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FAQ - Frequently Asked Questions
What is an FSA?
A Flexible Spending Account is an account funded by employee salary deferral elections and, in some cases, employer contributions, for the purpose of reimbursing expenses on a pre-tax basis. Most plans offer two types of accounts: Medical (also called Health Care) for reimbursement of eligible medical, dental, vision, prescription and over-the-counter drug expenses; and Dependent Care for reimbursement of day care expenses.
Your employer will set a maximum contribution amount at the beginning of each plan year. Participants may elect to contribute an amount each plan year up to that maximum.
How will National Health Care Reform Affect my FSA?
There are two important changes that will take place due to the Federal Health Care Reform Law:
I. Important Medical FSA change as of January 1, 2011 (Updated Jan 2011).
Under the Patient Protection and Affordable Care Act (also known as Health Care Reform), over-the-counter (OTC) medicines and drugs purchased on or after January 1, 2011 can be reimbursed only if prescribed by a physician. Some examples of medicines and drugs which will require a physician’s prescription are: Allergy Medication, Aspirin, Anti-itch, Cold Sore Remedies, Cough Medicine, Digestive Aids, Rash Ointments/Creams, Sleep Aids & Sedatives, Pain Relief and Stomach Relief.
This change does not apply to medical supplies such as insulin even if purchased without a prescription, or other health care expenses such as medical devices, eyeglasses, contact lenses, bandages, co-pays and deductibles. A longer list of eligible and ineligible expenses can be found here.
To receive reimbursement for over-the-counter medicines and drugs, please submit your reimbursement request along with a physician’s prescription and supporting bills/receipts.
Q. Am I allowed to use my debit card to pay for OTC medicines and drugs?
A. Yes. Due to a late December 2010 IRS ruling, you are allowed to use your debit card to pay for OTC medicines and drugs using your debit card if certain conditions are met. This capability is being implemented by pharmacies and mail-order/web-based drug vendors. Debit card use for OTC medicines and drugs is allowed so long as you: 1. obtain a prescription for the medicine or drug from your physician and present it to the pharmacist, 2. the medication is dispensed by a pharmacist and 3. the transaction is assigned an Rx number.
Q. What if I inadvertently use my debit card to purchase an OTC medicine or drug after January 1, 2011?
A. Retailers will be converting their systems to prevent purchase of certain OTC items but this may take some time. While retailers update their systems, if you inadvertently purchase an OTC medicine or drug with your debit card, and the retailer allows the transaction, you will not need to submit a doctor’s prescription after-the-fact.
Q. How do I get reimbursed for OTC items if I have a doctor’s prescription?
A. Submit the prescription along with your request for reimbursement. Documentation must include: 1. provider/merchant name, 2. date of purchase, 3. product/item name and 4. expense amount. Note: If your receipt shows an Rx number, you will not be required to submit a doctor’s prescription.
Q. If I submit a prescription once, do I need to submit it again if seeking reimbursement for a similar item?
A. Yes, you will need to submit the prescription every time you submit for reimbursement.
Q. Must I submit a new prescription with each purchase? For instance, if my prescription is dated in March, and I purchase the product in June, is this OK?
A. If the prescription has not passed a specified expiration date, then it will be acceptable. However, if the prescription is dated in March and mentions no refills, and you use it for reimbursement of an expense in March, it would be up to you to track this and not use it for a second time.
Q. What is the definition of a “prescription”?
A. For purposes of the new rule, a prescription is an electronic or written order for a medicine or drug that meets the legal requirements of a prescription in the state in which the medical expense is incurred, and that is issued by an individual authorized to issue a prescription in that state.
Q. If I purchase OTC medicines or drugs in 2010 but wait until 2011 to submit my claim, will the expense qualify for reimbursement without a prescription?
A. Yes, if you submit a 2010 OTC medicine or drug expense during your plan’s run out period, it will be eligible without a prescription. The new rule applies only to OTC purchases made on or after January 1, 2011.
II. Medical FSA $2,500 Limit Effective 2013: Also, as importantly, effective for taxable years starting in 2013, there will be a limit on Medical FSAs deductions. This limit will be $2,500 for 2013 and will be indexed to the Consumer Price Index starting in 2014.
How do I enroll in electronic communications?
Reimbursement Account Holders can choose to receive reimbursements directly into their preferred bank account via Direct Deposit. To enroll, log into your MyCrosbyBenefits.com Account and access your Reimbursement Account information. From your Account Profile tab (within your Reimbursement Account), click 'Edit' within the Direct Deposit Information section and when prompted, complete the online form. Submit the information once complete.
You also have the option to “Go Paperless.” Choose to receive communications via email rather than US Mail. From your Account Profile tab (within your Reimbursement Account), click 'Edit' within the Profile section. Confirm or enter your email address and finally, choose Electronic from the drop down menu in the Communications field. Submit the information once complete.
By choosing these options, communication is more efficient and reimbursements are received much faster (and both help the environment too).
What medical expenses may be reimbursed through a Medical FSA?
