Edgecombe County, NC | Plan Year: August 1, 2008 to July 31, 2009

Flexible Benefits       Helpful Tools & Calculators   Gilsbar Health Care Account   Gilsbar Debit Card   Gilsbar Dependent Care Account         Gilsbar Contact                             Please call your Personnel Office for all questions concerning this plan.

Spending Accounts |  Accident   |  Cancer Plan  |  Short Term Disability  |  Dental Long Term Disability  | Term Life  |  Whole Life  |  Vision  |  Health Care

• Health Care Flexible Spending Account Maximum: $2,000
• Health Care Flexible Spending Account Minimum: $240
• Run Off Period: 90 days following the end of the plan year to file for services rendered during the plan year
• Waiting period: Employees can apply during the Annual Enrollment

REMINDER: Participants should keep all of their receipts for the entire plan year in the event that Gilsbar ask for documentation or the IRS requests a copy of the receipt.

Flexible Spending Accounts allow you to use pre-taxed dollars toward health care expenses such as prescription and over-the-counter medication, certain medical procedures, copays and more. With Flexible Spending Accounts (FSA), you can save a significant amount of money on your health and day care expenses using a Health Care and/or Dependent Care Flexible Spending Account (FSA). The frequently asked FSA question below will help you understand how to make the most of this program.

General questions regarding Health Care and Dependent Care Accounts

What is an FSA?
Provided by you employer, an FSA is a reimbursement account that allows you to set aside a certain amount of each paycheck, pre-tax, to help pay for your out-of-pocket medical expenses and/or dependent day care expenses. The amount you elect is deducted from gross earnings before federal and state taxes are calculated.
By using your FSA to pay for qualified expenses you save on income tax... which means your take home pay increases.

Will I pay taxes on the money I set aside?
No. FSA contributions and reimbursements are exempt from Federal Income taxes, Social Security (FICA) taxes, and in most cases state income taxes.

What kind of savings can I realize by participating in this program?
Actual savings depends on your tax bracket, but most people will save about 30% on their eligible health care and dependent care expenses.

Can I submit expenses I incurred before the beginning of the plan year?
No. Only expenses incurred during the plan year and while you are a participant are eligible for reimbursement.

How long do I have to file a claim with Gilsbar after the plan year ends?
You have a grace period (90 days) after the end of the plan year to submit expenses incurred during the plan year.

Can i change the amount of my election(s) in the FSA program during the plan year? (i.e. my glasses cost more than i anticipated, I miscalculated my daycare expenses for the year)
Generally, you may not change your FSA elections during the Plan Year. However, you my change during the annual enrollment period for the coming Plan Year
There is an exception to this rule: you may change or revoke your deferral rate in the FSA if you have a Change in Dependent Status. Examples of a qualifying status change may include:

• Marriage, divorce, or legal separation
• Birth, adoption or placement for adoption of a child
• Death of a dependent or spouse
• Change in employment status of yourself or your spouse
• A significant change caused by a third party in the cost of your dependent care coverage

If I terminate employment, or participation in the FSA, what happens to the money left in my account(s)?
You will be reimbursed for the expenses incurred prior to your termination date, and submitted within the termination grace period. Any money remaining in your account(s) after the grace period will be forfeited.

Can I view my FSA balances online?
Yes! Visit myGilsbar.com and login to access claims information and FSA balances online. Once you are logged in, select the "Reimbursement Account Center" link on the left side of the screen to view you account balances. If you are new to myGilsbar, complete the brief site registration to login. You will need your group number (found on your ID card), social security number, and a valid email address to complete the section.

What if I have a question?
If you have any question regarding your account balances, claim reimbursement or eligible expenses, you can access your account information at myGilsbar.com or your can call our Customer Contact Center at 1-800-445-7227 ext 883.

How does participating in a FSA save me money?
The following example illustrates how a FSA saves you money. This example shows the per period savings for an employee on a bi-weekly payroll, with a tax status of "single" with one exemption:

Medical Reimbursement Account
The Health Care FSA is simple! Provided by your employer, a Health Care FSA is a reimbursement account that you to aside a certain amount of each paycheck, pre-tax, to help you pay for your out-of-pocket medical expenses. The amount you elect is deducted from gross earnings before federal and state taxes are calculated. By using your FSA to pay qualified medical expenses you save on income tax... which means your take home pay increases.

