FSA Advanced Quiz

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1) How does the debit card work? Is it an open-ended card?*

It will work anywhere that takes debit card but the participant will need to send in documentation.
The card is a “smart” card and will only work at approved merchants. IRS sets forth Merchant Category Codes (MCC) on all machines and it will only work with IIAS Merchants.
The card can be used as merchants and ATMS.

2) Will the debit card work with dependent care FSA?*

Potentially. Depends on how the credit card terminal is coded. For example, YMCA is coded as a “social club” and not “daycare provider.”
The debit card is only used for medical expenses, not dependent care.
The debit card will work anywhere debit cards are taken.

3) When will employees have to submit documentation?*

Only for dependent card costs.
We auto approve all transactions.
Employees will send documentation for any transaction that does not match a co-pay or from the dentist or optometrist.

4) If an employee terminates, when does coverage end?*

Last day of the month of termination date.
Date of termination. In rare circumstances, does an employer allow FSAs to run through the end of the month.

5) Do I need to offer COBRA for FSAs?*

Yes, if there is a positive spending balance. Meaning the employee did not use more than they contributed.
Yes, for dependent care but not for medical FSA
No, FSA is not eligible for COBRA

6) If an employee moves to a HDHP/HSA plan from a PPO and has funds leftover in their FSA (under $500) that will carryover, what happens to the money?*

The funds should be deposited into HSA compatible limited purpose FSA. If the employer does not offer this FSA, they should amend their Plan Document to add it.
The participant forfeits the carryover funds.
The funds can be used in the FSA, but no additional elections can be made.

7) Does BASIC complete non-discrimination testing for the FSA?*

Yes, BASIC will complete this for an additional fee.
Yes, BASIC will complete this at the beginning of the plan year to give time to adjust accounts if needed.
No, BASIC does however sell non-discrimination testing.

8) If an employee terminates and spent more than they contributed, can the employer recoup the overpaid funds?*

The employer can request funds but the ex employee doesn't have to pay.
Yes, the overpaid funds can be deducted on the last paycheck.
No, the employer cannot request the funds be paid back due to the Uniform Coverage Rule.

9) If an employee terminated and is rehired within 30 days, can the employee change their election?*

No, the employee can not enroll in the FSA until the next open enrollment.
No, the employee will resume the previous election. If the employee is rehired after 30 days, they can make a new election.
Yes, it is a qualifying event.

10) If a new hire enrolls into the FSA mid-year (plan year begins 1/1, new hire is eligible for benefits 6/1), is their election pro-rated or can they elect the full annual maximum?*

The employee can elect the whole amount.
The amount is pro-rated.
The employer can decided if the annual election is allowed or if it's pro-rated.

FSA Advanced Quiz

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