TaxSaverPlan

Taxsaver Plan Definitions:

This list of definitions is intended to help you understand your Flexible Spending Account.

1. FSA: This is a shortened term for a Flexible Spending Account. Flexible Spending Accounts allow you to use pre-tax dollars that you elect to set aside in an account to reimburse yourself for qualified out of pocket expenses. The FSA account may be funded solely with participant dollars or the Employer may contribute dollars to the FSA accounts or there may be a combination of both participant and Employer dollars. There are 2 types of FSA accounts and both accounts have a Use-It-Or-Lose it provision.

2. Health Care Reimbursement Account: This is a FSA for eligible out of pocket health, dental, vision, prescription and over the counter expenses defined as "eligible" under your Employer’s Plan. This is often referred to as a Health FSA.

3. Dependent Care Reimbursement Account: This is a FSA for eligible day care expenses paid so that you and your spouse can provide care for your eligible tax dependents (Qualified Dependents) while you are at work.

4. Health Reimbursement Arrangement (HRA): A HRA should not be confused with a FSA. A HRA is strictly funded with Employer dollars and it is offered in conjunction with a HDHP – High Deductible Health Plan. There may also be a carryover provision under a HRA.

5. Health Savings Account (HSA): A HSA is different from a HRA in that the account can be funded with employee dollars or employer dollars or a combination of both. A HSA is operated by a trust and there is no requirement to substantiate the expense when a withdrawal is made. Dollars may be carried over from year to year, and unlike a HRA, the account is portable, so you may take it with you if you were to leave your Employer. These accounts are also offered in conjunction with a HDHP and if you are a participant in a HSA, your eligibility for other benefits, like a FSA, may be limited.

6. Qualified Dependent: A Qualified Dependent is an individual who satisfies the requirements defined by the IRS in Code Section 152 as a qualified child or qualified relative of the participant in the Plan. If your dependent does not qualify as a qualified child or a qualified dependent, their expenses will not be reimbursable under the FSA Plan.

7. Plan Year: A Plan Year is designated by your Employer. The Plan Year determines when expenses may be incurred for reimbursement. A Plan Year is never more than 12 months long, but it can be less if your Employer offers a Short Plan Year.

8. Incur: This term is used to determine when expenses are eligible for reimbursement. The incur date is the service rendered date, not the date that the bill is paid or the date that the provider charges you for the service. The service rendered date must fall within the Plan Year (some exceptions may apply – see item 26).

9. Eligible Expense: An eligible expense is an expense that has been defined as reimbursable by the IRS under the Plan. A list of eligible expenses can be found on the Taxsaver Plan website. Please do not refer to Publication 502 as a guide, as many expenses that can be deducted on your tax return do not qualify for the FSA Plan. In general, eligible expenses consist of services and items that are used to prevent or alleviate a disease, condition or malfunction of the body.

10. Open Enrollment: Open Enrollment is the period of time that is designated by your Employer as the time to elect your benefits for the following Plan Year. This is the only time of year when you may elect to make a change to any of your pre-tax benefits without experiencing a qualified Change In Status.

11. Change In Status: A Change In Status is a qualified event, as defined by the IRS that would allow a participant to make a change to their pre-tax elections once the Plan Year has begun. For all intents and purposes, once you have made your election and the Plan Year has started, you are locked into that election for the length of the Plan Year. A qualified Change In Status, if recognized by your Employer’s Plan, may allow you some flexibility in changing your current election mid Plan Year. This may involve revoking, increasing or decreasing the election. A Change In Status will result in an election change only when the change directly affects the eligibility of the current coverage and when the change is consistent with the Change In Status.

12. Claim Form: A Claim Form is a signed form that should accompany your receipts for reimbursement. Without a signed Claim Form, Taxsaver Plan cannot accept the claim for processing. Claim Forms are available on our website. If you are submitting a receipt to substantiate a FSA debit card expense, you are not required to complete a claim form, but you should always include something that identifies you and your Employer. Please do not submit a receipt by itself.

13. Receipt: Receipts are required to substantiate the FSA expenses. A receipt is defined as a statement from a third party provider that includes the date the service is rendered, the type of service rendered or the items purchased and the amount owed to the provider. Receipts should also include the provider information. For dependent care receipts from an individual provider, the signature of the day care provider should always be included.

14. FSA Debit Card: A FSA Debit Card is provided to participants by the Employer. Not all Employers offer this card. A FSA Debit Card is a credit card – Mastercard – that is accepted at eligible providers as determined by the Plan. Mastercard assigns the provider a merchant code that determines whether the card is accepted or denied at the point of sale.

15. Merchant Code: A merchant code is a 4 digit number that is assigned by Mastercard to any vendor that accepts Mastercard. For a listing of merchant codes that are allowed under a FSA Plan, please refer to the Debit Card page on Taxsaver Plan’s website.

