Personal Choice Account - Flexible Benefits Administration

What does Personal Choice Account offer?

Personal Choice Account (PCA) is an administrator of personal savings accounts sponsored and designed by the Internal Revenue Service (IRS). These accounts are sometimes called Section 125 or Cafeteria Plans; however various accounts are part of other IRS Code Sections as well. What these accounts have in common is that they offer employees a choice to pay for certain qualified expenses on a pre-tax basis. Paying for certain benefits with pre-tax dollars reduces the amount you pay in taxes and increases your take-home pay. PCA offers the following plans;

• Health Care Flexible Spending Account (HFSA)
• Limited Health Care Flexible Spending Accounts (LFSA)
• Dependent Care Flexible Spending Account (DCAP)
• Health Reimbursement Accounts (HRA)
• Commute Reimbursement Accounts (CREA)
• Premium Conversion Accounts or Premium Only Plans (POP)

More information about these account types is available throughout this website.

Do I have to participate in all choices?

No. You can enroll in any combination of the choices or none at all. The decision is yours. Participation in these accounts should be based on your need. For instance, if you don’t have children or dependents that require daycare you wouldn’t want to participate in the Dependent Care Flexible Spending Account. Most people, however, will probably want to participate in the pre-tax premium coverage because there is no risk, only savings!

When you are making your choices you should not under estimate value of the Health Care Flexible Spending Account. With it’s vast array of eligible expenses which include your insurance deductible, co-pay, coinsurance and over the counter medications to name only a few, there are few people that will not save some money using this account.

Are there any risks? What are they?

There is some risk with a Health Care Flexible Spending Account, Dependent Care Flexible Spending Account and Commute Reimbursement Accounts. The Internal Revenue Service (IRS) states that if you do not have expenses that equal or exceed the money you have set aside on a pre-tax basis during a given plan year, you lose the remaining balance in your Flexible Spending Account. There are certain options that an employer may select that will lengthen the time you have to incur services. One such option is referred to as a 2.5 Month Extension. Your Employer will let you know if this is an option that has been chosen for your group.

You can minimize this risk by forecasting your expenses carefully and conservatively. We suggest that you use this Election Worksheet when determining your annual election.

Is this an automatic election or do I need to sign a form?

Flexible Spending Accounts are not enrolled in automatically. This is because you also choose the amount of money you put into the account (we call this your annual contribution or annual election amount). In most cases, you will need to complete a form to enroll in or decline participation in the account. Return your completed form to your Human Resource Department on or before the last day of enrollment. Your Human Resource Department will notify you of the deadline.

In lieu of a form, some employers may have online enrollment. Your Human Resources Department will advise you if that is the case.

Do I need to have a certain insurance plan to participate?

For a Health Care Flexible Spending Account, Dependent Care Flexible Spending Account or Commute Reimbursement Account you do not need to be participating in any specific insurance plan in order to have a spending account.

Under what circumstances can the annual election be changed?

Changes to your annual election and enrollment in or termination of your Health Care Flexible Spending Account can only be made if you experience a qualified event. Some examples include birth, death and divorce. The events are strictly enforced by the IRS and must be processed through you Human Resources Department. In all cases, the change you make must be consistent with the qualifying event.

For instance if you have a child you can increase your flexible spending election, but you can’t terminate the account since it’s not consistent with the addition of a dependent. If you have a qualified event you must contact your Human Resources Department right away. They will help you complete the proper forms and determine if your event and change is legitimate.

What is the maximum amount of money that I can put in a (DCAP)?

Under a Dependent Care Flexible Spending Account you are limited to $5000.00 per calendar year if you are single, filing as head of household or married filing jointly. If you are married filing single you are limited to $2500.00 per calendar year. These limits are set by the Internal Revenue Services. Note that if both you and your spouse participate in a Dependent Care Spending Account your combined election cannot exceed the $5000.00 limit.

If I terminate employment, what happens to the money I elected?

Specifically in a DCAP, you will have a period of time following your termination to submit claims for the amount of money that you’ve contributed (not your full annual election, however). The services can be incurred even after you terminate employment, but the daycare still must be provided during a time when you (and your spouse if applicable) were working, looking for work or attending school full time. Any balance remaining in the account after the run out period will be forfeited. Other types of accounts have different rules regarding funds after termination.

Can I transfer funds between my other Flexible Spending Accounts?

No. Each account is separate and distinct. Funds can not be transferred between accounts.

Can I use my full election even though I haven’t made all the deposits to the account?

It depends on the type of account. With a dependent care account, the eligible reimbursement amount is available only after the funds have been payroll deducted and those funds have been received by Personal Choice Account. In other words you can only be reimbursed up to your contribution to date.

Who determines if an expense is eligible?

The Internal Revenue Service (IRS) formulates the guidelines for the reimbursement accounts and determines what is eligible. While the IRS refers to eligible expenses as “213d” expenses, there is truly no such list available. Eligibility for a service is based on several factors and “rules”. Refer to our Dependent Care Eligible Expenses List for commonly claimed expenses. Note: The list is not legally binding and is not a guarantee of payment.