How does the Health Care FSA work?
With a Health Care FSA, you must decide on your contribution amount at the beginning of the plan year. The amount you designate will be equally divided between pay periods. To estimate the out-of-pocket expenses the you, your spouse, and your dependents may incur, consider any standard co-pays, prescription, office visits and over-the-counter medications and planned medical expenses, i.e. braces or LASIK eye surgery.

The IRS requires you to forfeit any money that is left in the FSA at the end of the year. Generally, it is better to underestimate the expenses and pay a little extra tax than to overestimate expenses and forfeit money. To help avoid forfeitures, you will receive a notice of you balance prior to the end of the each plan year.

You can access balance information online 24/7 via myGilsbar.com. Select the "Reimbursement Account Center" link on the left side of the screen to view your balances. Once you decide how much you want to contribute each paycheck, the money is automatically deposited into your account. As you incur eligible expenses, fax your completed claim form and receipts to Gilsbar for reimbursment.

What is eligible for reimbursement under the Health Care FSA?
Eligible health care expenses my include deductibles, co-payments and amounts over the maximum your health plan pays, expenses for routine physicals and other expenses not covered by your health plan. For more complete list please refer to the "Qualified Medical Expenses Eligible for Reimbursement" list.

How do I get reimbursed?
For reimbursement of expenses covered under a health care plan:

• Ensure your expenses are submitted to your health carrier
• If you also have coverage through a spousal plan, you must submit your expenses to both carriers before you submit your expenses for FSA reimbursement
• Once processed by your health carrier(s), complete the Health Care Expense Claim form and attach a copy of the "Explanation of Benefits" showing the unpaid expenses
• For reimbursement of expenses not covered under a health care plan, ex. over-the-counter medicines
• Complete the Health Care Expenses claim form and attach itemized bill for the expenses

FAX CLAIMS AND PROOF OF EXPENSE TO 866-635-1329 FOR PROCESSING.

How much will be reimbursed?
When you submit a health care expense, you will be reimbursed for eligible expenses claims up to the maximum amount you elected for the plan year minus any previous reimbursements.

Can i use my Health Care FSA for my family's expenses?
Eligible health care expense incurred by you, your spouse, or any dependent that you claim on your income tax return are allowable for reimbursement.

If I don't have any medical insurance through my company, can I still participate in the Health Care FSA?
Yes. Out-of-pocket expenses for you and your dependents are eligible for remibursement whether or not you are insured through your company. Health related expenses are reimbursable for your dependents, if you claim them as a dependent on you income tax returns (this definition of a dependent my be different than that used for your health insurance plan).

Is there anything I have to keep in mind when it comes time to file my taxes?
Expenses payable through your benefits program (or your spouse's, if applicable) are not eligible for reimbursement under the Health Care FSA. In addition, expenses reimbursed through your Health Care FSA cannot be claimed as a deduction on you income taxes.

I am covered under both my health insurance plan and my spouse's. Do I have to submit medical expenses to both plans before i can file for reimbursement for my Health Care FSA?
Yes. IRS regulations do not permit reimbursement of expenses through the FSA that would otherwise be covered under your health insurance plan. Expenses should first be submitted to your health insurance plan(s), then send any remaining unpaid claims to Gilsbar.

If I have a question about my account, what should I do?
If you have any questions, you can access your account information 24/7 at www.myGilsbar.com, or you can call Gilsbar's Customer Contact Center at 1-800-445-7227 ext 883. This following is brief summary of information and is intended to serve as a quick reference to help determine whether or not an expense may be eligible for reimbursement. This list is not all-inclusive. This information is not tax advice. Tax advice should be obtained from a professional tax advisior

Qualified Medical Expenses Eligible for ReImbursement

.Expenses Not Eligible for Reimbursement

Over-the-counter List

Flex Debit Card

Beginning January 1, 2008, new IRS rules have simplified the use of Flex Debit Cards. These rules now require drugstores and supermarkets to identify FSA-eligible items at the checkout and require the drugstore or supermarket to only use the card for FSA eligible items. This means than you can use your card at participating stores that offer this feature for the total FSA-eligible amount and NO receipts are needed to verify the eligiblity of the purchase! And of course, you can continue to use your card at pharmacies and other health care providers.

