Frequently Asked Questions
SECTION 125 FLEXIBLE SPENDING ACCOUNTS
Health Care Reimbursement Accounts
Please see our Eligible Expense Sheet for some common examples or contact your plan administrator for specific information.
There can be many reasons why a claim was denied, but most of them are due to insufficient documentation or not being an eligible expense. Some of the common denial letters are:
Need Detailed receipt / Cannot Accept Credit Card Receipts / Cannot Accept Balance Forward Statements / Missing Receipt
All claims must be accompanied by the documentation from the service provider. Unfortunately the IRS does not allow credit card receipt, cancelled checks, or balance forward statements to be sufficient documentation. All documentation must show:
- Name and address of the service provider
- Date service/expense was incurred
- Name of the person for whom the service/expense was provided
- Detailed description of the service/expense provided
- Amount charged for the service
Invalid date / Service prior to the effective date / Service not within the Plan Year
All claims must show that the service / expense was incurred during your company’s plan year. If the service was incurred prior to the plan year’s effective date, or after the end of the plan year, the expense will be ineligible to be reimbursed.
Not a covered item / service
The expense you are trying to submit was deemed to be ineligible for reimbursement. Please review the eligible/ineligible expense sheet for common expense examples.
Needs an MD note listing medical condition
Certain expenses can be determined to be eligible in the event of a Doctor’s diagnosis to treat a medical condition. Common expenses can include health club memberships, over the counter medications, certain vitamins and supplements, air purification equipment, and massage therapy. Please review the eligible/ineligible expense sheet for common expense examples and contact your ABS account manager to verify eligibility for a medical condition.
In excess of annual election
You have your depleted the funds in your HCR or DCR account. Often when submitting the last claim of the year, if the expense is greater than your remaining balance, we will reimburse only up to what remains in your account.
Amount paid prior to roll over
A portion of the claim was applied to the previous plan year. If your company has a grace period, when submitting a claim during the grace period your can have a portion of the claim applied to the previous year to deplete the remaining funds, and apply the remainder of the claim on the current plan year. In such a case, we will deny a portion of the claim for the previous plan year for being in excess of the annual election, and deny a portion of the claim for the new plan year for being paid prior to roll over. This is normal, and just to inform you of how the balance of the claim was applied to both plan years.
Your spouse, child/ren or adopted child/ren under the age of 27, and any other IRS tax dependents under your care.
Only under certain medical conditions, such as a seeing eye dog, can animal expenses be eligible for reimbursement. Expenses for family pets are not eligible. Please contact your ABS account manager for more information.
Always keep the original documentation and submit copies to ABS for reimbursement. After submitting to ABS, keep your original documentation organized by plan year with your tax records. ABS does not maintain an ongoing file of your processed receipts.
No, your tax savings is automatically included in your W-2 issued to your by your employer. By setting aside that money pre-tax, you are reporting less gross income on your tax return, allowing you to save about 30% for every dollar deducted. However, you should save all receipts in your own tax files in the case of an audit should the documentation be requested.
Sometimes a tax preparing software or service may ask about a Medical Savings Account, or MSA, which is a separate program and should not be confused with a Flexible Spending Account.
There is no minimum amount to submit for a claim, however, reimbursements will be pended until a minimum of $20 is met, with the exception being the final reimbursement to close out the account.
The last day to incur an expense is the last day of the plan year. Certain plans may have a grace period that extends the time-frame to incur claims by an additional 2 and 1/2 months, check your plan documents to see if it applies to your plan.
The final day to submit for reimbursement is 90 days after the end of the plan year.
Once enrolled, your election cannot be changed until the following plan year, unless you have a qualifying event that can allow a mid-year change to your election. Eligible qualifying events are limited to:
- The birth or adoption of a child
- Marriage, divorce, or legal separation
- Death of a spouse
- Termination of your or your spouse’s employment
- Change of your or your spouse’s employment status from full-time to part-time or vice versa, or if either of you take an unpaid leave of absence from work.
The Benefits Debit Card is offered by some employers and allows you to pay at the point of service with your FSA Account by simply swiping the card, eliminating the reimbursement process (though it is still necessary to save receipts). The Benefits Debit Card works at doctor’s offices, pharmacies, dental clinics, vision centers, hospitals, and even mass merchants.
