Proprietary and Confidential FBMC & The State of South Carolina MONEYPLU$ Training August / September 2005

Proprietary and ConfidentialProprietary and Confidential

FBMC & The State of FBMC & The State of South CarolinaSouth Carolina

MONEYPLU$MONEYPLU$ Training Training

August / September 2005August / September 2005

The EZ REIMBURSEThe EZ REIMBURSE® ®

MasterCardMasterCard® ® CardCard

The EZ REIMBURSEThe EZ REIMBURSE®® MasterCard MasterCard

®®Card is issued by MetaBankCard is issued by MetaBank

What is the EZ What is the EZ REIMBURSEREIMBURSE®® Card? Card?

Stored Value Card (not a Stored Value Card (not a credit or debit card).credit or debit card). The The value of the card is pre- value of the card is pre- loaded at the beginning of loaded at the beginning of each plan year and matches each plan year and matches the annualized election of the the annualized election of the participant's Medical participant's Medical Spending AccountSpending Account

Gives participants immediate Gives participants immediate access to their Medical access to their Medical Spending Account funds.Spending Account funds.

Can be used only for the Full Can be used only for the Full Medical Spending Account.Medical Spending Account.

Reimbursement with the Card:Reimbursement with the Card:

Health Care ProviderHealth Care Provider

The MSA is funded each paycheck.

When purchasing eligible medical services, the Card is presented for

payment like any other MasterCard®.

Any co-payments, deductibles or

uncovered amounts are paid

directly from the participant’s MSA.

Documentation requested via a

monthly statement MUST be provided. Requests will be in

Blue on the statement

The participant has immediate access Medical Spending Account Dollars!

THE TRANSACTION IS INSTANTANEOUS!

Reimbursement with the Card: Reimbursement with the Card:

PharmacyPharmacy

The MSA is funded

each paycheck.

The Card is presented to the pharmacistand processed via pharmacy’s claims

system.

Any co-payments, deductibles oruncovered amounts are paid

directly from the participant’s MSA.

The transaction isINSTANTANEOUSand PAPERLESS!

The participant has immediate access to Medical Spending Account dollars.

NO DOCUMENTATION NEEDED.

Health care ProvidersHealth care ProvidersExamples of eligible service providers:Examples of eligible service providers:

PodiatristsPodiatristsDoctors and Doctors and

Physicians Physicians Medical / Dental Medical / Dental

LabsLabsDentistsDentistsOphthalmologistsOphthalmologists

ChiropractorsChiropractors

Ambulance ServicesAmbulance ServicesChiropractorsChiropractors

Optical GoodsOptical GoodsOptometristsOptometristsHospitalsHospitals

Participating Participating PharmaciesPharmacies

Participating pharmacies can be found Participating pharmacies can be found

at at www.fbmc-benefits.com

Auto AdjudicationAuto Adjudication Known Co-Payment Matching to Merchant Category Codes (MCC).Known Co-Payment Matching to Merchant Category Codes (MCC).

South Carolina has a $ 15.00 co-South Carolina has a $ 15.00 co-payment at a doctor’s office. payment at a doctor’s office.

Doctors have a MCC of 8011.Doctors have a MCC of 8011.

When a transaction for $15.00 is When a transaction for $15.00 is presented to FBMC with an 8011 MCC, presented to FBMC with an 8011 MCC, FBMC automatically adjudicates the FBMC automatically adjudicates the expense as an office visit.expense as an office visit.

Example

Substantiation MethodsSubstantiation Methods


If a transaction is submitted to If a transaction is submitted to FBMC in the amount of $ 40.25 FBMC in the amount of $ 40.25 with an MCC of 8011, FBMC will with an MCC of 8011, FBMC will require third party require third party substantiation since $ 40.25 is substantiation since $ 40.25 is not a “known co-payment” under not a “known co-payment” under any health plan.any health plan.

Example


Submission of DocumentationSubmission of Documentation

Independent third party review.Independent third party review.

213-eligible expenses.213-eligible expenses.

EOB and/or documentation must EOB and/or documentation must include:include:– The date of the service, andThe date of the service, and– The $$ amount, andThe $$ amount, and– Description of services rendered, andDescription of services rendered, and– Service provider. Service provider.

