HSA FAQ

Eligibility

What are the eligibility guidelines?

You must be enrolled in a qualified High-Deductible Health Plan (HDHP). You cannot be claimed as a Tax Dependent.

You cannot be enrolled in Medicare, Tricare, another group medical plan (your spouse’s plan, for example), a Health Flexible Spending Account, or a Health Reimbursement Arrangement.

Domestic Partners of the account holder must set up a separate account and may contribute up to the family limit; the account holder cannot use their account to pay a Domestic Partner’s expenses.

If unsure about your eligibility, please consult your tax advisor or IRS publication 969.

What expenses are considered eligible?

You can use a HSA to pay for many medical, dental and vision expenses tax-free. Click on the link below to see what expenses are eligible:

Link to forms library item “List of all eligible medical, dental & vision expenses”

What happens if I pay for expenses that aren’t eligible?

Ineligible withdrawals are subject to income tax plus an additional 20% tax unless the account holder is 65 or older, is disabled or deceased.

Note: Per IRS requirements, you should always keep your receipts on file for any purchases made with your HSA card.

Contributions & Limits

Am I limited to the amount I can contribute?

IRS limits for 2018 are $3,450 per year if you have Employee Only coverage, or $6,900 for Family coverage. If aged 55 or older, you can also make “catch-up” contributions of up to $1,000 per year above those limits.

Once you have an account, you can stop, re-start or change your contribution amount at any time.

Contribution limits assume the account holder is “eligible” for the entire tax year. If the account holder is not eligible for the entire tax year they can still contribute the maximum as long as they remain eligible for the entire following tax year (through December 31); otherwise, they will be taxed like normal with an additional 10% penalty on a prorated amount of the contribution.

Contributions can be made up to the day federal income taxes are due for the previous plan year.

How much can I spend each year?

You can withdraw up to the amount in your account at that point in time. Any unused funds roll over from year to year.

Set up & fees

What does it cost me to have an HSA?

The HSA incurs a monthly fee of $3.50. If your employer is paying the fee and you terminate employment, the monthly fee will be taken from your HSA balance following termination.

The HSA may be required to maintain a minimum balance of $10. If the balance falls below this minimum, your account may be closed and applicable account closing fees will apply. Please contact Sound Benefit Administration if you have questions.

How do I set up an HSA?

In your web browser, go to Enroll Here (Insert our link to enroll now on HSA participant page here). This is a secure website so all the information you enter will be protected.

Follow the prompts to set up your new HSA.

What can my account be invested in?

If your account balance is at least $1,000, you can begin investing in four carefully selected investment portfolios based on risk or create a custom portfolio of your own from a menu of mutual funds for an additional monthly fee. A self-assessment tool helps you decide which investment option is best for you. Advisor-selected funds include Exchange Traded Funds, target-date funds and index funds. Online research materials for each model and fund, such as investment prospectus and detailed investor statements, are available. You can self-direct your investments with online tools to buy, sell, transfer and rebalance your portfolio.

Account Access

How do I access my account?

To log in and manage your account after it is set up, go to www.SoundAdmin.com (add link) and enter your login ID and password in the lower left corner of the homepage.

Here you can manage your investments, store claim documentation in the ClaimsVault™, initialize a withdrawal, retrieve your year-end tax information, view your recent transactions, and more.

Keeping Records

How should I store my eligible expense records?

All participants are responsible for retaining the proper documentation to verify the eligibility of a distribution. You can maintain these records yourself, or you can use the ClaimsVault™ feature of your HSA account to conveniently keep copies of your documentation.

What is the ClaimsVaultTM?

The ClaimsVault offers you and electronic way to manage your claims. You can use the ClaimsVault™ to store documentation for purchases made with your HSA card, and for HSA distributions you have taken to reimburse yourself for qualified expenses paid out-of-pocket. You can also use the ClaimsVault™ to keep documentation for qualified expenses that you have paid out-of-pocket, and for which you have not yet taken a distribution, so that your invested funds can continue to earn interest.

