FlipBook Test 4

Proposal to Implement

For

GROUP NAME

Flexible Spending Account (FSA)
Dependent Care Account (DCA)
Transit and Parking Account (TRN/PKG)

Introduction to Choice Strategies

Choice Strategies is a Third Party Administrator (TPA) that was founded in 2001 on the premise
of demonstrating to employers how to dramatically reduce healthcare costs while maintaining a
high level of benefits for employees. Choice Strategies administers a wide variety of products
and services that can be customized to meet the financial goals of each employer, while offering
employees the coverage they deserve. Choice Strategies is known for extreme flexibility in plan
design, and over-the-top service for brokers, employers, and employees.

We were the first to offer a debit card-based HRA plan, and we have continued to innovate by
introducing a succession of products, services, and tools that can be easily customized for
employers and employees alike.

Choice Strategies was acquired by WageWorks, a national leader in the consumer-directed
benefits arena, in January 2012. As a division of this nationwide company, we possess added
depth and have access to human and technical resources that allow us to continuously expand
our solution set. WageWorks’ sole focus has been to provide consumer-directed benefit
account solutions to employers of all sizes. Today, WageWorks is the largest independent
administrator in the United States serving over 29,000 employers and over 3.2 million
participants.

Today, Choice Strategies administrative services include:

 Industry leading service and support

 The Choice Strategies debit card for the
payment of providers and other vendors

 Substantiation of card transactions

 Processing of submitted claims

 Claim payments via check or direct
deposit

 Enrollment materials and employee
communications

 Online portal access for employees and employers

 Plan document production

Flexible Spending Accounts (FSA) Optional

A Flexible Spending Account (FSA) is a tax-advantaged plan that an employer can offer as a
voluntary benefit to their employees. Employees can choose to contribute funds pre-tax via
payroll deductions to pay for out-of-pocket IRS-eligible medical expenses, as referenced below.
Typically, an FSA is an employee-funded account, however employers can also choose to
contribute to the employee’s FSA, and take a tax reduction for any of the employer
contributions.

Features of an FSA:

 FSA contributions are tax-deductible for the employer and tax-free for the employee
 FSAs are prefunded by the employer; the employee’s full annual election is available on

the plan start date

 Annual elections can only be changed mid-year if there is a qualifying event

 Employer can now allow up to $500 of unused FSA funds to carry over into the next
plan year (lowers risk for employee - no longer “Use it or Lose it All”)

 Employers offering FSAs must also have an underlying ACA-compliant group health
insurance plan in place

 Only individuals eligible for their employer’s ACA-compliant group health insurance
coverage can be offered an FSA *Note that the employee is not required to be enrolled
in their employer’s group health plan to elect the FSA –the employer just needs to be
offering a group health plan, and the employee has to be eligible for that plan

 Pre-tax employee contributions to FSA are limited to $2,550 for plans effective in 2015

 Health care reform also limits employer contributions to either $500 or an equal match
of the employee election (whichever is greater)

Eligible Expenses – 213(d) ALL IRS:  Orthodontia
 Vision
 In-Network Deductible  Diabetic Testing Supplies
 Co-Pays  Limited Over-the-Counter
 Coinsurance
 Prescriptions (Rx) expenses (OTC medicines
 Out-of-Network Expenses
 Dental require a prescription)

**Employees should elect to contribute FSA funds to pay for predictable out-of-pocket
expenses. If the employee does not utilize their entire FSA election by the end of the plan
year, the employer can choose to offer a Grace Period, a Carryover or neither. With a Grace
Period, employees can continue to incur expenses in the first 2 ½ months of the new plan year,
but use their previous plan year funds. Employers can alternatively offer a Carryover of up to
$500 of unused funds into the new plan year (employer cannot offer both a Grace Period and a
Carryover – it has to be one or the other). Any unused funds remaining will be forfeited to the
employer. The employer will choose whether to offer a Grace Period, a Carryover or neither
when filling out the Master Application.

Dependent Care Accounts (DCA) Optional

A Dependent Care Account (DCA) is an employee-funded account that can be used to pay for
custodial care of eligible dependents while the employee is at work. Eligible dependents include
children ages 13 and under, as well as disabled children, spouse or parents.