Please visit http://www.sig-is.org/imwp/download.asp?ContentID=12418 for the latest list of participating merchants.

Here is an example:
You have been purchasing prescriptions at a pharmacy in a local supermarket using your card during 2007. On January 5, 2008, you go to the store to pick up a prescription. If the store is has not made change required by the IRS to identify FSA-eligible items, your card my be declined at the point of purchase. In this case, you can transfer your prescriptions to a pharmacy in a participating discount store or supermarket, or to a freestanding pharmacy, or simply continue to turn in your paper receipts for reimbursement as you have prevously.

Important point to remember:
If you use your Card on or after January 1, 2008 in a discount store or supermarket that is not participating - even if you purchased FSA-eligible items on in the store to January 1, 2008, your Card may decline.

Here's how your Flex Card works at participating stores:

1. Bring prescriptions and vision products, OTCs and other purchases to the register at checkout to let the clerk ring them up.
2. Present your Card and swipe if for payment.
3. if the Card swipe transaction is approved (e.g., there are sufficient funds in the account and at least some of the purchases are FSA eligible), the amount of the FSA-eligible purchases is deducted from the account balance and no receipt follow up is required. The clerk will then ask for another form of payment for the non-FSA-eligible items.
4. If the Card swipe transaction is declined, the clerk will ask for another form of payment for the total amount of the purchases.
5. The receipt will identify the FSA-eligible items and may also show a subtotal of the FSA-eligible purchases.

How does the FSA Debit Card work?
Shortly after the start of the plan year you will receive your FSA Debit Card to use for your eligible medical expenses. If you are a current participant, your card will reflect the new plan year contribution amount on the new effectiive date of the plan. As you incur expenses, use your FSA Debit Card to have the funds taken directly out of your account so you do not have to pay out of your pocket.

Where can I use my FSA Debit Card?
Your FSA Debit Card will only be accepted at authorized vendors that have the appropriate merchant codes, such as medical clinics, hospitals, dental offices, vision care centers and pharmacies.

If I use my FSA Debit Card, is verification of claims still required?
Per IRS requirements, verification of claims is required for all debit card trasactions
A large portion of debit card transactions can be verified using one of the IRS' approved electronic method: however, not all transactions can be verified electronically. For any expense that cannot be verified electronically, you must provide supporting documentation upon request in the form of an itemized bill or receipt to Gilsbar. Verification should include the patient name, date of service, description of services renedered, cost and patient liability. If Gilsbar does not receive verification within 30 days of the date requested you be asked to return the un-verified amounts to you employer, or they may be counted as taxable income to you.

Are there special rules that relate to prescriptions, over-the-counter (OTC) products, and vision expenses incurred at retail merchants?
Starting on January 1, 2008, new special IRS rules allow you to use your FSA debit card in participating discount stores and supermarkets that can identify FSA-eligible items at checkout. This means that you can use your card at participating stores for the total FSA-eligible amount and NO reciepts are needed to verify the eligibility of the purchase! Important point to remember: If you use your card on or after January 1, 2008 in a discount store or supermarket that is not participating in the IRS program, even if you purchased FSA-eligible items there before, your card my be declined.

Can i use my FSA Debit Card for eligible Dependent Care expenses?
No. Your FSA Debit Card may not be used to pay for eligible Dependent Care expenses. Your card will only be accepted at authorized vendors that have the appropriate merchant codes, such as medical clinics, hospitals, dental offices, vision care centers and pharmacies.

What happens if the FSA Debit Card is used for an ineligible expense?
Gilsbar will review all charges and determine if the card was used for an ineligible expense, according to IRS guidlines. If it was, we will notify you for repayment of the invalid amount. Failure to within 30 days of the request can result in the loss of your debit card privileges.

What should I do to pay for an expense that is more than my account balance?
You should tell the merchant to swipe your card for the amount equal to what is left in your account, then use another form of payment to pay the remaining balance.