How do I store claims in the ClaimsVaultTM

Click on the link for ClaimsVault™ in the top menu bar once you’ve logged into your HSAToday account, and choose “Add an Expense.” From there you can enter details about your qualified expense, and choose to either:

  1. Upload a scanned copy of your documentation,
  2. Download our mobile phone app (search for DataPath Summit) (links to app stores here: https://play.google.com/store/apps/details?id=com.dpath.dpadminserv&hl=en https://itunes.apple.com/us/app/datapath-administrative-services/id602320959?mt=8 ) William – here is the link to the app info if you need it. http://datapathadmin.com/participant-services/mobile-app/ Use the app to take pictures of your claims receipts, then upload directly to the ClaimsVault.
  3. Fax it in with the provided cover sheet (see “Fax Cover Sheet” in forms library

Reporting requirements

Do I need to file any tax forms?

All participants must file an IRS Form-8889, which we provide to you, with their taxes.

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FSA FAQ

Contributions & Covered Expenses

Why should I participate in the Flexible Spending Healthcare Account when I already have medical, dental, and/or vision insurance?

This account is used to pay for expenses not covered by insurance (see Forms Library for a list of possible eligible expenses). For example:

  • Deductibles, Co-pays, and Prescription Drugs
  • Eligible expenses not covered by insurance
  • Dental Services & Orthodontics
  • Eyeglasses, Contacts, Solutions & Eye Surgery
  • Chiropractic, Naturopathic, Acupuncture services
  • Massage – when prescribed by a medical doctor
  • Mental Health Services – for individuals in your family–not marriage or family therapy
  • Weight-Loss Programs – when prescribed to treat a specific medical condition
  • Over-the-Counter items such as blood sugar testing kits and strips, flu shots, etc.
  • Over-the-Counter medications when accompanied with a “prescription” from a medical doctor describing the medical condition the medication is for
If I set aside part of my pay, won’t I make less money?

No. Your net take-home pay will increase by the amount of taxes you did not pay.

Can I change my contributions during the year?

Only if you have a change in status such as the addition or loss of a dependent.

What if I don’t use all of the money in my account(s) by the end of the plan year?

You forfeit any funds left in your account if you do not submit eligible expenses prior to the end of the plan’s run-out period (60 days after the end of the plan year).

NOTE: Some employers have adopted an option to help you spend down your remaining balance at the end of the year ($500 Carry-Over or 2.5 Month Extended Grace Period options). These options come at a risk to the employer. Please check with your employer to see if your plan has adopted one of these options.

What if I am not covered under my company’s health insurance plan(s)?

Good News! If you are eligible for your employer’s group healthcare plans but waive enrolling in them, then you and your family (legal dependents) can still participate in the Healthcare, Dependent Daycare, or Transit Accounts.

Who is a legal dependent?

A legal dependent is classified as your spouse, your child(ren), your adopted child(ren), or anyone else you are legally responsible for. This is a Federally-regulated IRS employee benefit plan and therefore charges incurred by domestic partners and/or their children (not your biological children) are not eligible for reimbursement under this plan. You may not submit charges incurred by anyone other than yourself, your spouse, or your children, otherwise known as your legal dependents.

Filing Flexible Spending Account claims

How do I get reimbursed for my expenses?

Once you have completed the Flexible Spending Account Enrollment Form, you will receive a claim form and instructions on how to file a claim. Simply complete the form, attach a copy of the itemized healthcare or dependent care statement and send it to Sound Benefit Administration via fax, email, or mail. You may also complete an online claim form (logging into the SBA website is required for this) and upload your claim backup securely.

What paperwork is required for a medical, dental or vision claim for reimbursement?

With a completed Claim for Reimbursement Form, it is important to send the proper documentation to substantiate your claim. The Internal Revenue Service requires that the documentation include:

  • Service provider information to include name, address and phone number
  • Patient information to include name, address and phone number
  • Date of service
  • Description of service or item
  • Charges or patient responsibility

Itemized Patient Statements from service providers and Explanation of Benefits (EOB’s) from insurance carriers are perfect forms of documentation. You do not need to show proof of payment.

