Or. Admin. Code § 101-020-0065 - Health Flexible Spending Arrangement
(1) An eligible employee may enroll in a
pretax Health Care Flexible Spending Account (Health Care FSA). A Health Care
FSA is regulated by various federal government regulations. Health Care FSAs
can be defined in part by the following categories.
(a) It is a self-insured medical
reimbursement plan subject to certain Internal Revenue Code
requirements.
(b) It is a flexible
spending account subject to additional requirements in the IRS
regulations.
(c) It is a group
health plan subject to COBRA, HIPAA, health care reform and other federal
mandates that affect group health plans.
(2) Employees enrolled in a Health Care FSA
contribute a pre-tax amount from each month's salary during the plan year.
Employees receive reimbursement from the account for qualified incurred health
expenses during the plan year by submitting claims.
(3) FSA plans are annual plans, eligible
employees must enroll for each plan year in order to participate. FSA plan
enrollments do not roll over from one plan year to the next. All plan year FSA
enrollments terminate December 31. The period of coverage is the 12 months
during PEBB's plan year.
(4) An
employee's failure to take an enrollment action is not considered an employee
enrollment error. An enrollment action means that the employee during the
allowable enrollment times must take an action to enroll, add to, save an
active enrollment, or change benefit plan enrollment elections.
(5) The eligible employee is responsible for
identifying enrollment errors and maintaining a valid and accurate Health Care
flexible spending enrollment. The employee has 30 days from date of their first
paycheck with their Health Care FSA enrollment to request a correction. The
exception is open enrollment see OAR 101-020-0037(c).
(6) PEBB must review enrollment errors
reported by the employee. Corrections if allowable must be consistent with the
IRS regulations that govern flexible spending accounts.
(7) The annual employee contribution to the
FSA account cannot exceed the allowable federal annual maximum.
(a) The employee's monthly contribution is
the employee's elected annual contribution amount pro-rated per each month of
the plan year.
(b) PEBB requires a
minimum monthly contribution amount.
(c) An employee may make only one FSA
contribution each month of the plan year.
(d) An employee may not change their monthly
contribution unless they experience a qualified mid-year plan change event that
allows the change.
(e) Some OUS
employees may have fewer months (9 or 10) of contribution during the plan year.
Employees that receive less than 12 months of paychecks during the plan year
must indicate during enrollment the months in which they will not receive a
paycheck. For employees who receive less than 12 paychecks in a plan year, the
electronic system and the paper enrollment form provide check boxes to indicate
the months in which no contribution will be made.
(8) FSA accounts have uniform coverage.
Uniform coverage means that an employee's maximum contribution amount for the
plan year is available at all times while the account is active. The amount
available is reduced for prior reimbursements made in the current plan year.
Uniform coverage is provided throughout the period of coverage.
(9) Expenses must be incurred by the
employee, spouse, the employee's children who have not attained age 27 as of
the end of the employee's taxable year, or who are the employee's tax
dependents for health coverage purposes.
(10) A grace period for qualified claim and
reimbursement extends through March 15 of each new plan year. During the grace
period, FSA participants may incur claims against any remaining previous plan
year FSA funds up to March 15 in the new plan year. The qualified claim
submission deadline for previous plan year account fund reimbursements is March
31 of the new plan year. The 3rd Party Administrator may require additional
documentation for a claim to be in accordance with IRS regulations.
(11) FSAs are "use it or lose it" accounts.
Any previous plan year funds remaining in the account beyond March 31 of the
new plan year forfeit to PEBB plan administration.
(12) Refunds of account funds without a
timely claim and reimbursement submission process is not permitted. Fund
transfers between the account types is not permitted.
(13) Employees taking an approved protected
leave, for example, FMLA/OFLA, CBIW, or Active Military Duty Leave are entitled
to continuation of the their Health Care FSA while on the leave.
(a) If the leave is a substituted paid leave,
then the employee's contribution for continuation must be paid by payroll
deduction.
(b) An agency may offer
one or more of the following options to an employee who continues the FSA
account coverage while on a protected unpaid leave. Before commencing the
leave, or shortly thereafter, the employee and the agency must agree to one of
the following options for employee contribution.
(A) Prepay. The employee is given the
opportunity to prepay their premium share due during the leave period before
the leave begins. The prepay option cannot be the sole option offered to
employees on approved protected leave.
(B) Pay as you go. The employee pays the cost
of coverage in installments during the leave. Contributions are paid with
after-tax dollars or with pre-tax dollars to the extent that the employee
receives compensation (e.g., unused sick or vacation days) during the leave.