Features of a DCA:

 DCA contributions are pre-tax for employer and employees
 DCA contributions are “use it or lose it” for the employee
 “Pay as you go” - not prefunded by the employer, funding becomes available to the

employees as it is contributed through payroll deductions

 Maximum contribution for a household per calendar year is $5,000 if single or married
and filing a joint tax return or $2,500 if married filing separately (per IRS guidelines)

 Elections can only be changed if there is a qualifying event

Employees Save 25% to 40% on Day care Expenses
 Nanny expenses, for services provided inside the home, are eligible to the extent they
are attributable to dependent care expenses and expenses of incidental household
services
 Dependent care expenses incurred for services outside the home provided they are
incurred for the care of a qualifying dependent that regularly spends at least eight hours
per day in the home
 Registration fees to a day care facility are eligible as long as the fees are attributable to
actual care and not described as materials or other fees
 Pre-kindergarten or nursery expenses are eligible even if the school also furnishes
lunch and educational services
 Before- and after-school care through age 12
 Day camp expenses through age 12 are eligible
 Food and incidental expenses (diapers, activities, etc.) may be eligible, if part of
dependent care charge
 Expenses paid to a relative, e.g. child, parent, or grandparent of participant, are eligible.
However, the relative cannot be under age 19 or a tax dependent of the participant.

Why add an FSA or DCA?

Employer Savings with FSAs and DCAs:

In the example, to the right, an
employer offers an FSA and DCA
benefit and employees elect to
contribute $32,500 pre-tax.
The employer does not have to
pay the 7.65% payroll tax on the
employee contributions. This leads to an annual tax
savings of $2486.25. After paying a year’s worth of
Choice Strategies administration fees, the employer
saves a total of $1084.25.

Employee Savings with FSAs and DCAs:

With FSAs and DCAs,
employees receive
considerable tax savings.
In the example to the left,
an employee elects to
contribute $1800 into a
FSA and $3600 into a
DCA annually. With an
approximate federal tax
rate of 20% and state
income tax of 7%, the
employee would save
more than $1500 annually
by using the FSA and
DCA plans rather than
post-tax dollars.

FSA and DCA plans can be administered via:

 Claim Submission – Employees can submit a claim online, via mobile app or via a paper
form. Choice Strategies will process the claim and send the correct payment to either the
employee or the care provider, at the member’s request.

 Debit Card - Employees can pay some dependent care providers with their Choice Strategies
debit card.

Transit and Parking Accounts (TRN/PKG) Optional

A Transit and Parking Account is a tax-advantaged plan that is funded by employees or
employers, to be used to pay for eligible commuter-related expenses. Using pre-tax dollars to
pay for the expenses to commute increases employees’ take-home pay, and reduces the tax
liability to the employer.

Features of a Transit and Parking Account:

 Transit and Parking Account contributions are pre-tax for employer and employees
 The 2015 indexed maximum contribution amount is $130 per month for Transit, and $250

per month for Parking
 “Pay as you go” - not prefunded by the employer, funding becomes available to the

employee as it is contributed through payroll deductions
 Payroll elections for Parking and Transit Accounts can start, stop or change at the

employee’s discretion
 Dependents are not eligible – the employee is the only person eligible for Transit or

Parking expenses
 Funds can be rolled over year-to-year. Unlike an FSA, employees do not lose unused

funds in the account.

Eligible Expenses:

Transit expenses are eligible if they are used for transportation to work.

 Metro Cards
 Commuter Rail
 Bus or Subway vouchers
 Ferry Passes
 Vanpool

**Tolls, Gas or other driving-related costs are not eligible expenses

Parking expenses are eligible if they are work-related. This includes parking at work or
near a location from which the employee commutes to work.

 Monthly or Daily Parking
 Metered Parking
 Parking at a Mass Transit Facility

**Parking for business meetings, parking reimbursed by the company and parking costs
already deducted from employee’s paycheck are not eligible expenses.

Transit and Parking plans can be administered via:

 Claim Submission – Employees can submit a claim online, via mobile app or via a paper
form. Choice Strategies will process the claim and send the correct payment to the employee.

 Debit Card - Employees can pay for their eligible expenses at the point of sale, when
applicable, with their Choice Strategies debit card.

Operation and Functionality of the Choice Strategies Plan

Plan Start-Up Process (Implementation)

There are three main components to implementing a new plan with Choice Strategies: the
Master Application, the ACH Authorization Form and the employee enrollment information.