Dual-purpose items such as massage therapy, membership to a weight loss program, over-the-counter medicines, vitamins, herbs or supplements, require a medical practitioner’s referral that includes the diagnosis of the specific medical condition for which it is prescribed. We require a copy of that referral each time you request reimbursement for that item. Over-the-counter medications, vitamins, minerals and supplements used for general health are not eligible for reimbursement.

Do I need to mail original receipts?

No. If you fax photocopied claims to us you do not need to mail originals. Additionally, if you mail your claims instead of faxing them, PLEASE keep original receipts for your records and mail us photocopies. We do not want the responsibility of storing your originals.

Do I need to show proof of payment to get reimbursed for a claim?

No. You do not need to show proof of payment. You only have to show you have incurred the expense. In some cases proof of payment may help substantiate patient responsibility.

Will a credit card receipt substantiate my claim?

No. Do not submit copies of cancelled checks, credit card receipts or debit card receipts. This does not meet the IRS requirement of having the date of service, description of service, and patient responsibility. An EOB or Itemized Patient Statement shows all of this required information.

What date makes a charge eligible?

The “Date of Service” is the date you incurred the charge. Eligible charges for reimbursement must be incurred during the plan year or while the participant is enrolled in the plan. Charges incurred prior to the plan start date or after the plan end date are not eligible for reimbursement. Charges incurred prior to a participant’s enrollment date or after the termination date are not eligible for reimbursement.

Our plan started and I received an old bill and paid it in the new plan year. Is this an eligible claim during this new plan year?

No. It doesn’t matter when you pay the bill. Payments for something that occurred before your plan year are not eligible. The date you incurred the expense must fall within the current plan year to be eligible to be reimbursed under the plan.

Can I only claim the amount that is deposited into my Healthcare Account?

No, you are eligible to receive reimbursement for your entire patient responsibility up to your plan year election regardless of what’s been deducted from your pay to date.

How often can I file claims on my Healthcare Account?

As often or as seldom as you choose throughout the plan year.

How long do I have to submit my healthcare claims for reimbursement?

You should submit claims for reimbursement during the plan year, but in no event later than 60 days after the end of a plan year. For a terminated employee or any participant who is no longer eligible under the terms of this plan, claims will still be reimbursed but only if such reimbursement requests are made by the earlier of (1) 60 days following the date that I ceased my employment or eligibility; or (2) the end of the 60-day period following the close of the plan year in which the expense arose. Any claims submitted after that time will not be considered.

If your employer has adopted either a $500 carry-over provision or an extended grace period provision in your plan documents, see below for details:

  • $500 Carry-Over provision– sixty days after a plan year has ended, any remaining balances up to a maximum of $500 will carry-over into the new plan year and be made available in addition to your new year election (if any). Claims incurred in that new plan year may then be applied to the old plan year’s unused balance until it is fully reimbursed.
  • 5 month extended grace period provision– if a plan year ends and a participant has an unused balance of any amount, it will be available in the following 2.5 months. A typical 12 month plan year would have a total of 14.5 months for a participant to incur charges to spend down an unused balance.

Please consult your employer to confirm if your Flexible Spending Account plan has adopted either the $500 carry-over provision or the 2.5 month extended grace period provision. Neither provision is available to terminated employees.

How long will it take for my claim to be processed?

Claims received between Monday and Friday are processed. The following Tuesday we will notify your employer that you need to be reimbursed and the amount (never details about your claim). Check with your employer to find out what their reimbursement method is because each employer may reimburse participants differently.

Can Sound Benefit Administration pay a provider directly?

No. You are reimbursed and you pay providers directly.

What do I need to do if my claim is denied?

Ineligible or duplicate claims need not be resubmitted. Some denied claims for reimbursement require more information. A new claim form must be completed with the additional documentation being requested.

How can I find out if you received my faxed claim?

We are unable to verify the receipt of your fax for one full business day after it is sent. Please do not fax your claim and call us within the hour to verify if we’ve received the fax.

What do I need to do if I terminate employment?

