Health Care
Eligible Expenses
Open a Flexible
Spending Account
The list of eligible health care items is updated frequently by the Internal Revenue Service. If you are uncertain
about whether or not an item or service qualifies for reimbursement, you should determine expense eligibility
before making the purchase. Also, your employer’s plan document may limit eligible expenses for which you
may receive reimbursement.
The Value of a Flexible Spending Account
General Expenses:
Miscellaneous Items:
• Medical plan deductibles
• Medical plan co-payments
• Dental
• Orthodontia expenses
• Vision care expenses: exams, glasses, contact lenses
and lens maintenance solutions, laser eye surgery
• Routine checkups and physicals
• Routine medical foot care
• Services for alcoholism or drug addiction (qualified)
• Cosmetic surgery (medically necessary)
• Birth control pills, devices and procedures
• Private duty nursing services
• Well baby care and immunizations
• Tobacco cessation programs (physician prescribed)
• Occupational/physical therapy
• Chiropractor expenses for medical care
• Infertility treatments
• Psychology and psychoanalysis
• Weight-loss program (medically necessary)
• Speech therapy
• Braille books
• Convalescent home (for medical treatment only)
• Reading therapy for dyslexic child
• Guide dog and its maintenance
• Select educational costs for physically and cognitively
handicapped children
Reduce your essential
health care expenses
by 20% to 40%
Medical, dental and vision plans typically share the expense of
health care with the insured. And some benefit packages do
not include dental or vision coverage. Taken together, the plan
deductibles, co-payment amounts, annual coverage limits and
excluded coverages can amount to significant out-of-pocket
cost for you. An FSA allows you to pay for these expenses in a
tax advantaged manner. Your actual savings will be based on
your individual tax rate. FSA contributions are exempt
from Federal income tax, Social Security taxes (FICA) and, in
most cases, state income tax. This special tax status for FSA
contributions is the mechanism that allows you to save money
on the health care expenses you must pay for yourself.
Equipment & Supplies:
• Back support devices
• Specialized apparatuses for the sick/physically disabled
• Orthopedic shoes
• Special mattress (medically necessary)
• Repair of special phone equipment for the deaf
• Hearing aids and batteries
Medical Treatments:
It’s All Yours
• Acupuncture or related procedures when treating a
medical condition
• Sterilization (reproductive)
• Whirlpool baths (medically necessary)
• Prescription drugs
• Over-the-counter drugs and medicines (qualified)
Automatic Data Processing, Inc.
2575 Westside Parkway, Suite 500
Alpharetta, Georgia 30004-3852
© 2006 ADP, Inc. The ADP Logo is a registered trademark of ADP of North America, Inc. Printed in U.S.A.
A Flexible Spending Account (FSA) allows you to pay for essential
health care expenses that are not covered, or are partially covered,
by your medical, dental and vision insurance plans. By contributing
a portion of your payroll dollars into your FSA on a pre-tax basis,
you can save 20% to 40% on the cost of eligible health care items
and services. You may also use your FSA contributions to pay for
deductibles, co-payment amounts and eligible expenses for which
you have no coverage at all.
There is no cost to you to have and use a Flexible Spending
Account...no setup fee, no hidden fees. And a special
advantage of the ADP Health Care FSA allows immediate
access to your entire annual election amount from the first
day of the benefit year, before all scheduled contributions
have been made.
FSA HC 2007
Plan Your Contributions
Purchasing with Pre-Tax Dollars
The key to getting the most from your FSA is to
maximize your contributions based on your anticipated
eligible expenses. To plan your contributions, follow
these simple steps.
The below examples assume a net tax rate of 30%. Your personal tax rate may be greater or less.
Net Cost
Price
Deductibles for Adults (2)
Deductibles for Children (2)
Eyeglasses (2 pair)
Prescription Co-Payments (annual)
Laser Eye Surgery
Orthodontia
• Review the list of eligible expenses.
• Review your health care expenses from last year.
• Write down any new eligible expenses you anticipate
in the new benefit plan year (for example, prescription
eyeglasses, new medications, scheduled surgery, loss
of dental or vision coverage, orthodontia, etc.).
$700
$700
$280
$252
$840
$3,500
$1,000
$1,000
$400
$360
$1,200
$5,000
=
Tax Savings
$300
$300
$120
$108
$360
$1,500
and many others...
Just consider for a moment the
savings...20% to 40% less out
of your pocket on things you
have to pay for anyway!
• Be sure to include plan deductibles or some portion
of them.
• Then estimate your cost for each of these uncovered
or partially covered eligible expenses. The total of
your individual estimates from above is about what
you should contribute to your FSA.
It may surprise you how much you actually pay out
of your pocket each year for health care expenses.
It is also important to remember that an FSA is not a
savings account. You must use all of your contributions
each year or risk losing any unused balance at the end
of the plan year. So, plan to contribute what you expect
to be able to spend on eligible expenses within the
benefit plan year.
A contribution planning worksheet is available online
and in print to help you plan your contributions.
Learn more about Flexible Spending Accounts at www.flexdirect.adp.com
Opening Your Account
It’s as simple as 1-2-3 to begin contributing
to your new Health Care FSA Account.
1
Coverage Eligibility
You may enroll in your employer’s FSA plan even if you
receive health care insurance through your spouse’s
employer. And your FSA may be used for eligible expenses
for all of your qualified dependents. Please remember
you must actively re-enroll each year in your Health Care
FSA plan.
• Save 20% to 40% on your health care expenses
• Receive reimbursement for an extensive list of eligible expenses
through simple claims filing
• Save on purchases not covered by your insurance
• Reduce your income taxes
• Fund your account with simple paycheck deductions
2
3
Plan your contributions. Use
the More About Health Care FSA
link at www.flexdirect.adp.com
for contribution planning
assistance.
