A Special Message to the CFO

A Special Message to the CFO

In establishing the rules for Flexible Spending Accounts, the Internal Revenue Service requires that such plans include an element of risk, similar to insurance, for both parties. While these risks are not frequently realized, it is important for both the plan sponsor and participant to be fully informed of the potential consequences of offering and participating in a Flexible Benefit Plan.

Since a health care spending account, is a pre-funded account the employer is at risk for those employees who terminate employment with a negative health care spending account balance. These monies cannot be recouped from terminated employees. The employer must also comply with the plan requirement, which includes COBRA administration for the health care account if elected (rare).

The employee’s bear a risk for money withheld and not claimed by the close of the plan year’s run out period. The employer retains any funds remaining. This potential problem, like the employer risk of uncollectible election balances, is minimized by careful plan design, precise communications and employee planning – two important aspects of our services.

Health Reimbursement Arrangements, unlike FSA Accounts, are funded solely by the employer plan sponsor. Employers are not required to fully fund the account, instead HRAs are a promise to pay; reimbursing expenses only as a qualified expense is incurred. HRA accounts are book keeping accounts, making adjustments only once the expense is incurred. With HRA administration, the employer decides how unclaimed funds are allocated as rollovers are permissible.

The third funding arrangement is a Health Savings Account. Eligibility for enrolling in an HSA requires participation in a qualified high deductible health plan. This reimbursement program was designed to provide participants the opportunity to pay for their current medical needs using tax deductible dollars while saving for expected health care expenses during retirement. Contributions into the account can be pre-tax or after-tax; they can be made by the employee, the employer, or a combination of the two. It is important to note that all contributions become the ownership of the participant, allowing for account rollovers to future plan years.

	Simple. Convenient. Smart.	Additional Card Request Authorized Form for Information Release Dependent Care Provider Form Letter of Medical Necessity Claim Filing Instructions Dependent Care Reimbursement Request Health Care Reimbursement Request Transit & Parking Reimbursement Accessing Your Account Online FSA Over-the-Counter Drug Guide Using the CareFlex Express Benefit Card Direct Deposit Authorization Instructions for Online Claim Entry

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Who is CareFlex? Tools of Today Sponsoring a Plan A Special Message to the CFO Account Management Retirement Health Arrangements Wellness Incentives Reporting Capabilities Request a Proposal Privacy Policy	A Special Message to the CFO In establishing the rules for Flexible Spending Accounts, the Internal Revenue Service requires that such plans include an element of risk, similar to insurance, for both parties. While these risks are not frequently realized, it is important for both the plan sponsor and participant to be fully informed of the potential consequences of offering and participating in a Flexible Benefit Plan. Since a health care spending account, is a pre-funded account the employer is at risk for those employees who terminate employment with a negative health care spending account balance. These monies cannot be recouped from terminated employees. The employer must also comply with the plan requirement, which includes COBRA administration for the health care account if elected (rare). The employee’s bear a risk for money withheld and not claimed by the close of the plan year’s run out period. The employer retains any funds remaining. This potential problem, like the employer risk of uncollectible election balances, is minimized by careful plan design, precise communications and employee planning – two important aspects of our services. Health Reimbursement Arrangements, unlike FSA Accounts, are funded solely by the employer plan sponsor. Employers are not required to fully fund the account, instead HRAs are a promise to pay; reimbursing expenses only as a qualified expense is incurred. HRA accounts are book keeping accounts, making adjustments only once the expense is incurred. With HRA administration, the employer decides how unclaimed funds are allocated as rollovers are permissible. The third funding arrangement is a Health Savings Account. Eligibility for enrolling in an HSA requires participation in a qualified high deductible health plan. This reimbursement program was designed to provide participants the opportunity to pay for their current medical needs using tax deductible dollars while saving for expected health care expenses during retirement. Contributions into the account can be pre-tax or after-tax; they can be made by the employee, the employer, or a combination of the two. It is important to note that all contributions become the ownership of the participant, allowing for account rollovers to future plan years.


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