Please see our Benefits Debit Card Frequently Asked Questions for more information.
Limited Health Care Reimbursement Accounts
A Limited Health Care Reimbursement Account is a type of medical FSA plan which works in conjunction with a Health Savings Account, or HSA. If you are enrolled in a High Deductible Health Plan and have an HSA with a banking institution, the IRS prevents you from simultaneously enrolling in a full Health Care Reimbursement Account with your employer.
However, a Limited account allows you to be reimbursed for dental and vision expenses, while using your HSA for any out of pocket medical expenses. This is an ideal combo if you are trying to save most of your HSA for retirement, but you are maxing out how much you can contribute in a given plan year. Plus, unlike the HSAs, a Limited HCR is prefunded at the beginning of the plan year, making them ideal for budgeting big ticket expenses like LASIK surgery or Orthodontia.
Furthermore, when you reach the IRS minimum on your health plan’s deductible, your Limited FSA can be converted to a full Healthcare Reimbursement Account, allowing you to use it for all of your eligible medical expenses incurred after that date for the remainder of the year, and thereby allowing you to grow your HSA balance.
Limited accounts restricted to dental, vision, and some preventive care expenses with a doctor’s note.
- Dental Treatment
- Denture Adhesive & Cleaners
- Vision Correction
- Lasik Surgery
- Eye Exams
- Prescription Glasses
- Contact Lenses
- Contact Lens Solution
- Eye Drops
Only if you have met the IRS minimum on your health plan’s deductible, then you can convert your Limited account into a full Flexible Spending account. Once you meet this portion of your annual deductible on your medical plan, simply submit to ABS the insurance documentation you have (typically an Explanation of Benefits, or EOB) that clearly shows the date the expense was incurred. You will then be able to submit any medical expenses that are incurred after that date for the rest of the plan year.
If you are enrolled in both an Health Savings Account and a Limited Healthcare Reimbursement Account, you will probably want to use your Limited HCR first whenever possible on this year’s expenses, and keep accumulating a balance in your HSA for future use. You can budget all of your annual dental, vision and medical expenses over the IRS minimum deductible for your Limited HCR.
Once you submit your insurance documentation to ABS showing you met the IRS minimum on the deductible, your ABS account manager will allow you to submit for medical reimbursement. However, if you have a Benefits Debit Card from your employer, unfortunately the card will still be limited to Dental and Vision expenses. Medical reimbursements will have to be reimbursed manually with a Health Care Reimbursement Form and a copy of the receipt or Explanation of Benefits.
Dependent Care Accounts
Daycare and childcare, preschool, before and after school programs, and even summer camps, as long as the care is being provided for employment purposes. In the event of an overnight camp, the day time portion of the fee would be eligible but not the overnight portion. Children must be under the age of 13 to be eligible.
Only in the event that they are an IRS tax dependent. You should consult a tax attorney to establish IRS eligibility guidelines. If you are declaring them as a dependent on your tax return, and they are mentally or physically unable to take care of themselves, you may use your Dependent Care Account for adult day care.
Only tuition for preschool can be an eligible expense. Tuition for a primary school is not eligible.
Yes, as long as they are reporting this as income on their taxes. Their Tax ID number or Social Security Number may be required for reimbursement and subject to audit by the IRS.
Dependent Care Accounts are “pay to balance”, which means we will only reimburse what has been deducted so far from your salary. Anything in excess of your current balance will be pended for automatic reimbursement as soon as you have your next payroll deduction. In this way, you can submit expenses for your entire election as you incur the expenses, and will automatically receive tax free reimbursements from ABS as we receive your payroll deductions.
When you check your ABS personal account, you will see two balances applicable to your account. The first labeled “remaining claims balance” shows you how much remaining you need to spend for the total plan year. The second labeled “Account balance” shows the funds that are available for immediate reimbursement.
If you have the same weekly or monthly recurring expense from a daycare provider, you will probably find it easier to fill out and submit one form per year versus submitting the same weekly or monthly expense claim in order to be reimbursed.