Enroll in the Health Care FSA
during your annual enrollment
or new hire election period.
Review your account online
through the FSA website soon
after the plan year begins and
at least monthly thereafter.
Your payroll contributions to your new
FSA account will begin with the new plan
year or according to your employer’s plan
documentation.
Open an ADP Dependent Care
Flexible Spending Account
The Value of a Dependent Care Flexible
Spending Account
An ADP Dependent Care Flexible Spending Account (FSA) allows
you to pay for dependent care expenses at a special tax
advantage. By contributing a portion of your payroll dollars into
your account on a pre-tax basis, you can save 20% to 40% on the
cost of eligible dependent care.
Reduce your dependent care
expenses by 20% to 40%
Your savings will be based on your individual tax rate. FSA contributions are exempt from Federal income tax, Social Security taxes
(FICA/FUTA) and, in most cases, state income tax. The tax exempt
status for FSA contributions is the mechanism that allows you to
save money on your dependent care expenses.
It’s All Yours
There is no cost to you to have and use a Dependent Care Flexible
Spending Account...no setup fee, no hidden fees.
Purchasing with Pre-Tax Dollars
As an example of the value of using pre-tax dollars to pay for
dependent care, consider this scenario. The Johnsons have two
young children who are placed in regular day care. The annual fee
for the day care is $5,000. Assuming the Johnsons have a tax rate
of 30 percent, they will save $1,500 by using a Dependent Care
FSA to pay for their dependent care expenses!
• Save 20% to 40% on your dependent care expenses
• Reduce your income taxes
• Fund your account with simple paycheck deductions
• Receive reimbursement for expenses through
simple claims filing
Plan Your Contributions
The key to getting the most from your ADP Dependent
Care FSA is to maximize your contributions based on
anticipated eligible expenses. To plan your contributions,
follow these simple steps.
• Review the list of eligible expenses.
• Review your dependent care expenses from last year.
• Write down any changes to your previous dependent
care expenses, for example, a fee increase or any new
expenses, such as an additional child entering
dependent care.
• Estimate your cost for each dependent care item.
The total of your individual estimates from above is
what you should contribute to your Dependent Care FSA.
Eligible Expenses
Following is a partial list of eligible dependent care
expenses. If you are uncertain about whether or not a
dependent care expense qualifies for reimbursement,
you should determine its eligibility before incurring
the expense. Also, your employer’s plan document
may limit eligible expenses for which you may receive
reimbursement.
•
•
•
•
•
•
•
Care at licensed nursery schools
Day care in your home or outside
Before and after school care
Day camps
Child care centers
Babysitter or au pair
Eldercare
Note: $5,000 is the annual regulatory maximum for
dependent care FSA contributions for a household.
It is also important to remember that an FSA is not a
savings account. You must use all of your contributions
each year or risk losing any unused balance at the end of
the benefit plan year.
Please remember that you must actively
re-enroll in your Dependent Care FSA
each benefit plan year.
Opening Your Account
It’s as simple as 1-2-3 to begin contributing to
your new Dependent Care FSA Account.
1
2
3
Plan your contributions.
Complete the enrollment form with
your contribution elections.
Return your signed enrollment form
to your employer.
Your payroll contributions to your new FSA
account will begin with the new plan year or
according to your employer’s plan documentation.
Learn more about Flexible Spending Accounts
at www.flexdirect.adp.com
Automatic Data Processing, Inc.
2575 Westside Parkway, Suite 500
Alpharetta, Georgia 30004-3852
FSA DC 2007
© 2006 ADP, Inc. The ADP Logo is a registered trademark of ADP of North America, Inc. Printed in U.S.A.
The
FSA Card
Fast
Using the FSA Card
Convenient
The FSA Card may be used in medical and dental
offices, hospitals, health care clinics, pharmacies and
online pharmacies to purchase the same eligible
items and services for which you can submit paperbased claims for reimbursement. And, as credit card
technology changes, you will be able to use the Card
at a growing number of locations.
Avoid up-front,
out-of-pocket expense
The FSA Card is an additional convenience offered by your
employer in conjunction with your ADP Flexible Spending
Account (FSA). The Card is a useful and easy-to-use tool,
similar to a bank account debit card, that allows you to
remove funds from your FSA with a simple swipe at a
merchant payment terminal. By using the Card to purchase
eligible expenses, you avoid paying for a purchase with
money out of your pocket.
Save Your Receipts
The primary value of your FSA Card is to allow you to avoid
paying for eligible expenses out-of-pocket, and then
submitting a claim for reimbursement. However, because
of the special tax status of your FSA contributions, IRS
regulations will often require you to submit the receipt for
your purchase after the fact as proof of the eligibility of the
expense. So, please make a habit of saving all of your
itemized purchase receipts.
© 2006 ADP, Inc. The ADP Logo is a registered trademark of ADP of North America, Inc. Printed in U.S.A.
You Will Receive a
Card Automatically
If your employer offers the FSA Card as part of your
FSA plan, you will receive a Card in the mail.
However, you may always choose between using
your FSA Card or filing paper-based claims. Should a
merchant selling eligible items or services not accept
the FSA Card, you will remain able to pay for the
eligible expense out-of-pocket and submit a claim
for reimbursement from your FSA.
Learn more about the FSA Card by logging on
at www.flexdirect.adp.com
Automatic Data Processing, Inc.
2575 Westside Parkway, Suite 500
Alpharetta, Georgia 30004-3852
FSA CARD 2007