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Things you need to know about GIC’s Flexible Spending Accounts (FSA) programs for active state employees
Updated July, 2020
Important update related to COVID-19
As a result of the closure of childcare facilities and dental practices, and the cancellation of elective medical procedures, the IRS has allowed plan sponsors to increase the amount of time that FSA participants can use their available funds in 2020. This means that for FY2020 participants, the grace period has been extended from September 15 to December 31, 2020. You may use your FY20 funds for services received through December, and will have until January 31, 2021 to submit claims for payment.
Things you need to know about GIC’s Flexible Spending Accounts (FSA) programs for active state employees
The Commonwealth of Massachusetts’ Group Insurance Commission (GIC) sponsors a pre-tax benefit program that includes two tax-saving reimbursement accounts. The GIC has hired Benefit Strategies to administer, adjudicate, and process all reimbursement claims on the GIC’s behalf.
The Health Care Spending Account (HCSA), authorized by Internal Revenue Service (IRS) Code Section 125 and the Dependent Care Assistance Program (DCAP), authorized by Section 129 of the IRS code, allow you to set aside pre-tax money from your paycheck to be used for certain health care and dependent care expenses. You then submit your claims for eligible expenses and are reimbursed with tax-free dollars from your account(s) – this can reduce your out-of-pocket health care and dependent care expenses by nearly 30%, depending on your tax bracket.
For most participants, the HCSA/DCAP program provides a better tax benefit than is available to an individual taxpayer who itemizes medical expenses. The tax benefits of these plans can be derived only from participating in an employer-sponsored program:
How to enroll in the pre-tax HCSA and/or DCAP Program
All employees (re-enrolling and new enrollees), who wish to participate in HCSA or DCAP must use the online enrollment process located on Benefit Strategies’ website, benstrat.com/gic-fsa.
Re-Enrolling Participants: You must re-enroll each year to continue benefits. Once logged in, click the “Enroll Now” button on the home page.
New Hires and New Participants: Enrollment e-forms must be completed within 10 calendar days from your date of hire. If you choose not to enroll as a new employee, you will be eligible to enroll in the HCSA and/or DCAP plans for the upcoming Plan Year during open enrollment, unless you have a “change in status” (see “Making Changes to Your Election” on page 7 of the participant handbook). Enrollment for the HCSA or DCAP takes place before the beginning of each plan year. To join the plan during open enrollment you must complete the HCSA/DCAP Enrollment e-Form, which is available at benstrat.com/gic-fsa. You must re-enroll each year to continue benefits.
For additional details, see the FSA page or contact Benefit Strategies at 1.877.353.9442. Open Enrollment will take place April 6 – June 1, 2020, for benefits effective July 1, 2020. Participants must re-enroll each year.
If you miss the spring Annual Open Enrollment
Employees that miss the Open Enrollment must wait until next spring to enroll in FSA benefits, unless you have a qualifying status change. See the participant handbook and status change e-form for qualifying status change details.
The Benefit Strategies Card
The Benefit Strategies card provides a convenient method to pay for out-of-pocket health care expenses for you, your spouse and any tax dependents. The advantage of the card is that you do not have to pay with cash or a personal credit card. The card will allow you to pay the merchant or health care provider directly from your HCSA account. Use of the card is optional and you can choose at each point of service if you want to use the card, the mobile app, file online, or file a traditional claim. The card is accepted at health care and certain retail providers that accept VISA®.
Simplified Member Experience:
- One debit card and one login for all programs: GIC FSA and the Commonwealth’s Commuter Choice*
- If you received a debit card for the prior fiscal year, your card will remain active upon re-enrollment.
- Smart card technology will process card swipes by account type (HCSA/Parking/Transit)
- GIC HCSA funds are available July 1
- Comptroller’s Commuter Choice account funds are available July 16
*Commonwealth’s Commuter Choice is offered by the Office of the State Comptroller; please see www.benstrat.com/clients/commonwealth for program details.
How to use the Benefit Strategies Card
The Benefit Strategies card can be used at health care providers who accept VISA®, and certain retail merchants that sell eligible health care products. At the point-of-sale, present the card and sign for a credit transaction or enter your PIN for a debit transaction. You may be subsequently required to provide supporting documentation to Benefit Strategies to show the actual date of service, patient name and a description of the service provided. It is important to retain itemized receipts and insurance carrier Explanation of Benefit (EOB) statements as documentation is required in many cases. See Additional Resources for necessary documentation details.
