FSAFEDS

1. FSAFEDS THE FEDERAL FLEXIBLE SPENDING ACCOUNT PROGRAM MORE MONEY IN YOUR POCKET!

2. Program Overview THAT’S MORE MONEY IN MY POCKET!

3. What is a FlexibleSpending Account? • An account where you contribute money from salary BEFORE taxes are withheld • A way to save money on day care and health care services and items for you and your family • A Fed-friendly tax break • Key Benefit: More Money in Your Pocket!

4. How does FSAFEDS work? • Estimate your expenses and determine your annual contribution from salary, pre-tax • Enroll in a Health Care, Limited Expense Health Care or Dependent Care FSA • Incur eligible expenses • Submit your claims* • Get reimbursed FAST *A few exceptions, discussed later

5. How do you save money with FSAFEDS? • Your contributions to FSAFEDS are deducted from your salary BEFORE taxes…just like Thrift Savings Plan contributions. • You’re going to have these expenses, so why pay more in taxes than you have to? • The average person will save about 30% each year • A Fed earning $50,000 and contributing $2,000 to an FSAFEDS account will have around $600 more to spend • PUTS MORE MONEY IN YOUR POCKET!

6. Savings Illustration

7. Three types of FSAs 1. Health Care FSA (HCFSA) - For eligiblehealth care expenses not paid by FEHB, FEDVIP or any other insurance $250 minimum election per year $2,500 maximum election per year – this IS NOT a household limit, your spouse may have a separate account

8. Three types of FSAs (cont.) 2. Limited Expense Health Care FSA* (LEX HCFSA) - For those enrolled in or covered by a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) *Limited to only eligible dental and vision expenses not paid by FEHB, FEDVIP or any other insurance $250 minimum election per year $2,500 maximum election per year – this IS NOT a household limit, your spouse may have a separate account

9. Three types of FSAs (cont.) 3. Dependent Care FSA (DCFSA) - For eligible non-medical day care expenses (childcare, eldercare) so you (or your spouse) can work, look for work or attend school full-time. $250 minimum election per year $5,000 maximum election per year – this IS a household limit and includes any child care subsidy amounts and other FSA dependent care accounts Note: You (and spouse) must have earned income during the year, even if looking for a job.

10. Eligibility for FSAFEDS • Must be employed by an Executive Branch Agency or another organization offering FSAFEDS

11. Eligibility for FSAFEDS (cont.) • HCFSA • Must be FEHB eligible • Participants do not have to be enrolled in FEHB

12. Eligibility for FSAFEDS (cont.) • LEX HCFSA • Must be enrolled in or covered by an HDHP with an HSA under the FEHB

13. Eligibility for FSAFEDS (cont.) • DCFSA • Do not need to be FEHB-eligible or enrolled in FEHB • Ineligible: intermittent employees expected to work fewer than 180 days/year

14. Administrative Fees • All agencies pay the fees for their employees • Employees do not pay fees to participate PUTS EVEN MORE MONEY IN YOUR POCKET!

15. Eligible Expenses USING FSAFEDS IS EASY AS PIE

16. HCFSA Eligible Expenses • Health care expenses not paid by FEHB or FEDVIP or any other insurance Expenses incurred by you and/or your dependents are eligible

17. Typical HCFSA Expenses • Co-payments, co-insurance and deductibles (but not insurancepremiums) • Chiropractic care • Contact lenses, solutions, cleaners and cases • Dental care (Including crowns, endodontic services, implants, oral surgery, periodontal services, sealants, etc.) • Diabetic supplies • First aid kits

18. Typical HCFSA Expenses (cont.) • Flu shots • Foot care (e.g., athlete’s foot products, arch supports, callous removers, etc.) • Hearing aids (including batteries) • Home diagnostic test and kits (e.g., cholesterol, colorectal screenings, etc.) • Home medical equipment (wheelchairs *, oxygen, respirators, etc.) • Orthodontia *With Letter of Medical Necessity

19. Typical HCFSA Expenses (cont.) • Over-the-counter non-medical items, such as, but not limited to band aids, braces & supports and reading glasses • Over-the-counter drugs and medicines WITH a prescription – insulin is the exception • Physical therapy • Prescription drugs • Prosthetics • Psychiatric services and care

