BAI Flexible Spending Accounts
A Flexible Spending Account (FSA) is a great way to allow your employees to set aside pre-tax dollars to pay for qualified medical expenses – many of which they are already incurring today!
The FSA is an employer-sponsored benefit which you can offer to your employees to supplement your medical, dental, and/or vision plan offerings. Expenses typically not paid for by these plans like deductibles, copays, and coinsurance can be reimbursed from the FSA. Since many people are already incurring these expenses, participating an FSA can save them 25-30% on those costs.
Other expenses to consider for an FSA are eyeglasses, contact lenses, cough medicine, pain relievers, shoe inserts, and chiropractic care. What’s great about the FSA is that the employee’s annual election is available to them on the first day of the plan year so they can start saving immediately. A debit card can also be offered as part of your FSA to allow easy access to their funds.
The Dependent Care Assistance Program (DCAP) is another spending account component that you can add to your plan. The DCAP allows your employees to set aside money from their paycheck on a pre-tax basis to help pay for qualifying child care or elder care expenses. Employees can choose the FSA, DCAP, or both!
A flexible spending account is a great way to set aside a portion of your salary to be reimbursed to you for certain medical/dental/vision expenses which are not covered by any other benefit plan and work-related day care expenses. The money you set aside in your flexible spending account (FSA) is deducted from your gross pay BEFORE the Federal Income Tax, Social Security, Medicare, State and Local taxes are calculated. Signing up for this yearly elected benefit plan is like Uncle Sam giving you a pay raise.
Section 125 is part of the IRS Code that allows employees to convert a taxable cash benefit (salary) into non-taxable benefits.
The Premium Only Plan is a popular flexible spending plan of the Section 125 Plan. It allows for certain employee paid group insurance premiums to be paid with pre-tax dollars. The more popular qualified premiums (if offered by employer) are: health, dental, prescription, and vision.
The Reimbursement Flexible Spending Plan allows an employee to put pre-taxed funds into an account for medical/dental/vision expenses not covered by their health plan. The employee can also put pre-taxed funds into a separate account for day- care expenses for their dependent (s) while they are at work.
While employees are saving on their taxes, the employer also saves on the matching Social Security and Medicare taxes of all the funds put through the Section 125 plan(s). Other advantages for putting in Section 125 plan (s) are cost control regarding the rising costs of employee benefits, increases employee morale and loyalty, enhances the benefits package, and helps in recruiting quality new employees.
- Summary Plan Description development
- Timely claims processing
- Financial reporting
- Debit cards options for POS purchases
- Online access for both employer and employee
- Mobile app claims processing
FSA Claim Submission Guidelines
Please follow the guidelines below when completing your claims supporting statement in order to receive your reimbursement check promptly:
Make sure your employer’s name is on the top of the Claims Supporting Statement.
- You can submit the prescription bag tag that contains the patients name, date filled, prescription name and the co-pay amount. If you prefer, you can submit a print out from the pharmacy with your prescription listed by submitting each individual bag tag for your prescription.
- You can submit a copy of the provider’s walk-out statement with the date of service, patients name, and the procedure. If you do not get one from your physician, please ask for one. You can also submit a copy of your Explanation of Benefits (EOB) from your health insurance plan.
- For statements you receive after all insurance payment have been applied, please make sure the invoice has the date of service, patients name and the amount due.
- Vitamins will require a written prescription or letter of medical necessity (good for one year from date of physician’s orders) in order to be reimbursed from your flexible spending account, even if purchased at a chiropractor’s office.
- Please do not highlight anything on the statement or receipt, especially if you fax your request. The highlighting makes the item unreadable and dark. Please circle the item instead.
For Dependent Care (Day Care) reimbursement: (Funds available after deducted from pay)
- Please submit a statement/receipt from your daycare provider with your child(ren) name(s), and the dates of service, amount you paid and their tax id number.
REMINDER: Claims are processed by the date of service is performed, not the date they are billed or paid for. This standard is set by the IRS who governs the regulations for the flexible spending account.
- Cash register receipts for prescriptions
- Credit/ Debit card machine receipts
- Copies of cancelled checks
- Unreadable receipts/ provider statements/ EOBs