Dependent Care Reimbursement Account
The Dependent Care FSA helps you pay for child care services which make it possible for you and your spouse (if applicable) to work. It also may be used to help pay for the care of a disabled spouse or dependent.
The Dependent Care FSA creates tax savings on up to $5,000 of daycare expenses. That can mean $1,500 in tax savings enough to pay for weeks of eligible child or adult daycare!

How Does a Dependent Care FSA work?
A Dependent Care FSA is a reimbursement account that allows you to set aside a certain amount of each paycheck on a pre-tax basis to pay for your eligible dependent day care expenses. The amount you elect at the beginning of each plan year, is deducted from your gross earnings before federal and state taxes are calculated. By using your FSA to pay for qualified expenses you save on income tax... which means you have more money in your pocket.
To estimate your dependent care expenses, consider your expenses from last year. Remember the IRS requires all money in you account to be used during the plan year.

Am I eligible to use the Dependent Care FSA?
To be eligible, you must be at work during the time your eligible dependent receives care. You must also meet one of the following eligibility guidelines:

• You and your spouse are both employed;
• You are a single parent;
• Your spouse is a full-time student at least five months during the year while you are working;
• Your spouse is physically or mentally unable to provide his/her own care; or
• You are divorced or legally separated and have custody of your child most of the time even though you former spouse may claim the child for income tax purposes.

Who is an eligible dependent?
An eligible dependent is defined as any person who can be claimed as a dependent for federal tax purposes and who:

• Is a child under 13 years of age;
• Is a child over the age of 13 who is physically or mentally incapable of caring for himself or herself;
• Is your spouse who is physically or mentally incapable of caring for himself or herself;
• An elderly parent who resides with you and is physically or mentally incapable of caring for himself or herself.

What expenses are covered?
Eligible dependent care expenses are those which allow you and your spouse, if married, to work or attend school full-time. Below are some examples of eligible dependent care expenses?

• Day care facility fees
• Before/after school care
• Summer day camp (not overnight)
• Nursery school or preschool, if child is too young for kindergarten
• In home babysitting fees, if not provided another dependent and claimed as income by the care provider
• Private school tuition, K4 and above is not eligible for reimbursement

Is there anything I have to keep in mind when it comes time to file my taxes?
You are required to provide the names, address and taxpayer identification (or Social Security) of the dependent care provider on your income tax return. If you are unable to provide this information, both the tax credit ant the exclusion for the spending account reimbursement my be denied by the IRS. Verify that this information is available before you elect to participate in the Dependent Care FSA.
Expenses reimbursed from this FSA cannot be used to claim a Federal Income Tax credit; therefore, you will have to determine which approach is best for you. You may even be able to combine the expense account and tax credits to reduce your overall dependent care expenses. The Tax credit is up to $3,000 for on qualifying individual and up to $6,000 for two or more qualifying individuals. The percentage of dependent care expenses that can be used is 35%. The start of the phase out range from adjusted gross income is $15,000. You may want to consult your tax advisor to see if the Flexible Spending Account or the tax credit will be more advantageous to your family.

How do I get reimbursed?
As you incur eligible expenses you must submit a complete Dependent Care FSA claim form to Gilsbar with proof of payment from your day care provider or from the individual who provides the care.
The Dependent Care FSA claims must include the federal tax identification number or Social Security number, name and address of the provider, dates of service, type of service rendered and name of dependent. The individual who provides the care cannot be your spouse or a dependent under the age of 19.
With a Dependent Care FSA, you will be reimbursed as you set funds aside. If you submit a claim for more than what has been set aside for that account, the unreimbursed claim portion will be placed in "pending" status until funds are received through payroll deduction at which time you will receive reimbursement.

Can I pay my in-home daycare provider through the Dependent Care FSA?
Yes. You can be reimbursed from your Dependent Care FSA for any qualified daycare expenses, whether performed in your home, the provider's home, or a "daycare center". Receipts of the expenses and the caregiver's Tax ID number or Social Security number must be provided.

I'm divorced; my ex-spouse claim our child as a dependent for tax purposes. I pay for child care. Can I use the Dependent Care FSA?
If you child resides with you most of the year, you can use the dependent care account to pay for child care services. However, you might want to call your tax advisor to discuss your particular circumstances before you elect to participate in the account.