16. IIAS: IIAS stands for Inventory Information Approval System. IIAS' are found in pharmacies, grocery stores, retail stores and discount stores that sell FSA eligible items, like prescriptions and over the counter items. Items are pre-determined to be FSA eligible by Sigis, an organization of professionals in the healthcare and payment industry. When the item is scanned at the register, the SKU code is recognized as an FSA eligible item and the FSA Debit Card will accept the item. No receipt documentation is required after-the- fact.

17. Receipt Notification: A receipt notification is a notice sent by Taxsaver Plan after a FSA debit card has been used at an eligible provider. The IRS requires that FSA debit card swipes be substantiated when the swipe does not match the co-pay for that service under the Employer’s health plan. A receipt notification is sent via email or mail, depending on your Employer. You are given a 35 day window of time to submit your receipts.

18. Recurring Charge: A recurring charge is defined as a charge seen on the FSA Debit Card from the same vendor in the same amount. A recurring charge can only be determined to be recurring after the charge has been paid for with the FSA Debit Card two (2) times.

19. A Completed FSA Debit Card Transaction: If you view your account on the Taxsaver Plan website, the FSA Debit Card transactions are listed at the bottom of the screen. If the transaction shows to be completed, this means that Taxsaver Plan is not in need of a receipt for that expense or you have submitted the requested receipt at that time.

20. A Pending FSA Debit Card Transaction: If you view your account on the Taxsaver Plan website, the FSA Debit Card transactions are listed at the bottom of the screen. If the transaction shows to be pending, this means that Taxsaver Plan is in need of a receipt for that expense. If you have submitted the requested receipt, please contact Taxsaver Plan to verify that the receipt was received and that we were able to
process it.

21. Account Balance: An account balance available in your account is the dollars remaining in the Health FSA. This amount is derived by taking the total annual election and subtracting the total dollars distributed from the Plan for eligible expenses submitted for reimbursement.

22. Cash Balance: The cash balance available in your account is the cash remaining in the FSA account. This amount is derived by taking the dollars that you have contributed to the Plan and subtracting the total dollars distributed from the Plan for eligible expenses submitted for reimbursement. Please note that it is possible to show a negative cash balance in the Health FSA at anytime during the Plan Year. It is not possible to show a negative cash balance in the Dependent Care FSA.

23. Run Out Period: A runoff period is the amount of time after the Plan Year has ended that your Employer allows participants to submit expenses that were incurred during the previous Plan Year.

24. Use-It-Or-Lose-It: This is a term used to explain the forfeiture procedure at year end. After the Runoff Period ends, any unclaimed dollars will be forfeited back to the Employer.

25. Cash In/Cash Out: This term is used to describe how Dependent Care claims are paid. A participant in the Dependent Care Account will never be reimbursed more than they have contributed to the Plan at any given time during the Plan Year. Much like a bank account, claims remain pending against the account until more dollars are contributed to the account.

26. 2 ½ Month Extension: This is a provision of the Plan that may or may not be offered by your Employer. Should your Employer offer this provision, you will be allowed an additional 2 ½ months after the Plan Year ends to incur expenses. When you incur an eligible expense during the first 2 ½ months of the new Plan Year and if you submit that expense during those first 2 ½ months, the claim will be reimbursed first from the previous Plan Year balance, if you have a remaining balance. If you do not have any dollars remaining in the previous Plan Year, the claim incurred and submitted during the 2 ½ month extension period will be reimbursed from the current Plan Year dollars.

27. Terminated Participant: A Terminated Participant is a person that is no longer eligible to participate in the Plan based on the Employer’s eligibility requirements. A person may become a Terminated Participant due to a layoff, a change in hours, a change in classification or a resignation.

28. COBRA: COBRA is a continuation of existing coverage. COBRA is offered to Health FSA participants who have not been reimbursed the total amount contributed to the Plan during the Plan Year. A COBRA election allows the Terminated Participant to remain an active participant in the Plan. The Terminated Participant who elects COBRA will be able to continue to submit expenses incurred after the date of termination, assuming that the Terminated Participant makes the scheduled payments as outlined in the COBRA agreement. The COBRA offering for Health FSA participants is not in conjunction with any other COBRA offerings. COBRA contributions for Health FSA Plans are generally made on an after-tax basis. The COBRA election ends on the last day of the Plan Year, assuming that you continue making your after-tax payments through the end of the Plan Year, as scheduled.

29. Crossover: Crossover is a claims process. Your Employer's insurance carrier may communicate your out-of-pocket expenses to Taxsaver Plan directly through an electronic file feed after the insurane carrier has adjudicated your claim. This alleviates the participant from submitting a claim for eligible health insurance expenses. This is not available to all Employers.

30. Health Savings Account (HSA): A Health Savings Account is an account that is available to participants who are participating in a High Deductible Health Plan (HDHP) with a minimm deductible of $1200.00 for Individual coverage and a minimum of $2400.00 for Family coverage. You may contribute to your HSA each pay period through salary reduction, if this is offered under your Employer's Cafeteria Plan or you may establish an HSA at your bank of choice and contribute to the your account on your own. The maximum contrubtion one can make when electing Individual coverage is $3050.00 a year. The maximum contribution one can make when electing Family coverage is $6150.00 a year.