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Frequently Asked Questions What 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.
What is a Premium Only Plan (POP)? Premium 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%).
What is a HSA? A 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.
What is a Form 5500 and do we have to file one? Employee 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.
What medical expenses can be submitted for reimbursement through my flex account? Medical 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.
Which over-the-counter (OTC) medications can I get reimbursed for with my flex account? Over-The-Counter (OTC) medicines purchased for medical care (not general health items) are eligible expenses.
Examples of Over-The-Counter (OTC) Medicines that can be reimbursed through a flexible spending account : • Allergy Medicine • Antacids • Anti-diarrhea • Anti-itch Lotions and Creams • Antibiotics (topical) • Anticandial (yeast) • Antifungal • Band Aids/Bandages • Carpal Tunnel Wrist Supports • Cold Sore/Fever Blister Medication • Cold and Flu Remedies • Cold/Hot Packs for Injuries • Contact Lens Cleaning Solution • Contraceptives • Cough Drops • Cough Suppressants or Expectorants • Decongestants • Dehydration • Diabetic Supplies • Diaper Rash Ointments • Eye Drops • First Aid Kits and Supplies • Hemorrhoid Suppositories and Creams • Ibuprofen • Incontinence Supplies • Lactose Intolerance • Laxatives • Migraine Relief • Menstrual Cycle Relief • Motion Sickness Pills • Nasal Sinus Sprays • Nasal Strips • Pain Reliever • Rubbing Alcohol • Sinus Medications • Sleeping Aids (only for occasional insomnia) • Smoking Cessation • Teething/Tooth Aches • Topical Steroids • Wart Removal Treatments • Wound Care
**Cosmetic 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.
If you have questions about the eligibility of an OTC medication, please contact our offices at 320-214-2923.
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