Notification for Notification for requiredrequired DocumentationDocumentation

The Monthly Statement will notify participant of all The Monthly Statement will notify participant of all activity that occurred for all Money PLU$ accounts activity that occurred for all Money PLU$ accounts they are participating in to include:they are participating in to include:– Payroll contributions,Payroll contributions,– Employer and employee contributions,Employer and employee contributions,– Reimbursements; paper claims and EZ REIMBURSEReimbursements; paper claims and EZ REIMBURSE®® Card Card

transactions, andtransactions, and– A list of all transactions that require documentationA list of all transactions that require documentation. .

All transactions requiring documentation will be All transactions requiring documentation will be colored in BLUE.colored in BLUE.

If a transaction shows outstanding two consecutive If a transaction shows outstanding two consecutive times on a Monthly Statement, the card is times on a Monthly Statement, the card is suspended and correction procedures are initiated.suspended and correction procedures are initiated.

FBMC suspends card privileges. FBMC suspends card privileges. (Note, employee may still submit paper claims for eligible expenses)(Note, employee may still submit paper claims for eligible expenses)

FBMC uses Automatic Substitution Process.FBMC uses Automatic Substitution Process. Employee reimburses account with a personal check.Employee reimburses account with a personal check. Employer adjusts W-2.Employer adjusts W-2.

If/when a claim is determined to be If/when a claim is determined to be unqualified or cannot be auto-adjudicated unqualified or cannot be auto-adjudicated and documentation has not been received:and documentation has not been received:

Correction ProceduresCorrection ProceduresRevenue Ruling Revenue Ruling

What is Automatic Substitution?What is Automatic Substitution?

Example:Example: A participant uses the Card on 01/01/05 for A participant uses the Card on 01/01/05 for a health provider expense which was $30.00, but does a health provider expense which was $30.00, but does not provide documentation within the established not provide documentation within the established timeframe. The Card is suspended.timeframe. The Card is suspended.

Then, the participant later submits a paper Then, the participant later submits a paper reimbursement claim on 04/01/05 for a different reimbursement claim on 04/01/05 for a different expense in the amount of $50.00.expense in the amount of $50.00.

The automatic substitution process will apply $30.00 to The automatic substitution process will apply $30.00 to the outstanding Card transaction to payback the the outstanding Card transaction to payback the expense, $20.00 is sent to the participant, and the card expense, $20.00 is sent to the participant, and the card is automatically reinstated.is automatically reinstated.

Correction ProceduresCorrection Procedures

Correction ProceduresCorrection ProceduresRevenue Ruling ReclassificationRevenue Ruling Reclassification

Employer will treat unqualified expense as Employer will treat unqualified expense as business indebtedness and reclassifies the business indebtedness and reclassifies the ineligible expense as income to the ineligible expense as income to the participant.participant.– Employer receives a “reclassification report” at Employer receives a “reclassification report” at

the end of the run-out period. The amounts the end of the run-out period. The amounts shown on the report will reflect the amount shown on the report will reflect the amount that should be reclassified on the next W-2.that should be reclassified on the next W-2.

– Amounts are reporting on the W-2 for the tax Amounts are reporting on the W-2 for the tax year in which the unqualified expense is year in which the unqualified expense is written off business indebtedness.written off business indebtedness.

Correction ProceduresCorrection ProceduresRevenue Ruling ReclassificationRevenue Ruling Reclassification

Employee has until the end of the run-out period Employee has until the end of the run-out period to send in documentation. to send in documentation. (March 31, 2006)(March 31, 2006)

By this time the employee has opted in for the By this time the employee has opted in for the card, had the annual fee charged to the account card, had the annual fee charged to the account in January 2006, and the card is still suspended.in January 2006, and the card is still suspended.

The card is forever suspended if the The card is forever suspended if the documentation is not turned in, and the annual documentation is not turned in, and the annual fee will not be refundedfee will not be refunded..

