• Health Care FSA Maximum: $2,000
• Health Care FSA Minimum: $240
• Dependent Care: Account Maximum: $5,000
• No Minimum Dependent Care FSA amount
• Waiting Period: 1st of the month after 30 days of employment
• Run Off Period: 90 days following the end of the plan year to file for services rendered during the plan year

REMINDER: The Internal Revenue Service (IRS) requires review of all receipts for eligible expenses in an FSA, including debit card transactions and over-the-counter drugs. As a remider, participants should keep all of their reciepts for the entire plan year in the event that Gilsbar ask for documentation or the IRS request a copy of a receipt.

Flexible Spending Accounts allow you to use pre-taxed dollars towards 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 heath care and day care expenses using a Health Care and/or Dependent Care Flexible Spending Account (FSA). The frequently asked FSA below will help you understand how to make the most of this program and your paycheck.

General questions regarding Health Care and Dependent Care Accounts:

What is and an FSA?
Provided by your employer, an FSA is a reimbursement account that allows you to set aside a certain amount each paycheck, pre-tax, to help for your out-of-pocket medical expenses and/or dependent day care expenses. The amount you elect is deducted for 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 reimbursments 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 depend 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 your 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 may 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 may include:

• Marriage, divorce, or legal seperation
• Birth, adoption or placement for adoption of a child
• Death of a dependent or spouse
• Change in employment status for you 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 only for 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 your 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 this section.

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

How does participating in an FSA program save me money?

Gilsbar Medical Reimbursement Account

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 that 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 litte extra tax than to overestimate expenses and forfeit money. To help avoid forfeitures, you will receive a notice of your balance prior to the end of the each year.
You can access your balance information online 12/7 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 plan pays, expenses for routine physicals and other expenses not covered by your health care plan. For more complete listing please refer to the "Qualified Medical Expenses Eligilbe for Reimbursement" list below.

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

• Ensure your expenses are coverd under your health carrier
• If you 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 plan: (ex: over-the-counter medicines) Complete the Health Care Expense claim form and attach itemized bills for the expense.

Fax claims and proof of expense to 866-635-1329

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

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

If I don't have any medical insurance through my employer, can i still participate in the Health Care FSA?
Yes. Out-of-pocket expenses for you and your dependent are eligible for reimbursement whether or not you are insured through your employer. 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 may be different than that used for your health insurance plan)

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 from 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 for reinforcement.

Qualified Medical Expenses Eligible For Reimbursement

Expenses not Eligible for Reimbursment

Over-The-Counter Drug/Medicine List

Over-the-counter drugs used primarily for medical care.
The drug/medicines listed below are approved with a receipt from the providers/store. A recommendation from a health care provider is not needed.

The following is a 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 advisor. IRS Publication 502 can be ordered from the IRS 1-800-TAX-FORM (1-800-829-3676)

Dual Purpose OTC Drugs
The items listed below require a third-party receipt and a note from the health care provider listing the diagnosis of the medical condition or illness and the recommendation of the OTC drug / medicine. This list is not all inclusive and is intended to give examples of the most common brands of OTC drugs.

• Ant-baldness/hair loss/hair replacement, such as Rogaine, but only if to replace hair loss due to a medical condition (i.e. cancer treatment) and not for balding due to age.
• Fiber supplements such as Benefiber and Metamucil
• Glucosamine/Chondrotin for arthritis or other medical conditions (not reimbursable if taken for overall joint health)
• Herbal Supplements used to treat a specific disease such as St. John's wort for depression
• Hormone therapy drugs
• Medicated shampoos used to treat a specific medical condition like psoriasis and only the amount in excess over the cost of normal shampoo
• No Doz (and other sleep prevention drugs)
• Nose strips for proper breathing or other medical conditions
• Pedialyte for a child's dehydration
• Retin-A and other acne medicines (not reimbursable if used for cosmetic purposes such as wrinkle reduction)
• Sleep Aids
• Snoring cessation aids and medications such as Breath Right Spry, Snorezz
• Sunscreen and Sunblock
• Vitamins are not an eligible expense, unless prescribed by a physician to treat a specific medical condition (i.e. iron to treat, not prevent anemia, Calcium supplements to treat, not prevent Osteoporosis)
• Weight loss/dietary supplement must be for a specific medical condition such as obesity

Gilsbar Flex Debit Card

Beginning January 1, 2008, new IRS rules have simplified the use of Flex Debit Cards. These rules now require drug stores and supermarkets to identify FSA-eligible items at the checkout and require the drug store or supermarket to only use the card for FSA eligible items. This means that 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 eligibility 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/en/index.asp and click on SIGIS Merchant List 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 has not made the change required by the IRS to identify FSA-eligible items, your Card may 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 free standing pharmacy, or simply continue to turn in your paper reciepts for reimbursement as you have previously.

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 in the store prior 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 tot he register at checkout to let the clerk ring them up
2. Present your Card and swipe for payment
3. If the the Card swipe transaction is approved (i.e. 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 deductied 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 purchase
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 anount on the effect 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 don't have to pay with cash 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 office, vision care centers and pharmacies.

If i wuse my FSA Debit Card, is verification of claim still required?
Per IRS requirements, verification of claims is required for all debit card transactions. A large portion of debit card can be verified using one of the IRS' approved electronic methods: however, not all transaction 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 patients name, date of service, description of services rendered, cost and patient liability. If Gilsbar does not receive verification within 30-days of the date requested you will be asked to return the unverified amounts to your employer, or they may be counted as taxable income to you.

Are there special rules that relate to prescriptions, over-the-counter drugs(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 receipts 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 IRA program, even if you purchased FSA-eligible items there before, your card my decline.

Can I use my FSA Debit Card for eligible Dependent Care expenses?
No. Your FSA Debit Card may not be used to pay for eligiblity 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 center and pharmacies.

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

What should I do 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 payment method to pay the remaining balance.

Gilsbar Dependent Care Account

The Dependent Care FSA helps you pay for child care services which makes 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 care.

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 daycare 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. Remember the IRS requires all money in you account be used during the plan year. You can access balance information 24/7 via myGilsbar.com. Select the "Reimbursement Accounty Center" link on the left side of the screen to view your balances.

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 eligibility requirement:

• You and your spouse are both employeed
• 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 your 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 13 whos 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 you are 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 by another dependent and claimed as income by the care provider
• Private school tuition, K-4 and above is not eligible

Is there anything i have to keep in mind when it comes time to file my taxes?
You are required to provide the name, address and tax payer identification (or Social Security Number) of the dependent care provider on your income tax return.if you are unable to provide this information, both the tax credit and the exclusion for the spending account reimbursement may 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. Hovever, the maximum expenses you can claim when using booth the tax credit and FSA is the tax credit limit ($2,400 for one dependent or $4,800 two or more dependents), minius the amount reimbursed under the Dependent Care FSA.

How do I get Reimbursed?
As you incur eligible expenses you must submit a completed Dependent Care FSA claim form to Gilsbar with proof of payment from your day care provider or from the indivdual who provides the care. 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.

Fax Claims and Proof of Expense to 866-635-1329 for Processing.

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 preformed in your home, the provider's home or a "daycare center". Receipts for the expenses and the caregiver's Tax ID number or social security number must be provided.

I'm divorced; my ex-spouse claims our child as a dependent for tax purposes. I pay for child care. Can I use the Dependent Care FSA?
If your 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.

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 myGilsbar.com or you can call Gilsbar's Customer Contact Center at 1-800-445-7227 ext. 883.

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