How to reactivate a temporarily deactivated Benefit Strategies Card
If a participant fails to provide required supporting documentation for an expense paid with the Benefit Strategies card, his/her HCSA debit card(s) will be temporarily inactivated and new charges will be denied until the prior charge is substantiated. Be sure to submit substantiation promptly to avoid deactivation of your card. Once the charge in question is substantiated, the debit card will be activated. Benefit Strategies activates cards on a daily basis.
When documentation is required to substantiate your Benefit Strategies card transactions
The IRS has very strict and specific rules regarding use of the Benefit Strategies card. Although copayments for your GIC health plan, certain over-the-counter health care products, the following items need substantiation and you will be required to provide it to Benefit Strategies upon request:
- Charges subject to your plan year deductible or coinsurance
- Physician, hospital or health care provider services other than copays
- Dental, vision and hearing devices expenses
- Copays paid under your spouse’s health plan.
You will be notified if documentation is required in order to substantiate your Benefit Strategies card transaction
If documentation is required, Benefit Strategies will send a letter or email/text to explain what is needed. If you do not respond, a second and then a final request will be sent. If you fail to respond to these requests, as required by IRS regulations, the card will be temporarily inactivated. In order to re-activate your Benefit Strategies card, you must provide the documentation requested. If you are unable to substantiate the transaction, send a check in the stated amount to the plan.
How to provide documentation in order to substantiate an Benefit Strategies card transaction
If you receive a documentation request from Benefit Strategies, the quickest method is to login to your Benefit Strategies account and upload the documents. Or, include a copy of the Benefit Strategies request letter/message with your documentation and mail or fax the information to Benefit Strategies.
How to get a Benefit Strategies card
Health Care FSA participants automatically receive a set of two cards. You may order additional card sets for $5 and order forms are available at Benefit Strategies’ website. The cards will be mailed to your home address and arrive in a plain white envelope. Read the cardholder agreement and select a PIN.
How long the Benefit Strategies card is good for
As long as you re-enroll in benefits each year, the Benefit Strategies card will be effective until the expiration date shown on the card, which is generally three years. If you use all funds early in the plan year, hang on to the card as it will be re-loaded with future year election amounts.
The FSA grace period
The FSA grace period is a 2 ½ month period following the close of each plan year during which you may continue to incur expenses to be applied toward a previous plan year balance. For example, if on June 30, you have $450 remaining in your account, you may continue to incur expenses through September 15 to apply toward that balance.
Transportation expenses to medical health care providers are eligible HCSA expenses
Transportation, parking, mileage, and related travel expenses that are essential to an employee or dependent receiving eligible care are reimbursable through the HCSA. See IRS Publication 502 under useful links on the Benefit Strategies website.
The age limit for dependent children for whom you may claim health care expenses
Dependent children are covered for HCSA expenses up to the last day of the calendar year your dependent turns age 26 regardless of the dependent's residency, financial dependence, marital status, student status, or employment.
The $5,000 DCAP limit
The IRS limit of $5,000 (or $2,500 if married and filing separate tax returns) is per household, per calendar year.
The age limit for dependents covered under DCAP child care expenses
Dependent children under age 13 and older dependents who are not capable of self-care may qualify as your dependent. Refer to IRS Publication 503 for more information.
Qualifying providers of dependent care
Qualifying dependent care providers include daycare centers, preschool or nursery school, before/after school care, day camps or a private daycare provider. Note: Expenses for education and tuition for Kindergarten or higher grades are not qualifying expenses.
How to file a claim for FSA expenses
There are a variety of options for submitting FSA claims:
- Benefit Strategies Mobile App –File claims on-the-go anytime, from anywhere! Just snap a picture of your documentation and file your claim with the mobile app.
- Benefit Strategies Card – You can use the card for qualified health care expenses. Just present the card for payment at the point of sale; then submit documentation to Benefit Strategies upon request.
- Benefit Strategies Online – File your claims online by scanning your documentation, logging into your account, and filing your claim.
- Manual Submission – You can complete a claim form, attach documentation, and fax or mail these to Benefit Strategies.
Documentation that is required with your claim submission
Be sure to include the following information:
- Provider name/address
- Patient name
- Date the service/supply was provided, regardless of when it was paid
- Description of the service/supply
- Dollar amount paid for the service/supply
Acceptable forms of documentation include:
- For expenses covered under health, vision or dental insurance, the insurance payer's explanation of benefits (EOB) statement.
