Flex Debit Card Information for Employers

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The Flex Debit Card is a MasterCard® debit card that your employees can use to pay for eligible health care and dependent care expenses at qualified locations where MasterCard® is accepted. Approved expenses are automatically debited from their Medical or Dependent Care Flexible Spending Accounts, without the necessity of filing claims prior to reimbursement.

Who Benefits from the Flex Debit Card?

Employers:

• Plan participation increases, saving the employer at least 7.65% in FICA taxes for every employee dollar contributed.
• Helps employees better manage cash flow concerns.
• No additional costs after a nominal $150.00 startup fee.

Employees:

• Instant access to Medical and Dependent Care FSA funds, reducing out-of-pocket expenditures.
• Reduces need to file claim forms and documentation prior to reimbursement.
• Charges auto-adjudicated at many merchants.

Important Notes:

• Participants should save their receipts! The IRS requires that participants keep itemized receipts on file in case of audit.
• For expenses not paid with their cards, participants can still submit regular reimbursement claims - the card is just one way to access an FSA.
• Participants' cards will be mailed to their homes.
• Participants' cards will not expire for 2 years, so if they use up their FSA funds during this plan year, they should keep their cards for next plan year.

What are the advantages of the Debit Card?

The Debit Card provides plan participants with the convenience of a "cashless" transaction. Instead of paying for eligible expenses and filing a claim to be reimbursed, the Debit Card pays the expense directly from the participant's Medical or Dependent Care Flexible Spending Account. This eliminates the participant's need to pay for expenses out-of-pocket before they are reimbursed, resulting in greater value from the plan and higher employee participation.

What type of card is it? Will it work anywhere?

The Debit Card is a MasterCard® limited merchant category card. It is designed to work only at merchants that provide flex-eligible expenses or services, such as physician offices, pharmacies, and day care centers. The card will not work at places that typically are not vendors for flex expenses, and it may not be used to receive cash back. There is no PIN for this Debit Card. When given the option between debit and credit, participants should choose credit.

Will participants still need to submit receipts?

Sometimes. The IRS code stipulates that every claim must be adjudicated. However, the IRS has permitted many cases where expenses may be "auto-adjudicated." It's important to remember that even if claims are auto-adjudicated, the IRS requires that participants obtain and keep backup documentation for all expenses.

What expenses can be auto-adjudicated?

Some merchants, such as Wal-Mart and Walgreens, have a system in place which allows the Flex Debit Card to be used only for eligible expenses. If participants use the card at these merchants, they will not need to submit documentation to ProBenefits. For an up-to-date listing of merchants participating in this program, please visit www.ProBenefits.com. At other eligible locations, your group health plan copays or multiples of those copays will be automatically approved. In order for a copay expense to be auto-adjudicated at an eligible provider, two things must be true: 1) You must be enrolled in the group health plan; and 2) The total expense must match the amount of the health plan's copay or copays for that vendor (i.e., prescription copays at a pharmacy, office visit copay at a doctor's office). For example, if Maria uses the debit card at a pharmacy for a prescription copay, the expense will be auto-adjudicated because the card was swiped at a pharmacy and the swipe amount matches her company's health plan copay for prescriptions. However, if Maria purchased some over-the-counter pain relief medication and the prescription with the same swipe of the card, she would later be asked to submit documentation for both expenses because even though both are FSA-eligible, the swipe amount would not match the health plan copay amount. Of course, even though she may have to submit documentation, Maria still benefits because she does not have to pay for the medications out-of-pocket and then wait to be reimbursed. The Debit Card makes transactions cashless, but it does not make all transactions paperless.

How will participants know whether or not to submit receipts?

For every card swipe, participants will receive a series of emails advising them of the status of the claim. The initial email will acknowledge the swipe and the amount. This email is informational and requires no action. The second email will advise whether or not documentation will need to be submitted. If documentation is required, the email should be printed and used as a cover sheet for faxing in the necessary receipt, rather than using a regular claim form. After documentation is submitted, a third email will be sent confirming approval. If the expense is ineligible, the third email will advise the steps necessary to repay the ineligible amount.

What happens if the card is used for an ineligible expense, or if documentation is not submitted when requested?

Participants will be required to repay any ineligible amounts to their employer. In addition, if an expense is eligible but adequate documentation is not provided when requested, participants will be required to repay that amount. If a participant misuses the card or continually fails to submit documentation when requested, his or her card will be deactivated.

How much does the card cost?

To add the debit card to your company's FSA plan, there is a company startup fee of $150.00. There are no additional monthly fees.

What are the prefunding requirements?

You are required to prefund approximately 1-2 months of FSA contributions and keep a minimum balance on hand. This amount is calculated after enrollment.

My company might be interested in providing the debit card for our employees. What do we do now?

Contact your ProBenefits Plan Administrator at (336) 761-1850 or (888) 722-8382 for more information!