In most cases, a participant may be reimbursed for a medical care expense which is defined as a deductible expense for federal income tax purposes, but which has not been or will not be reimbursed by any other source and which will not be deducted on the employee's income tax return. Please Note: cosmetic procedures are not considered reimbursable. Some examples of eligible expenses include co-payments and deductible payments required by health insurance; also vision, hearing, dental, most prescription drug expenses not covered by health insurance and over-the-counter drugs.
What are some examples of expenses reimbursable under a Medical Flexible Spending Account?
Please click here for a list of items reimbursable under a Medical Flexible Spending Account.
What Over-the-Counter (OTC) health care expenses are eligible under a Medical FSA?
Please Note: All over-the-counter medications and drugs now require a doctor's prescription to be eligible for reimbursement.
Some examples of eligible Over-the-Counter items which require a doctor’s prescription include:
- Allergy Relief
- Analgesics (e.g. aspirin, acetaminophen, ibuprofen)
- Antacids and heartburn relief
- Antibiotic cream and ointment, hemorrhoid preparation
- Anti-itch and hydrocortisone creams
- Arthritis pain relief
- Cold medications
- Dental care (e.g. toothache relief)
- Ear Care (e.g. ear drops, ear wax removal)
- Feminine Care (e.g. yeast infection products)
- Foot Care (e.g. athlete’s foot treatment)
- Motion sickness Treatments
- Smoking-cessation relief (e.g. patches, gum)
- Tooth and mouth pain relief
- Urinary Pain Relief
- Wart removal medication
Some examples of eligible Over-the-Counter items which DO NOT require a prescription include:
- Crutches and canes
- Dental care (e.g. denture adhesive, temporary filling)
- Ear Plugs
- Eye Care (e.g. contact lens solution, eye patches, reading glasses)
- Family Planning (e.g. condoms, pregnancy test, ovulation predictor kits)
- First Aid (e.g. heat wraps, hot/cold packs, bandages, Band-Aids)
- Foot Care (e.g. arch and insole supports, callous removers, athletes’ foot treatment)
- Home diagnostic test or kits (i.e. blood pressure, cholesterol, diabetes)
- Smoking-cessation relief (e.g. patches, gum)
If there are items of interest to you not on the list; please email the Crosby Benefit Systems Service Center or call 800-462-2235.
Can I change or cancel my Medical or Dependent Care Flexible Spending Account (FSA) Election at anytime during the plan year?
The FSA election you make during an enrollment period is required for the entire plan year. Changes to your FSA election (i.e. increase or decrease in your elections) can only be made during open enrollment, OR under special circumstances like when a qualified status change occurs.
What are considered qualified status changes?
In general, acceptable status changes are as follows (Please Note: definitions of your employer’s acceptable status changes can be found in your Summary Plan Description or SPD (speak with your Human Resources representative about acquiring a copy of your SPD):
1. Change in legal marital status
2. Change in employment status
3. Change in number of dependents
4. Dependent satisfies or ceases to satisfy eligibility requirements
5. Entitlement to Medicare or Medicaid
How do I submit a claim for reimbursement?
To submit a request for reimbursement, please send proof of an incurred expense(s) (i.e. an itemized bill or receipt along with a completed Reimbursement Request Form found here).
Receipts must include: name of the person who received service, name and address of the service provider, nature of the service or supplies (drug name if submitting a prescription or over-the-counter medication), amount of the reimbursable expense and the date(s) of service(s).
Please submit Reimbursement Request and supporting documentation to Crosby Benefit Systems via:
Mail: Crosby Benefit Systems
PO Box 25172
Lehigh Valley, PA 18002-5172
Or, you may create a new claim and upload your receipts through your MyCrosbyBenefits.com Reimbursement Portal.
1. Expenses must be incurred during the current plan year and during your dates of participation
2. Reimbursement checks/direct deposits are sent according to a pre-determined processing schedule.
3. A “run out period” will immediately follow the plan year during which participants may submit claims for expenses incurred during the previous plan year.
What information should be provided on the supporting documentation submitted with the reimbursement request?
Attach receipts or statements that clearly show: Name of person receiving service, nature of service or supplies, name and address of care provider, amount charged, date the service was provided. For some expenses, a doctor's note may be required to verify that the expense qualifies as medical care. Please Note: for dependent care expenses, the IRS requires that participants provide the tax identification number and (or Social Security Number) of the day care provider(s). In addition, this information must also be provided on the Child Care Expenses Tax Schedule.
What Qualifies as a Medical Practitioner’s (Doctor’s) Note?
For some expenses, a medical practitioner note is required to verify that the expense qualifies as medical care. To be allowable, a medical practitioner note may be written by a doctor of medicine, dentistry, podiatry, optometry, an authorized chiropractor, an alternative healer or other qualified medical practitioner. A medical practitioner note must contain all of the following items:
1. Date (a note must be provided each year)
2. Patient’s name
3. Medical practitioner’s name, address and signature
4. The medical condition or statement of medical necessity
5. The prescribed treatment
6. The duration of treatment required.
What is the difference between a Medical Practitioner’s note and a Prescription for OTC medicines and drugs, and when is each required?