Simply fill out the Automatic Dependent Care Reimbursement Affidavit form. Please remember that you can only use this option if you have a consistent amount of dependent care expenses during the plan year and you plan on using the same day care provider during the entire plan year.
Have your daycare provider sign the affidavit and provide a receipt or statement of services.
If there are any changes with the providers or in payment amounts during the plan year, you must notify ABS immediately.
Yes, for Dependent Care Accounts we can consider a significant change in expense to be a qualifying event to adjust your election or remove yourself from the program. Just contact your Human Resources department within 30 days of the qualifying event.
Not having any current expenses is deemed ineligible to enroll, but the birth of a child is considered a qualifying event to enroll in the program mid-plan year.
The IRS maximum election is $5,000 per family. As long as the two elections combined do not exceed the $5,000 family maximum, both spouses can enroll in a Dependent Care Account.
If you are married and filing jointly, you may elect up to the full $5,000 if your spouse is not participating in a Dependent Care Account.
If you are married but filing separately, the maximum you can elect is $2,500 for each spouse, regardless if the other spouse is enrolled or not.
If you are single, you may elect up to the full $5,000 annual maximum.
No, your Benefits Debit Card is only available for the Health Care Reimbursement Accounts. Dependent Care Account claims will have to be submitted manually for reimbursement with the HCR / DCR Reimbursement Form.
Transit And Parking Accounts
>Any public transportation costs associated with commuting to and from work. This can include bus fares, subway tickets, train tickets, ferries, and vanpool rides (must have 6 or more riders). Costs associated with private transportation: such as taxis or tollbooths, are not eligible for reimbursement.
Parking costs at public transportation centers will fall under a Parking Reimbursement Account. Train expenses would fall under a Transit Reimbursement Account. You should enroll in both plans to cover both expenses.
The most common reason is that Transit Accounts are “pay to balance”, and thus your claim may have been accepted, but we are still waiting on the transit deductions from your payroll. It can take up to a week for the money deducted from your paycheck to show up in your ABS account. In the meantime, we have pended your claim for reimbursement and you will receive your check or direct deposit as soon as ABS processes the funds.
The Transit and Parking accounts each have a monthly maximum of expenses that can be reimbursed. The 2021 IRS maximum is $270 for Transit accounts and $270 for Parking Accounts. These maximums are subject to change in the event of periodic legislative updates.
Fortunately, funds in the Transit and Parking accounts can both roll over into the next plan year, as long as you re-enroll in the plan for the following year. However, since there is a monthly maximum that can be reimbursed, please consider the funds that will roll into the new plan year when electing for your new payroll deduction.
Yes, the Transit/Parking accounts are a monthly election, so you should elect what your current month’s expenses are for transit and parking. If you would like to join the plan or adjust your election, contact your employer’s HR team to fill out a new enrollment form.
Transit & Parking Reimbursement formand attach the Section 132 Customer Receipt form as your documentation.
SECTION 105 HEALTH REIMBURSEMENT ARRANGEMENTS
An HRA is an employer-funded plan that can be used to reimburse eligible out of pocket medical expenses, typically associated with a deductible on a group health plan. Your employer has elected a specific dollar amount (either monthly or annually) to fund your account and has listed specific medical expenses they will reimburse you for. Please see your employer’s Summary Plan Description for more specific information related to your benefit.
ABS has provided your company with a Reimbursement Form specific to your plan. This form will highlight what expenses your company has agreed to reimburse you, and will have a section to fill out with your medical documentation (typically the Explanation of Benefits from your insurance company) for reimbursement. Please contact your company’s HR team or your ABS account manager for this form.
Simply login to your personal account on the homepage of the employee portal by clicking the Icon that says “access your personal account”. If it is your first time logging in, you will login with your social security number (or if applicable, your employee ID number prefaced with zeros so you have a total of 9 digits) and the 4 digit pin you were assigned at the beginning of your plan. If you have forgotten your username and password or your original 4 digit pin, you may request to have your account reset by contacting customer service.
No, all reimbursements are tax- free, and do not need to be reported for end of the year filing purposes.
When you are enrolled in both an HRA/105 and an FSA, ABS will automatically process your reimbursements against the applicable account based on your plan design. The entire claim must be processed at the time of entry. We cannot process only a portion of a claim.