How do I get reimbursed for Dependent Care expenses?

To obtain reimbursement you must complete a Dependent Care Reimbursement Form and also provide documentation of the expense. This should include an itemized receipt from your daycare provider which includes the name of the provider, the name of the child, the dates of care and the cost to you. In lieu of a receipt you can also have the provider sign the “Affidavit of Dependent Care Expenses Rendered”.

When should I submit my reimbursement request?

You can submit requests for reimbursement at any time during the year after the care is provided. All reimbursements must be received in our office no later than the end of the run out period prescribed by the group. This is the period after the end of the plan year that you have to send in expenses that were incurred during the plan year. PCA suggests a run out period of 90 days after the plan year ends; however, you should confirm your specific run out period either by contacting your Human Resources department or by contacting PCA by phone or email. Some employers may also elect an extension period which would affect the date in which services must be incurred.

Can I use my full election even though I haven’t made all the deposits to the account?

It depends on the type of account. With a Dependent Care Flexible Spending Account you are limited to only being reimbursed for the amount of contributions you have in the account at the time of your submission. If you send in expenses which exceed your contributions, the claims will pend in our system until additional contributions are received.

Once I file an eligible expense, how long do I have to wait until I am reimbursed?

Personal Choice Account processes claims on a daily basis (Monday through Friday, excluding holidays). Generally, claims are processed within 3-4 days of being received. Some expenses may require additional information and incomplete or inaccurate claims may take longer.

Reimbursement checks are mailed to the employee's home or can be sent via direct deposit to your savings or checking account. In addition, if the reimbursement totals less than $10.00 and you have not elected direct deposit, you reimbursement will be delayed until additional expenses are received and reimbursement exceeds $10.00.

How will I know if you receive my request?

While your request will not show in your online account until it is processed, we can let you know if it’s arrived and awaiting processing. There are several ways. If you send your request via fax, write a note on the cover sheet asking that we call (or email) you to confirm receipt of the fax. One of our Customer Service Representatives will reply approximately 3-4 hours after receipt.

Once claims are received they are sorted and microfilmed. Once they return from that process they are “logged”. You can call or email us to see if your claim has been logged.

Will I receive a report showing the balance in my account?

Yes, with every reimbursement you will receive a check stub showing you the details of your account. During the third quarter of the plan year a report will be mailed to you showing your balance to that point and reminding you to use the money you have set aside or forfeit it at the end of the year. You may also access this information 24/7 on this website or by telephone/email 8:00am - 5:00pm PST.

My request has been paid but I didn’t receive the check. What should I do?

Simply contact us by phone or email so we can request a “stop pay” on the check and have it reissued to you. We are required to wait 15 days after the date of issue before a stop can be done. After requesting a reissue, if you locate the original check, do not try to cash it. Your bank may charge you a fee for attempting to do so.

I have direct deposit into a bank account that I have now closed. What should I do?

You’ll need to request (in writing) that your direct deposit be cancelled. We will then set your account to pay you by check, until such a time as you complete a new direct deposit form.

I accidently shredded my check. Now what?

Simply contact us by phone or email and we will have the check reissued. If you know that the check has been destroyed, we can request a reissue right away. If you’re not sure that the check has been destroyed (i.e. you just haven’t received it) then we are required to wait 15 days after the day of issue before it can be reissued to you.

How do I report a change of address?

You can change your address with us in writing (via email or fax). Please indicate your old address and your new address. You must be sure to also change your address with your employer or there is a chance that your address will be inconsistent and could get changed back.

What are “work-related” dependent daycare expenses?

The expenses must be incurred to enable you (and your spouse if married) to be gainfully employed. Gainful employment does not include unpaid volunteer work, or work for a nominal salary.

Is kindergarten tuition an eligible expense?

No. The IRS does not consider educational or tuition expenses as eligible expenses, including kindergarten, first grade and higher. You can claim expenses for before or after school care, or nursery school expenses provided the care is custodial in nature and not educational. Click here for a sample list of eligible dependent care expenses.

What about daycare while I do volunteer work?

No. The expenses must be incurred to enable you to be gainfully employed. Gainful employment does not include unpaid volunteer work, or work for a nominal salary. Click here for a sample list of eligible dependent care expenses.

Can I use the dependent care account for my toddler while home on maternity leave?

No. IRS regulations state that the expenses incurred must be work-related. The amounts paid while you are off work because of illness, including maternity leave are not eligible.

I pay my neighbor to watch my 13-year-old after school. Is this an eligible expense?

Generally, no. The expense must be for a child who is under the age of 13. If, however, the child is incapable of self-care (as certified by a physician) the expense may qualify.

My 16-year-old daughter cares for my 8-year-old son after school. Can I pay my daughter and file those expenses through my flex plan?

No. You can only claim daycare expenses that you make to relatives if they are not your dependents. Ineligible expenses include any amounts you pay to:

• A dependent for whom you (or your spouse) can claim an exemption.
• Your child who is under age 19 at the end of the year, even if he or she is not your dependent.