1. Master Application

The Master Application is used to collect information about what plans the employer would
like to implement, and how the employer would like the plan designed and administered. The
employer can complete the application electronically or by filling out a paper application.
Information collected on the application includes:

 Contact information
 Administrator contacts for the employer
 Eligibility information
 Plans to be offered
 Funding amounts
 Eligible expenses

2. ACH Authorization

Choice Strategies bills the initial setup fees, monthly administrative fees and annual renewal
costs by debiting the designated employer bank account. The same account or a different
bank account can be set up to be debited for the utilization of the employee’s individual
accounts.
The ACH Authorization can be filled out as part of the Master Application or by completing a
separate paper form and submitting it to Choice Strategies by email, fax or mail.

3. Employee Enrollments

In order to set up individual accounts for each of the employees, and keep the plan in
compliance, Choice Strategies needs information from each participating employee and any
dependents that will be participating in their plans. Enrollment information can be provided to
Choice Strategies via our Enrollment Template.

All implementation documents can be sent via the following methods:
 Email : [email protected]
 Fax : 1-888-4156471
 Mail : Choice Strategies
P.O. Box 2205
South Burlington VT 05407

When Choice Strategies receives the Master Application, a confirmation email from the
Implementation Department is sent to the employer and producing broker.

Plan Configuration and Plan Document Creation

Choice Strategies plans will be configured and plan documents created based on employer
decisions indicated on the Master Application.

Plan Documents Include:
 Adoption Agreement (Outline)
 Plan Document - for employer reference
 Summary Plan Description - to hand out to all participants
 HIPAA Privacy Notice

During the implementation/set-up process, plan documents will be created and uploaded to a
secure online Administrative Guide. This Admin Guide will be a central location where plan
documents, amendments, invoices and helpful employee forms and audio-visual presentations
can be accessed at any time by the employer or broker.

Once implementation is complete, employers and brokers will receive an email containing
contact information for their Client Service Account Manager or Regional Team as well as the
secure login information for administrative access to the employer’s Admin Guide.

Enrollment Process

Once Choice Strategies receives the initial enrollment forms or templates, employee accounts
are established in our system and Choice Strategies debit cards will be produced and mailed to
each participating employee and spouse (if applicable). Cards come in plain white envelopes
and are mailed with a welcome letter to the employee’s home mailing address by default. The
Choice Strategies debit card is activated upon first use.

After initial implementation, the employer contacts/administrators can provide future
enrollments, changes in status or employee terminations to Choice Strategies via our
eligibility e-forms. A link to the forms can be found at http://www.choice-
strategies.com/forms-2.

If the employer is unable to access the internet, or has a large amount of enrollments or
changes, eligibility information can also be sent via our enrollment template to:

 Email: [email protected]
 Fax : 1-888-415-6471
 Mail : Choice Strategies

P.O. Box 2205
South Burlington VT 05407

Online Open Enrollment:

At plan renewal, employees that have, or are planning to
add an FSA, DCA, Transit or Parking account will be able
to easily enroll online and enter their payroll elections
during the Open Enrollment period. Online Open
Enrollment at renewal is now the default for most FSA,
DCA, Transit and Parking plans. Groups may alternatively
choose paper enrollment or auto-renewal upon request, if
enrolling online is not convenient for their employees.

To enroll online, employees will only need internet
access and an Employer ID which is created upon
the group setup. Employers will be provided a
resource handout to share with their employees
that can be customized with the group plan
information. The handout also includes links to a
step-by-step video walking them through the online
enrollment process.

At the close of open enrollment, employers will receive an email notification at which time they
can run the appropriate payroll reports (using instructions provided).

While Online Open Enrollment is not standard for new groups, it may be available upon request
at implementation for select groups that have sent in a completed application a minimum of 2-3
months before their plan’s effective date. Availability will be determined dependent on timely
receipt of all necessary documentation and timeframe available before the plan’s effective date
– please submit your request at time of application.

Debit Card Functionality

Choice Strategies offers a convenient, vendor-specific
MasterCard for employees to access their plan(s) funding.
The Choice Strategies debit card can contain multiple plans
on one card by designating merchant category codes that
are eligible on a specific plan and placing priority on which
account should pull first.

Each credit card machine has a specific code associated with what industry that business is in.
For example, a Shoe Store is considered “Retail”, a Lawyer is considered “Legal Services”, a
Doctor’s office, is considered “Doctor’s Office,” and a Hospital is coded as “Hospital.” Choice
Strategies limits the open codes on each of the plans, based on what eligible expenses the
Employer designates. Limiting the credit card codes prevents employees from using the card at
non-eligible facilities, such as a gas station or restaurant.