20. Typical HCFSA Expenses (cont.) • Substance abuse treatment • Transportation expenses related to medical care • Vision care (including eyeglasses, prescription sunglasses, refractions and vision correction procedures) For a complete list of eligible expenses, go to www.FSAFEDS.com and click on “Eligible Expenses Juke Box” under the “Quick Links” drop-down menu

21. Ineligible HCFSA Expenses • Day care expenses • Cosmetic procedures (unless required to restore appearance or function due to disease of illness) • Expenses you claim on your tax income return • Expenses reimbursed by other sources, such as insurance • Fitness programs (unless medically necessary*) *With Letter of Medical Necessity

22. Ineligible HCFSA Expenses (cont.) • Hair transplants • Insurance premiums, including COBRA, Tricare, dental, vision and long term care insurance • Over-the-counter drugs and medicines (except insulin) unless prescribed by a physician • Physician retainer fees including boutique and concierge practice membership fees • Weight loss programs and drugs for general well-being • Expenses incurred after March 15, 2015

23. LEX HCFSA Eligible Expenses • ONLY Dental and Vision expenses • Not paid by FEHB, FEDVIP or other insurance • Expenses incurred by you and/or your dependents including: • Dental – cleanings, fillings, crowns, orthodontics and over-the-counter items such as denture care products, but not toothpaste • Vision – eyeglasses, refractions, vision correction procedures, contact lenses, solutions, cleaners and cases

24. DCFSA Eligible Expenses • Day care expenses that let you (and your spouse): • Work • Look for work • Attend school full-time • For children under age 13 and any dependent who is mentally or physically incapable of self-care • Services cannot be provided by your dependent • If you or a spouse have looked for work, you must have found a job and have earned income at some point during the year. If a spouse is a full-time student or incapacitated, he or she does not to have any earned income during the year.

25. Typical DCFSA Expenses • Child care at a daycare center, day camp, sports camp, nursery school or by a private sitter • Late pick-up fees • Before and after-school care (but not tuition) • Adult day care expenses • Au Pair placement fees and weekly stipend • Expenses for a housekeeper who also cares for an eligible dependent

26. Ineligible DCFSA Expenses • Health care expenses • Education or tuition fees • Late payment fees • Overnight camps • Sports lessons, field trips, clothing • Transportation to/from care provider • Expenses incurred after March 15, 2015

27. Benefit Period • Employees must enroll each Open Season to participate in the following benefit period • Enrollments do not carry over year-to-year • Benefit Period = January 1 through March 15 (of the next year) • Salary contribution deducted equally among pay dates during the calendar year (January 1 – December 31)

28. Online Calculator • Interactive savings calculator available online at www.FSAFEDS.com • Enter salary and tax information • Enter FSAFEDS contribution amount • Enter estimated expenses • Calculate potential annual tax savings

29. Payroll Deduction Process • Employee identifies employing agency during enrollment • FSAFEDS submits enrollment information to BENEFEDS • BENEFEDS coordinates payroll deductions with your payroll provider • BENEFEDS provides FSAFEDS with confirmed allotment information. FSAFEDS updates participant accounts.

30. Availability of Funds • DCFSA: only amount of currentaccount balance is available for claim reimbursement • HCFSA & LEX HCFSA: total annual election is available once agency information is confirmed

31. “Use-or-Lose” Rule • You must forfeit money unspent at the end of the Benefit Period (March 15th) • IRS Rule (Section 125 of IRS Code) • No exceptions • You must file claims by April 30th following the end of the Benefit Period • Plancarefully when making elections

32. Extra 2 ½ Months • If you enroll during Open Season, you have from January 1 to March 15 of the next year to incur eligible expenses • 14 ½ months to spend your annual election • You forfeit any FSA money not spent on eligible expenses by March 15, 2015 • You have until April 30, 2015 to file claims

33. Tracking Account Balances • Secure online account access via My Account Summary www.FSAFEDS.com • Call toll-free 1-877-FSAFEDS (372-3337) TTY line: 1-800-952-0450 • Reimbursement Statement sent when claims processed • Account Statements sent in January, March and October

34. Federal Benefits Open Season EnrollNovember 11 – December 9, 2013Enroll early to avoid the last minute rush! THAT’S MORE MONEY IN MY POCKET!