- For over-the-counter health care products the merchant receipt showing the merchant name, date, dollar amount, and product/service description
- For over-the-counter drugs/medicines your physician’s prescription and the merchant receipt as described above
- The provider's itemized statement showing the provider name/address, patient name, date service was provided, description of service and dollar amount
- For prescriptions, the pharmacy or mail-order receipt or a printout from your pharmacy
Examples of unacceptable claim documentation are:
- Cancelled checks
- Credit card receipts
- Statements that are not itemized and say "balance forward" or "previous balance due" or "paid on account"
- Statements for service that has not yet been provided (for example future dates of service)
- Pre-treatment estimates of services to be provided in the future
- Statements that do not include the date service was provided
- Statements that do not include the description of the service
- Statements that do not include the provider name, patient name and dollar amount you owe
How to enroll in FSA benefits as a new state employee
New Hire enrollment e-forms must be completed within 10 calendar days from your date of hire. To join the plan you must complete the HCSA/DCAP Enrollment e-Form, which is available at benstrat.com/gic-fsa.
If you choose not to enroll as a new employee, you will be eligible to enroll in the HCSA and/or DCAP plans for the upcoming Plan Year during open enrollment, unless you have a “change in status”. Enrollment for the HCSA or DCAP takes place before the beginning of each plan year.
How to change your FSA election amount during the plan year
IRS regulations stipulate that your elections remain in effect for the plan year unless you have a qualifying change in status. Examples of qualifying status changes are marriage, divorce, or birth or adoption of a child. You may only enroll in either plan, change your contribution, or terminate your election during the Plan Year if you can demonstrate a qualified “change in status.” The chart below provides an overview of qualified “change in status”. Please see the FY2020 Participant handbook for more details.
A “change in status” request can be made by completing the Change in Status e-form available on the Benefit Strategies website at benstrat.com/gic-fsa. This request must be made no later than 60 days after the status change occurs. The completed online form will be sent to your GIC Benefits Coordinator. You will need to provide your Benefits Coordinator with documentation verifying a change in status, such as a marriage or birth certificate.
How to update your address with Benefit Strategies
You can update your address through the Benefit Strategies portal. You can also send an email to Benefit Strategies. Include your name, employee ID number, your old address and your new address.
Going on leave of absence (LOA) and how your FSA deductions will be made
There are two types of Leaves of Absence: Paid and Unpaid. Prior to going on a LOA, an Enrollment/Status Change e-form must be completed online. This form will be provided to your Benefits Coordinator to verify your leave. The e-form is available at: benstrat.com/gic-fsa.
How your Flexible Spending Account benefits are affected if you are a state employee going on an unpaid leave of absence
When you go on an unpaid leave of absence, you have three options for your Health Care Spending Account (HCSA) benefits:
- You may have the deductions for the unpaid leave taken on a pre-tax basis from the last paycheck prior to your leave providing there are sufficient funds for the deduction. When you elect this option, you may continue to submit HCSA claims for reimbursement and to use your HCSA debit card for eligible expenses during the unpaid leave of absence.
- You may decide not to contribute while on an unpaid leave of absence. When you choose this option, any claims submitted for reimbursement and any payments made with the HCSA debit card will be denied.
- You may choose to contribute to the HCSA account on an after tax basis. Be sure to notify your payroll coordinator and Benefit Strategies to set up this option. When you elect this option, you may continue to submit HCSA claims for reimbursement and use your HCSA debit card for eligible expenses during the unpaid leave of absence. However, there are no tax benefits with this option.
Expenses incurred while on the unpaid leave of absence are not eligible for Dependent Care Assistance Program (DCAP) reimbursement unless you are disabled and unable to care for a child.
For additional information regarding paid and unpaid LOA, please see the GIC’s FY2021 Participant Handbook, HCSA/DCAP Leave of Absence Options (LOA) (starting on page 9).
What happens to your Flexible Spending Account (FSA) if you terminate employment or retire?
If you leave state service during the FSA plan year, your participation in the Health Care Spending Account (HCSA) and Dependent Care Assistance Program (DCAP) will terminate as of midnight on the last date of your active employment.
HCSA: Your debit card(s) will be de-activated and you will only be able to submit claims for eligible health care expenses that were incurred on or before your last day of active employment. You have until October 15 to submit claims for the Plan Year expenses. In order to use your HCSA account after you terminate state service, you may elect to continue to contribute to the HCSA account under COBRA by making direct payments on an after-tax basis. Your eligibility for HCSA COBRA will be determined by the plan administrator, Benefit Strategies. The amount billed to you by Benefit Strategies will include a 2% administrative fee.
DCAP: You may file claims for eligible dependent care expenses against your account balance for expenses you incur until your DCAP account is exhausted. Claims can be filed with dates of service through the end of the 2.5 month extension. All claims must be filed by October 15.
Note: employees leaving state service cannot pre-pay or have a pre-tax deduction lump sum taken from their last check for the balance of their current year plan contribution.