(C) Catch-up options. The employer
and employee agree in advance that the employer will advance payment of the
employee's share of the contribution during the leave and that the employee
will repay the advanced amounts when the employee returns to work.
(D) Revoke Coverage. Employees may revoke the
FSA account enrollment during the leave.
(14) An employer is not required to continue
the benefits of an employee who fails to make required payments while on a
protected leave provided notice procedures are followed. Refer to OAR
101-20-0002(7)(d) for employee non-payment notices and benefit termination. If
the employer chooses to continue the health coverage of an employee who fails
to pay his or her share of the premium or contribution payments, the employer
is permitted to recoup the employee's premium.
(15) Employees who terminate FSA
participation during the plan year can receive reimbursement for qualified
claim expenses incurred while the Health Care FSA coverage was actively in
force. No reimbursement is allowed for expenses incurred after the account
terminates. Active participation ends the last day of the month that a
contribution is received for that month.
(16) OUS and some academic OSPS employees that enroll
based on their 9- or 10-month pay contributions are considered actively
participating during the months of no contribution. For example, during months
of June and July when they are not actively at work.
(17) Final contribution at termination of
employment or a leave without pay terminating the FSA:
(a) OSPS, the employee will not have a
contribution taken from their final paycheck. "Example: Ann's last day of work
is September 16. Her final check will not have a contribution taken. Ann's
participation ends September 30."
(b) An OUS employee who meets the 80-hour
work rule will have a contribution taken from their final paycheck, in
accordance with OAR 101-020-0002. "Example 1: Ann's last day of work is June 6.
She has less than 80 hours of work for the month. Ann's final check will not
have a contribution taken. Ann's participation ends May 31." "Example 2: Ann's
last day of work is June 20. She has more than 80 hours of work for the month.
Ann's final check will have a contribution taken. Ann's participation ends June
30."
(18) An eligible
employee terminating employment or going on an approved unprotected leave of
absence, may continue to participate in the Health Care FSA up to the end of
the current plan year through COBRA. There must be a positive FSA account
balance and all contributions are paid post tax to the COBRA
administrator.
(19) When called to
active duty for a period of at least 180 days or for an indefinite period, an
employee can request a qualified reservist distribution from a Health Care FSA.
The eligible employee must be a member of the Army National Guard of the United
States, the Army Reserve, Navy Reserve, Marine Corps Reserve, Air National
Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve
Corps of the Public Health Service.
(a) The
following conditions must be met by the eligible employee in order to elect the
qualified reservist distribution:
(A)
Contributions to the Health Care FSA account for the plan year as of the date
of the request for a distribution exceed the reimbursements received from the
Health Care FSA Account for the plan year as of that date.
(B) The agency receives a copy of the order
or call to active duty along with the distribution request form. An order or
call to active duty of less than 180 days duration must be supplemented by
subsequent calls or orders to reach a total of 180 or more days.
(C) During the period beginning with the date
of the order or call to active duty and ending on the last eligible day of the
plan year during which the order or call occurred, the employee submits a
qualified reservist distribution election form to the agency. "Example: An
eligible employee is called to active duty on September 13, of the current plan
year and wants a Health Care FSA qualified reservist distribution. The employee
must request the qualified reservist distribution between September 13, and
March of the following plan year."
(b) The distribution amount paid to the eligible
employee is equal to the contributions to the Health Care FSA Account for the
plan year as of the date of the distribution request, minus any reimbursements
received by the employee for the plan year as of that date. A qualified
reservist distribution is included in an eligible employee's gross income and
reported as wages for the year it is paid. "Example: An eligible employee
elects Health Care FSA benefits of $1,000 for the current plan year, and during
the first six months of the plan year, makes Health Care FSA contributions of
$500 and receives Health FSA reimbursements of $200 for qualified medical care
expenses. The employee is called to active duty for an indefinite period and on
June 30 requests a reservist distribution from the agency. The employee will
receive a distribution of $300, and the agency must add that amount to the
employee's taxable wages for the current tax year."
(c) The Health Care FSA Account is closed as of the
date of the request for a reservist distribution. An employee forfeits the
right to receive reimbursements for medical care expenses incurred during the
period that begins on the date of the distribution request and ending on the
last day of the Plan Year.
(20) An employee who separates from the
employer and returns to work in a benefit eligible position within 12 months is
not reinstated in the Health Care FSA. They may enroll within 30 days of their
new benefit eligible date.
Notes
Statutory/Other Authority: ORS 243.061 - 243.302
Statutes/Other Implemented: ORS 243.061 - 243.302
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