1. Can I change my health flexible spending account (FSA) election during the year?
In most cases, you cannot change your election during the year.  The only exceptions are for life event or status changes such as birth of a child, marriage, divorce, spouse gets or loses a job, etc.  If you overestimate or underestimate your expenses, you cannot change your election.

What if I change medical plans during the year or my employer changes our medical or dental plan?

You still cannot change your health flexible spending account election.  Once the plan year begins, you can only change your election because of a life event or status change.

2. If I pay for an expense in 2005 but incurred it in 2004, can I submit the claim for the 2005 plan year?
No.  The IRS requires that the date of service determines the plan year. For example, assume you have a dental procedure in December of 2004 but pay the bill in February of 2005.  BAI can only reimburse you as a 2004 expense.

3. Can I fax my claim form?
No.  BAI accept claims only by mail.

4. Can I submit multiple receipts with one claim form?
Yes. Please remember to total the amount of your claim on the form and to include receipts for all expenses, not cancelled checks or credit card statements.

5. Do I need receipts or will you accept a cancelled check?
You need to mail a receipt showing the date of service, a description of the service, and the amount paid.  We cannot accept a cancelled check or a credit card statement because they do not indicate the date of service or a description of the service.

The Internal Revenue Code (IRC) requires that administrators substantiate claims as eligible under a cafeteria plan.  This means that in accordance with IRC Reg. Sect. 1.125-2, Q&A7, we must determine if the expense is a reimbursable medical expense, a written statement from a provider of the condition, and a receipt for that service. These requirements do not originate from the administrator or the employer but are part of the IRC.

6. Can I submit dependent care expenses before I have all the funds in my account?
Yes. You can submit claims up to the amount of your annual election.  Remember that we can only reimburse you up to the amount deposited in your account from regular payroll deductions.

7. How come my SmartFlex^tm card does not always work and what do I do when it does not?
There are several possible reasons for a failed swipe attempt:

1. The card reader is defective or broken.
2. The reader is ineligible with MasterCard.
3. Funds are not available in your account.
4. System errors

Please notify us if a swipe does not work so that we can research the reason.  If your swipe does not work, pay as you have in the past and submit a paper claim to us for processing.

8. Can I use my SmartFlex^tm card to pay for mail order prescriptions?
Yes, in most cases.

9. Why do I have to send in receipts for my swipe?
The IRS, in Revenue Ruling 2003-43 issued in May of 2003, requires us to verify most expenses other than a copay.  That means you have to either fax or mail your receipt indicating the date of service, a description of the service, and the amount paid. If you fax your receipt, please use the fax form provided and include the e-mail or letter you receive with the fax.

The above Revenue Ruling requires BAI to consider all charges to the card, other than copayments, recurring expenses, and real-time substantiation as conditional, pending confirmation of the charge. Thus, the Revenue Ruling requires that you submit for review and substantiation additional third-party information, such as merchant or service provider receipts, describing (1) the service or product, (2) the date of the service or sale and, (3) the amount paid.

In all cases, when you submit these receipts, please include the computer-generated e-mail or letter with the faxed receipts.

10. What if I do not send in receipts for my swipe?
BAI will send you e-mails reminding you that you have to provide a receipt for the charge.  If you do not provide the receipt timely, the claim system automatically cancels your card and freezes the claim system.  This means that you cannot swipe your card nor will BAI be able to process any paper claims for you until you submit the required information.  If the swipe was for an ineligible expense, you must provide a check, payable to BAI FSA Escrow Account, in the full amount of the claim.

Once you either 1) submit the required receipt(s) or 2) pay back the plan for the ineligible portion of the payment, BAI will reactivate the card and process previously pended paper claims on the next regularly scheduled reimbursement cycle.

11. What happens when I swipe for more than my annual election?
The swipe will not process.  You can only swipe up to your account election.  If you have an expense greater, we suggest that you swipe for your remaining election balance first then use your personal credit card or cash to pay the balance.

12. What are eligible health expenses under our flexible spending account?
Recent IRS guidance has allowed us to reimburse more expenses than ever before under our health flexible spending account.  Following is an explanation of the changes and a list of items we can reimburse.

Dual purpose items – these are items that might have both a medical purpose and a personal, cosmetic, or general health purpose. To receive reimbursement, we require a medical practitioner's diagnosis of a medical condition and a statement from the medical practitioner that the item will treat the diagnosed disease.

Dietary supplements – we can reimburse health expenses with a medical practitioner's diagnosis of a medical condition and a statement from the medical practitioner that the dietary supplements will treat the diagnosed disease.

Health club dues – we can reimburse for health club dues with a statement from the medical practitioner that the employee join a health club in order to treat a disease, such as obesity. To be eligible, the employee could not belong to the health club before being diagnosed with the condition.

Over the counter medicine and drugs – to submit claims for reimbursement, the IRS requires employees to provide the following with their claims:

1. Name of the item
2. Date of purchase
3. Amount of item
4. Proof of purchase – if receipt does not indicate the name of the medicine or drug, we need the box top or label indicating the name as well as the price.

Click here for more details on eligible expenses.