You have 60 days after your last day at work to submit claims incurred during the plan year up to your last day worked. After 60 days your run-out period has ended unless you work for a COBRA eligible employer and have elected the FSA as a COBRA benefit. NOTE: The 2.5 month extension or $500 carry-over balance does not apply if you terminated employment.

Orthodontia reimbursement

Can the cost for orthodontia treatment that lasts longer than the current plan year be reimbursed up-front?

Yes. Submit a claim form requesting your out-of-pocket expenses along with a copy of the orthodontia contract and we will reimburse the total amount of the treatment up-front up to your annual election, less previous reimbursements. You will no longer have to submit a Claim Form each month as services are rendered for reimbursement.

Do I have to pay the orthodontia charge in full before it can be reimbursed to me?

No. It is not necessary to pay the entire amount up-front in order to be reimbursed for the total contracted amount. Remember, we can only reimburse you for the total cost up to your annual election, less previous reimbursements.

If the cost of the orthodontia treatment is higher than my employer’s annual maximum election limit or my annual election, can I request for the remaining balance to be reimbursed in the next plan year?

Only if the orthodontia treatment continues into the next plan year. If the treatment is completed during the current year, no balances can be carried over to the next plan year.

Dependent Day Care

What paperwork do I need to submit a daycare claim?

We have two daycare claim forms for you to use. The first is when you use a licensed provider who supplies monthly invoices for daycare services. The monthly invoice should include the contact information and the Federal Tax ID number of that provider. The second form is for non-licensed providers who do not provide a monthly invoice. Complete this form and request the signature of the daycare provider. No additional receipt is necessary when you use this form. Remember, it is not necessary that you pay your daycare provider before you submit a daycare claim. Both claim forms are available in the forms library.

Can I submit daycare expenses for reimbursement if my spouse is not employed?

If a spouse does not work, and is not disabled or a full-time student, daycare expenses are not reimbursable. If your spouse is either a full-time student or not able to care for himself or herself, your spouse will be considered to have earned income of $250 a month if there is one qualifying dependent in the home, or $500 a month if there are two or more qualifying dependents in the home. Therefore, qualified daycare expenses are reimbursable.

Can I take both the dependent care tax credit on my tax return AND use this account to pay for my dependent care expenses?

No. Whether or not to participate in the daycare portion of this plan depends on your income, filing status, number of dependents and annual daycare expenses. Contact Sound Benefit Administration at (360) 779-7047 to assist you in determining whether participation in this plan or taking the dependent care credit on your tax return will give you greater tax savings. You cannot do both because it is considered “double-dipping.”

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HRA FAQ

Claim Reimbursement

How do I claim reimbursement for a medical deductible HRA?

You receive reimbursement by submitting a completed HRA Medical Deductible Claim Form and provide a copy of an “Explanation of Benefits” (EOB) or “Benefit Summary” from the insurance company showing you have met your out-of-pocket employee deductible responsibility.

How do I claim reimbursement for a coinsurance HRA?

You must submit a completed HRA Medical Coinsurance Claim Form and provide a copy of each “Explanation of Benefits” (EOB) sheet from the insurance company showing medical charges applied to coinsurance.

When will I be reimbursed?

All faxed/mailed claims received between Monday and Friday are adjudicated as they are received with reimbursements (remove this word?) generated the following week.

Where do I submit my claim?

Fax (866) 320-1932
Mail: 18887 State Highway 305, Suite #600
Poulsbo, WA 98370
Email: claims@soundadmin.com

Explanation of Benefits

How do I find out what I have paid toward my deductible or coinsurance?

Since each insurance carrier has a different Explanation of Benefits form and lists the deductible expenses and coinsurance expenses in different places on the form, we’ve provided samples of EOBs from some of the major medical providers in Washington, Oregon and Alaska for your convenience. Click on a sample EOB below (based on your medical insurance carrier):

  • Regence Blue Shield
  • Premera Blue Cross
  • Group Health Cooperative
  • United Healthcare
  • Aetna
  • Cigna

Termination of employment

What happens if I leave the company mid-year?