Choice Strategies will automatically issue debit cards to each participating employee and
spouse (if applicable) If an employee needs an additional debit card for another dependent on
the account, such as a college-aged child, the employee can contact Member Services to
request an additional card at no charge. The employee, spouse and dependent(s) cards pull
from the same balance and can be used for any eligible participant on the plan, regardless of
the name on the individual debit card.

Substantiation and Adjudication Process

The IRS stipulates that the plan sponsor (employer) ensure that plans are properly
substantiated. In other words, purchases made with Choice Strategies debit card must be
proven to be eligible under the plan.

Choice Strategies substantiates purchases made with Choice Strategies debit card via the
following methods:

 IIAS (Inventory Information Approval System)
Under this inventory control system merchants such as grocery stores, discount stores,
pharmacies, department stores, etc. must be able to differentiate between eligible and ineligible
items at the point of purchase. Simply put, Choice Strategies debit card only works for eligible
prescriptions and limited OTC purchases at participating retailers. Ineligible purchases will be
denied at the cash register. This system eliminates the need to request receipts for point of sale
pharmacy purchases.

 Co-Pay Matching
The Choice Strategies debit card can be set to match the co-pay(s) of the underlying health plan
design. Requests for documentation are not generated for transactions in which co-pays have
been matched as the expense has been deemed substantiated.

 Request for Documentation Process
Requests for Documentation, also called receipt requests, are generated and sent to employees
for those transactions that cannot be substantiated through other listed methods. Employees
are requested to provide the necessary documentation (generally Explanations of Benefit (EOB)
or provider statements) for substantiation of transactions and/or claims.

 Substantiation Service
Choice Strategies offers a voluntary substantiation service to all employees that will help to limit
the number of documentation requests sent to employees for medical transactions on their
Choice Strategies. Through this voluntary service, employees grant Choice Strategies access to
review their health insurance account online. When a transaction occurs or a claim is
submitted, Choice Strategies logs in to the employee’s online insurance account and views the
information necessary to substantiate the medical services paid for with the card.
Documentation is not requested for these transactions if the information from the health plan
matches the transaction and if the services are eligible under the plan.

 Enforcement of Substantiation Requirements
Occasionally an employee will disregard receipt requests or forget to send in requested
documentation. To protect employer money and keep the plan in compliance, employees’
Choice Strategies debit cards are automatically deactivated in cases in which participants do
not send in requested documentation after multiple requests. The cards are reactivated upon
receipt of requested documentation. Employers may choose to waive the card deactivation
feature on a plan-wide level on the Master Application; however, employers should note that in
the event of an IRS audit the plan may be found to be non-compliant. Employers can also
contact their client service team to reactivate a specific employee’s card at any time.

Claims Submission

Employers can choose whether to offer a debit-card based plan or require employees to submit
claims for reimbursement instead of having access to a debit card. Even with Choice Strategies
debit card-based plans, some members choose to submit claims for reimbursement rather than
use the debit card.

How Employees Submit Claims for Reimbursement

Claim forms are available on our website or if an employee does not have internet access, they
can contact Member Services to have a claim form mailed to their home address.
Employees can submit claims and documentation:

 Online: www.choice-strategies.com by logging into their online account
 Mobile App: claims can be submitted via mobile devices or tablets
 Email : [email protected]
 Fax : 1-888-415-6471
 Mail : Choice Strategies

P.O. Box 2205
South Burlington VT 05407
Employees can be reimbursed for submitted claims via:
 Direct Deposit / Electric Fund Transfer (EFT) – Direct Deposit information provided
through the employee’s online account
 Check – made out and mailed to the employee
 Check – made out and mailed to the provider (this option available for online submission only)

Average processing time for submitted claims is 2 business days from receipt.

Service

Choice Strategies is known for our commitment to exceptional service and constant innovation
to provide the best resources to all our constituents: brokers, employers and employees.

Client Services
Choice Strategies Client Service teams are an excellent
resource for employers and brokers. Client Service
representatives answer employer and broker questions
about existing plan designs, day-to-day plan
administration and compliance concerns, questions about
reporting and invoicing, new hire and termination inquiries
and much more.

Choice Strategies Client Service Department is split into
regional teams to best serve each employer/client and
provide a personalized experience.

Training Department
Choice Strategies offers new employer training webinars to review employer online resources,
how to generate a report, where invoices are located, new employee enrollment forms and how
to terminate an employee from the Choice Strategies Plan among other helpful topics. To view
the webinar schedule or request a webinar, employers can go to www.choice-strategies.com to
the Employer tab and check the Employer Education Center or contact Client Services for more
information.
At the employer’s request, the Training Department also develops plan-specific webinars that
can be scheduled for employees at enrollment or any time during the plan year. Plan-specific
webinars can be a great educational resource for employers and employees.