Medical Practitioner (Doctor’s) Notes:
- For some expenses (for example, dietary supplements), a medical practitioner note is required to verify that the expense qualifies as medical care.
- To be allowable, a medical practitioner note may be written by a doctor of medicine, dentistry, podiatry or optometry; an authorized chiropractor, an alternative healer; or other qualified medical practitioner.
- A medical practitioner note must contain all of the following items: 1. Date; 2. Patient’s name; 3. Medical practitioner’s name, address and signature; 4. The medical condition or statement of medical necessity; 5. The prescribed treatment; and 6. The duration of treatment required.
- Crosby will keep a copy of valid Medical Practitioner notes on file so it is not necessary to include previously submitted notes with each submission.
Prescription for OTC medicines and Drugs:
- Starting January 1, 2011, OTC medicines and drugs require a physician’s prescription to be eligible.
- A valid prescription is an electronic or written order for a medicine or drug that meets the legal requirements of a prescription in the state in which the medical expense is incurred, and that is issued by an individual authorized to issue a prescription in that state.
- Due to its interpretation of IRS rules, Crosby will NOT keep a copy of prescriptions on file. For OTC medicines and drugs, you must submit your prescription with each submission.
- You may submit the same prescription as many times as the prescription allows (for example, three times if three refills are prescribed).
Do any online retailers offer an “FSA Eligible” label on health related products?
Some online retailers (such as CVS.com, Drugstore.com, FSAStore.com and Walgreens.com) offer items with an “FSA Eligible” label which MAY BE eligible for reimbursement under an FSA.
Please Note: Crosby Benefit Systems does not endorse these retailers or any other specific retailers. Merchants may not follow IRS Guidelines for determining the FSA eligibility of health related products.
Who is Acclaris?
Acclaris is our Reimbursement Account system partner. Crosby selects the best system partners in the industry to assist us in providing superior benefit services to our participants and clients.
Are canceled checks or bank statements an acceptable form of documentation?
No. According to IRS guidelines, canceled checks and bank statements (including credit card statements) are not acceptable documentation.
Which types of medical expenses are generally not eligible for reimbursement under a Medical FSA?
The following are generally not eligible for reimbursement under a Medical FSA:
- Premiums for health insurance
- Premiums for Medicare
- Any expenses reimbursable by insurance, Workers' Compensation, or any other means
- Expenses for cosmetic procedures and products
- Dietary supplements for general good health
What is the mileage reimbursement for a Medical Flexible Spending Account?
A standard mileage rate can be used for car transportation that is primarily for, and essential to, medical care. The standard mileage rates are:
> 24 cents per mile, effective January 1, 2013
> 23 cents per mile, effective January 1, 2012
> 23.5 cents per mile, effective July 1, 2011 (19 cents per mile 1/1 - 6/30/2011)
> 16.5 cents per mile for 2010.
Parking fees and tolls can also qualify. To be reimbursed, calculate your mileage cost and submit amount along with a receipt or bill for a medical appointment co-pay or expense.
What is my Employee ID/Pin?
Generally, your Employee ID/Pin is a unique number assigned to you by your employer. If you are unsure about what your Employee ID is, please contact your Human Resources Department.
What is the maximum amount which can be contributed to a Dependent Care FSA?
Your employer will set a maximum contribution amount at the beginning of each plan year. Participants may elect to contribute an amount each plan year up to that maximum. Per IRS requirements, employers may allow eligible participants to contribute up to a maximum of $5,000 ($2,500 for married individuals filing separately) for any one tax year. The contributions, however, cannot exceed the earned income of the lower-paid spouse. Also, participants may need to choose between a dependent care reimbursement account and the dependent care tax credit because the tax credit maximum is reduced dollar for dollar for each dollar placed into a reimbursement account. Please be aware that the plan year may not coincide with the tax year.
What expenses may be reimbursed through a Dependent Care FSA?
Expenses must be “Eligible Employment Related Expenses” as defined in your Summary Plan Description or SPD (speak with your Human Resources representative about acquiring a copy of your SPD). Generally, “Eligible Employment Related Expenses” are expenses for the custodial care of one or more Qualifying Individuals that enable you (and your spouse, if applicable) to work or look for work.
When can I submit my claims for Dependent Care expenses?
Under IRS guidelines, a dependent care expense can only be reimbursed AFTER it has been incurred. Only claims received for services provided in the current month or prior months in a plan year will be eligible for reimbursement.
What is the definition of a Qualifying Individual?
- A “Qualifying Child” (as defined in Code Section 152(c)) who is under the age of 13 and who resides with you for more than half of the year;
- A dependent (as defined generally in Code Section 152) that is incapacitated and resides with you for more than half of the year*; or
- A legal spouse who is incapacitated and resides with you for more than half of the year.
*Currently, an individual (other than an individual who qualifies as a “qualifying child” of the employee) cannot qualify as a dependent under Code Section 152 if he/she has income equal to or in excess of $3,200 (adjusted for inflation). You should consult with qualified tax or legal advisor to determine if individuals for whom you are submitting reimbursement requests qualify as Qualifying Individuals.