For a terminated employee or any Participant who is no longer eligible under the terms of this Plan, claims will still be reimbursed but only if such reimbursement requests are made by the earlier of (1) 60 days following the date that you ceased employment or eligibility; or (2) the end of the 60-day period following the close of the Plan Year in which the expense arose. Termination of employment concurrently terminates your eligibility and participation in the plan. Any claims submitted after that time will not be considered.

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POP FAQ

How do I enroll in the POP?

You will be given an enrollment form to complete. The form gives you a choice to either participate in the POP or to waive your right to participate in the POP. If you participate you will receive a copy of the Summary Plan Description which describes how the plan works.

Can I decide to stop participating mid-year?

During the plan year, you may not change your election unless you have a “Change in Status.”  Currently, Federal Law considers the following events to be eligible changes in status.

  • Marriage, divorce, legal separation or annulment, death of a spouse
  • Change in the number of dependents including birth, adoption, placement for adoption, or death of a dependent
  • Any of the following events for you, your spouse or dependent: termination or commencement of employment, a strike or lockout, commencement or return from an unpaid leave of absence, a change in worksite, or any other change in employment status that affects eligibility for benefits
  • A change in residence for you, your spouse, or dependent that affected eligibility for benefits
  • One of your dependents satisfies or ceases to satisfy the requirements for coverage due to attainment of age, student status, or any similar circumstance
  • A cost or coverage change in benefits that affected eligibility for you, your spouse or dependent
  • A prospective election change to terminate group coverage for you, your spouse or dependent(s) during the open enrollment period offered by the State Marketplace for individual medical coverage.
  • If you work for a large employer and you are a variable-hour employee, you may experience a reduction of hours and loss of benefit status due to the Affordable Care Act’s Look Back Measurement period calculation. This is an eligible change of status reason to end your participation in the Premium Only Plan. Check with your employer to find out if you are in this exact circumstance.
What if I have a financial hardship, can I stop participating then?

Unfortunately, no. Financial hardship is not an acceptable/eligible change of status reason. If enrolled in the Premium Only Plan, you may not change your salary reduction election by terminating insurance coverage for you, or your covered dependents, mid-plan year if you are responsible for a portion of the insurance premium.

How do I change my election if I have an eligble change in status?

If you need to make a change of election for any of these reasons, you must complete a Change of Status form. This form needs to be completed within 30 days of your event to increase, decrease or stop your payroll contributions on a pre-tax basis.

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COBRA FAQ

Eligibility & Enrollment

What type of event will entitle me to COBRA eligibility and for how long
  1. Termination of Employment – an employee has terminated employment. The employee and covered dependents are entitled to 18 months of COBRA eligibility.
  2. Reduction of Hours – an employee has reduced hours to the point where they no longer qualify for benefits under the group healthcare plans. The employee and covered dependents are entitled to 18 months of COBRA eligibility.
  3. Divorce –a COBRA Election Notice will be mailed to the ex-spouse based on the court-appointed date of the dissolution of marriage entitling him/her to 36 months of COBRA eligibility.
  4. Legal Separation – Based on the court-appointed date of the legal separation. A COBRA Election Notice will be mailed to the legally separated spouse entitling him/her to 36 months of COBRA eligibility.
  5. Loss of Dependent Status – a covered dependent child turns age 26 and will lose coverage at the end of their birthday month. A COBRA Election Notice is mailed to the 26 year old entitling him/her to 36 months of COBRA eligibility.
  6. Death of Employee – an employee has died. A COBRA Election Notice will be mailed to the surviving dependents that were covered on the employer’s group benefits entitling them to 36 months of COBRA coverage.
What if I am already enrolled in Medicare Part A or both Part A & B when I have a COBRA qualifying event?

You are eligible for 18 or 36 months of COBRA coverage depending on your “COBRA qualifying event.” Becoming eligible for COBRA has great impact on your Medicare coverage. It would be wise to consult with an insurance broker with specialized Medicare training in order to review the facts and circumstances of your situation. Enrolling in COBRA coverage could have unintended Medicare consequences.

How long must I wait to receive a COBRA Election Notice?

It must be mailed within 44 days from your “COBRA Qualifying Event” date.

How long do I have to respond to the COBRA Election Notice?