Member Services
Choice Strategies prides itself on exceeding all service expectations for our employer clients
and employee members. Our Member Service team receives extensive on-going training in
multiple internal Choice Strategies departments, as well as training on the most recent
healthcare changes.

Choice Strategies Member Service Representatives answer a wide variety of questions
anywhere from basic balance and forgotten passwords to resolving claim denials, or ineligible
expense refunds. Member Service Representatives are strong patient advocates, and will
conference call a provider or carrier with the member to help educate all parties, and resolve a
situation for the member.

Member Help is available:

 24/7: Members can access account balance, card status and order
replacement cards 24/7 through IVR (Interactive Voice Response)

 Phone: 1-888-278-2555 #2 Mon – Fri 8am-8pm EST
o Assistance is available in more than 200 languages

Online tools

Choice Strategies recognizes the importance of education for all of our constituents and strives
to offer the most comprehensive suite of tools and resources in the industry.

Website
Choice Strategies’ website www.choice-strategies.com is an excellent resource for employers,
employees, and any of their participating family members.

Website resources include:
 Extensive FAQs
 Interactive Videos
 Eligible Expense Search Engines
 Savings Tools and Calculators
 Helpful links and forms
 Audio-Visual Presentations such as
“How to Submit a Claim Online” or
“How to Create an Online Account
with Choice Strategies”

Employer Portal
Each employer contact/administrator can access specific account information at any time.

Employers have password protected access to:
 General Account Information
 Employee Account Status
 Employee Account Balances
 Plan Documents
 Invoices
 Employer Funding Report
 Enrollee Account Balance Report – This report indicates YTD usage on employer plan(s)

The employer contact/administrator can use the online reporting system to generate other
reports on an as-needed basis.

Member Portal
Each employee can set up their individual online account to manage their Choice Strategies
plans at www.choice-strategies.com.

Employees will need the following information to set up their online account:
 Employee First and Last Name
 Social Security # (referred to as Employee ID)
 Choice Strategies Card # or Employer ID (provided to the employer at installation)

Once employees set up an online account, they will have a User ID and Password. The
employee will also have the opportunity to provide answers to security questions in the instance
that they forget their password in the future.

Through their online account, employees can:
 Check Account Balances
 Submit Claims Online
 View Transaction History
 Upload Documentation
 Change Direct Deposit Information

Mobile App
Available for iOS (Apple) and Android-enabled mobile devices and tablets, the Choice
Strategies app can be downloaded free of charge. Members can create an account, check
account balances, view recent transactions, submit claims and upload a receipt or supporting
documentation.

Administration Fees

Fees are based on the number of participating employees as outlined in our Fee Schedule:
Initial Setup Fee (All Plans):

Setup Fee for All Plans $250 plus $3.00 per employee

Monthly Administration Fee: Per Enrolled Employee

FSA / DCA / TRN / PKG Plans $5.25

Plan Changes and Renewal:

Renewal Fee $100 plus $3.00 per employee

The following are Included with Plans at No Additional Fee:

 Dependents are included in all applicable plans at no additional cost
 Full-Time Dedicated Compliance Team
 Plan Documents
 Plan Amendments / Updates
 Summary Plan Description (SPD)
 Non-Discrimination Testing (up to 3 times per year, as requested by employer)
 Debit Cards / Replacement Debit Cards
 Electronic Enrollment Materials
 Employer and Employee Custom Webinar Training Sessions
 24/7 Employer Web Portal Access (Account Information, Plan Documents, Invoices, Reports, Resources)
 24/7 Employee Web Portal Access (Account Information, Claim Submission, Training Videos, Resources)
 Mobile App
 Client Services Dedicated Regional Account Team
 Member Service Assistance via phone and IVR
 Multilingual Language Line, allowing for Member assistance in more than 200 different languages
 Plan Substantiation Service

For More Information

Thank you for considering Choice Strategies for your tax-advantaged plan administration needs.

If you have any additional questions or concerns after reviewing the above document, please do
not hesitate to contact:

Debbie Dillenschneider, CBC
SMB Sales Executive
Choice Strategies: 888-278-2555 | Direct: 856.912.7442 | Fax: 888.415.6471
Email: [email protected]