35. Enroll Online • Go to www.FSAFEDS.com • Follow the simple enrollment process • Receive personalized confirmation • Will appear at the end of the enrollment process • Will automatically be emailed to you if you provide an email address during enrollment • Will be available via My Account Summary

36. Enroll By Telephone • FSAFEDS Benefits Counselors • Toll-free 1-877-FSAFEDS (372-3337) • TTY line: 1-800-952-0450 • Monday – Friday, 9:00 a.m. – 9:00 p.m. ET

37. Enrollment Requirements • Must meet eligibility requirements for FSAFEDS participation • Must agree to Electronic Funds Transfer (EFT) • Fast reimbursement

38. Enrollment Options – HCFSA Only • Paperless Reimbursement (PR) • Available with many (not all) FEHB plans • Claim filed with FEHB plan • FEHB plan forwards out-of-pocket expenses directly to FSAFEDS • Often no out-of-pocket payment • Payment made directly to youfrom FSAFEDS account via Electronic Funds Transfer • Some dental and vision claims require manual submission – please check the website

39. PR - Participating Plans • Aetna Medical Plan • APWU Health Plan • Blue Cross and Blue Shield Service Benefit Plan • Compass Rose Health Plan (formerly ABP) • Foreign Service Benefit Plan • GEHA • Humana • Mail Handlers Benefit Plan

40. PR - Participating Plans (cont.) • M.D. Individual Practice Association Inc. • NALC Health Benefit Plan • SAMBA Health Benefit Plan • UnitedHealthcare Insurance Co., Inc.

41. PR - Participating Plans (cont.) FEDVIP Plans • Aetna (Dental) • GEHA (Dental) • United Concordia (Dental) • FEP Blue Vision (Vision) • Vision Service Plan (Vision)

42. New Employee Enrollment • New employees have 60 days to enroll • Must enroll before October 1 • Otherwise, must wait for next Federal Benefits Open Season

43. Enrollment Changes • May change election(s) at any time during Open Season • Qualifying Life Event (QLE) required outside Open Season

44. Qualifying Life Event • QLEs defined by IRS: • Change in marital status • Change in number of dependents • Change in dependents’ eligibility (e.g., child turning age 13) • Change in cost or coverage (DCFSA only) (e.g., day care fee increase) • Change in employment or residence • Change in military duty status

45. Qualifying Life Event (cont.) • Requested change must be consistent with event that prompts change • For example: • Increase DCFSA or HCFSA election after birth or adoption of child • Decrease DCFSA election if spouse stays home with child

46. Qualifying Life Event (cont.) • Must notify FSAFEDS of QLE from 31 days before to 60 days after event • To submit a request online, login to “My Account Summary” and access the “Qualifying Life Event” section. • Follow the simple instructions to submit your request online • If you prefer to print a QLE form and save a copy for your records, the QLE form is still available under “Forms” at www.FSAFEDS.com

47. Qualifying Life Event (cont.) • Fax or mail your form to FSAFEDS • You may submit your request either online or by form, but you may not do BOTH • FSAFEDS will verify that event was a QLE and process requested election change • QLE for birth/adoption of child is retroactive to date of event; all others are prospective • Can only reduce elections to the amount already on deposit or reimbursed

48. Separation/Retirement • No further allotments • DCFSA balance, at separation, is available for eligible expenses incurred until end of Benefit Period or until balance is depleted • No refund available • HCFSA terminates at separation • Only expenses incurred before separation are eligible for reimbursement • No refund available

49. Leave Without Pay (LWOP) • Agencies will not withhold allotments during non-pay status • Options: • Pre-pay elections through accelerated allotments • Freeze account until return to pay status (Allotments recalculated across remaining pay dates) • If LWOP is due to a QLE, participant can cancel or reduce annual election, if consistent with the QLE

50. Claims & Reimbursement USING FSAFEDS IS EASY AS PIE