You have 60 days from the loss of coverage date or the date the COBRA Election Notice was mailed (whichever is the later) to respond by mailing your COBRA Election Form.

Do I have to mail the COBRA Election Form with payment?

No, however you will not be enrolled in benefits without payment. If you elect COBRA by mailing the COBRA Election Form without payment, you will have an additional 45 days to make all retroactive premium payments from the postmark date of the COBRA Election Form.

My COBRA Election Notice included several healthcare benefits; do I have to elect all of them?

No. You can pick the benefit(s) you want. You may also drop dependents at this time but you cannot add dependents unless it is open enrollment for that particular benefit.

What happens after I elect COBRA?

If you’ve paid the premium, your healthcare coverages will be reinstated back to the loss of coverage date. Your medical ID card will begin working again (in most cases) and you will not be mailed a new one (in most cases). Any medical deductible you may have met earlier in the plan year will be credited to your COBRA coverage.

Payment for COBRA premiums

How will I pay my monthly premiums?

You will be mailed payment coupons until the next benefit renewal month. The coupons will list the benefits you’ve elected, how much they cost, and where to mail your payment. You may use these coupons to mail a check every month or if you use your bank’s bill-pay service, no coupon is needed.

Do you accept credit card payments?

No. We have in the past but the bank fees we must pass along to COBRA participants are too cost prohibitive.

What is the grace period to pay my COBRA premiums once I’m enrolled?

The monthly premium is due the first of every month with a 30-day grace period. Payment must be postmarked no later than the 30th day of the month in which the Cobra premium is due. If NOT postmarked by the 30th day in which it is due, your coverage will be terminated back to the first of the month you failed to pay the premium on time.

Additional Benefits

Are there alternative benefits I may be eligible for in addition to COBRA coverage?

Yes. Having one of these events will qualify you to apply for Individual insurance and/or the State or Federal Exchange. It is important to consider the benefits of COBRA, individual coverage or exchange coverage and the costs. If you elect COBRA coverage, you will not have an opportunity to apply for individual coverage or Exchange coverage until the next open enrollment period (typically January 1st).

What are the benefits of COBRA coverage over Individual coverage or Exchange coverage?

If you have already met your deductible or out-of-pocket maximum on the group plan before being eligible for COBRA, it might be advantageous to stay on the COBRA plan until the end of the calendar year. If you move to an individual plan or Exchange plan mid-year, your deductible will reset to zero when that individual policy or Exchange policy begins. While all plans are different, it is common for COBRA coverage to have greater benefits due to being a group plan. Individual and Exchange coverage can be more expensive for older individuals because rates are based on age.

Termination of COBRA

What if I become eligible for Medicare while on COBRA?

The insurance carriers will terminate your coverage under COBRA due to your Medicare entitlement the first day of your birthday month even if you wanted to keep COBRA coverage.

How do I terminate my COBRA coverage before the end of my COBRA eligibility?

Provide written notification that you want to terminate your coverage. If you fail to pay your premium within the 30-day grace period, your coverage will be retroactively terminated for failure to pay premiums.

What happens if I remain on COBRA until the end of my 18 or 36 months of eligibility?

You cannot stay on COBRA after your eligibility period ends. You must find other coverage. You will be mailed a Conversion Letter six months before the end of your COBRA eligibility to remind you that your COBRA coverage cannot be extended and you must convert to an Individual, Exchange or other group policy.

COBRA Extensions

Can COBRA be extended for my dependents?

Yes. If a covered dependent incurs a qualifying secondary event. Such an event includes, a covered dependent experiences a divorce, a legal separation, a loss of dependent status, or a death during the 18-month COBRA eligibility period. This entitles the covered dependent to a total of 36 months of COBRA eligibility.

What if I should become disabled? Are there any extensions available to my COBRA coverage

Yes. If you have been “deemed disabled” by Social Security, you will receive an “award” letter. This letter must be submitted to the COBRA insurance carriers within 30 days of the date on the “award” letter. The insurance carriers will extend COBRA eligibility from 18 to 29 months (no extension available if the COBRA participant is already eligible for 36 months).