card for an eligible depend-

ent, please complete an Additional Card Request Form (form can be downloaded from the

CareFlex website www.careflex.com). The completed and signed form can be emailed,

faxed, or mailed to CareFlex.

How to plan an election?

Calculate the total dollar amount you expect to spend on health care expenses and de-

pendent care expenses (if applicable) over the course of the plan year. [A simple work-

sheet can be downloaded from the CareFlex website www.careflex.com to assist you in

this process.] Once you have determined your annual expenses, divide that amount by

the number of times you are paid in a year. The same amount will then be deducted from

your paycheck on a pre-tax basis each pay period.

Who is the Plan Administrator?

Plans are administered by CareFlex LLC, an administrative services company. CareFlex

manages the plans and issues the CareFlex Benefits Card. CareFlex conducts audits on

purchases made with the card and will request documentation as needed to maintain

compliance with plan rules.