is a “TPA” and what do they do?
A Third Party
Administrator (TPA) provides plan administration services.
TPAs design plan documents, certify eligibility of plan participants,
prepare reports and process claims. CDS Administrative Services,
LLC is a TPA for employers that provide cafeteria plans and retirement
plans to their employees.
is a Premium Only Plan (POP)?
Only Plans (POPs) allow employees to pay their share of premiums
for heath, dental, vision and group term life insurance on a pre-tax
basis through salary reduction. POPs allow employees to save on
Federal and State Income Tax, FICA and Medicare taxes (approximately
30%). Employers save on FICA and Medicare taxes (7.65%).
is a HSA?
Health Savings Account (HSA) is an investment account from which
you can draw money tax-free for medical care. HSAs are owned
by the individual and grow through investments, similar to an IRA.
HSAs have favorable tax treatment for contributions, distributions
and earnings. They are available to individuals covered by
a high deductible health plan (HDHP) and can be established to pay
for family medical expenses. If an HSA is offered through
a cafeteria plan in the workplace, employees save on Federal and
State Income Tax, FICA and Medicare taxes (approximately 30%) and
employers save on FICA and Medicare taxes (7.65%). Unspent
balances remain in the account and rollover the following year.
is a Form 5500 and do we have to file one?
benefit plans subject to the reporting requirements of ERISA are
required to file a Form 5500 for the plan. Your Cafeteria
Plan is not an ERISA plan, but components under your Cafeteria Plan
for example, a Health FSA, is an ERISA Plan. ERISA regulations
require an annual form 5500 unless an exemption applies such as
unfunded and/or fully insured plans with fewer than 100 participants
at the start of the plan year. Church and governmental plans
are not subject to ERISA.
medical expenses can be submitted for reimbursement through my flex
expenses that are not covered by health insurance that are incurred
by the plan holder, their spouse or dependents and are approved
Section 125 expenses can be reimbursed.
over-the-counter (OTC) medications can I get reimbursed for with
my flex account?
Effective January 1, 2011, most over-the counter medications are no longer reimbursable through flexible spending accounts unless a doctor prescribes the item to treat a medical condition.
Here are examples
of Over-The-Counter (OTC) Medicines that can be reimbursed through
a flexible spending account :
Carpal Tunnel Wrist Supports
Cold / Hot Packs for Injuries
Contact Lens Cleaning Solution
First Aid Kits and Supplies
items are not reimbursable, except for amounts paid for surgery
necessary to improve a deformity arising from a congenital ab norma
lity, personal injury from an accident or trauma, or a disfiguring
disease. If this is the case, a physician's certification
of the medical need will need to be attached to the claim for reimbursement.
have questions about the eligibility of an OTC medication, please
contact our offices at 320-214-2902.
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