Revenue Ruling Revenue Ruling ReclassificationReclassification

How to avoid reclassification.How to avoid reclassification. Each BA will receive a “payback report” in Each BA will receive a “payback report” in

September of 2005.September of 2005. BA’s couldBA’s could

– Send letters or make phone calls to the Send letters or make phone calls to the participants explaining why it is important for participants explaining why it is important for the documentation to be submitted. the documentation to be submitted.

– Communication should explain the Card will Communication should explain the Card will remain suspended, tax consequences, and remain suspended, tax consequences, and the assessment of the 2006 annual card fee.the assessment of the 2006 annual card fee.

Revenue Ruling Revenue Ruling Reclassification / Payback ReportReclassification / Payback Report

Fringe Benefits Management CompanyPayback Report – Summary by Work Location

The State of South CarolinaSept 1 2005 Transactions Settled 70 days before as of: 09/01/2005 Page 1 of 1

SSN NameEmployme

nt StatusPay Code

Total Trans

Amt ($)

Total Rejected

Amt($)

Total Payback

Amt ($)

Total Collection Amt($)

111111111Hall, Kendall ACTIVE A24 155.65 0.00 0.00 155.65




555555555Hall, Kendall TERM A24 500.00 250.00 150.00 100.00

Common Reasons for Card Common Reasons for Card Transaction Being DeclinedTransaction Being Declined

Participant did not activate the Card.Participant did not activate the Card.o The Card must be activated by calling the The Card must be activated by calling the

number on sticker affixed to front of card just number on sticker affixed to front of card just like any other MasterCardlike any other MasterCard®®..

Card has been suspended.Card has been suspended.

Election amount has been reached, or the Election amount has been reached, or the expense is greater that the Medical Spending expense is greater that the Medical Spending Account balance.Account balance.

Common Reasons for Card Common Reasons for Card Transaction Being DeclinedTransaction Being Declined

Health care provider has incorrect MCC (Merchant Health care provider has incorrect MCC (Merchant Category Code) in the terminal that accepts the Category Code) in the terminal that accepts the credit and debit cards.credit and debit cards.

University example: teaching hospital that was University example: teaching hospital that was using MCC codes of a College instead of a using MCC codes of a College instead of a Hospital.Hospital.

Sears Optical Centers: uses the department store Sears Optical Centers: uses the department store

MCC instead of the optometry MCC.MCC instead of the optometry MCC.

Pay for deductibles and co-payments.Pay for deductibles and co-payments.

Pay for non-covered medical Pay for non-covered medical expensesexpenses

Can be used for self and family Can be used for self and family membersmembers

MoneyPlu$ HEALTH SAVINGS MoneyPlu$ HEALTH SAVINGS ACCOUNTSACCOUNTS


Set aside money pre-tax $2,650/$5,250.Set aside money pre-tax $2,650/$5,250.

Over 55 + catch up - $ 700.00 in 2006.Over 55 + catch up - $ 700.00 in 2006.

Requires State Health Plan "Savings Plan“ Requires State Health Plan "Savings Plan“ Coverage. ( high deductible).Coverage. ( high deductible).

No other medical coverage (including Full MSA).No other medical coverage (including Full MSA).

Participant owned - "vested“.Participant owned - "vested“.

DDoes not require claims adjudication.oes not require claims adjudication.

Either pay provider or reimburse yourself.Either pay provider or reimburse yourself.

NBSC reports withdrawals at end of year.NBSC reports withdrawals at end of year.

Participant must have and keep matching Participant must have and keep matching documentation.documentation.


Cannot have other medical coverage, Cannot have other medical coverage, including Medical Spending Account.including Medical Spending Account.

Limited- Use Medical Spending Accounts Limited- Use Medical Spending Accounts are OK for certain expenses.are OK for certain expenses.

South Carolina’s HDHP does not cover South Carolina’s HDHP does not cover dental and Vision, so a Limited- Use dental and Vision, so a Limited- Use Medical Spending Account is available to Medical Spending Account is available to HSA participants.HSA participants.


MoneyPlu$ HEALTH SAVINGS MoneyPlu$ HEALTH SAVINGS

ACCOUNTSACCOUNTS FEESFEES

Annual $20 NBSC VISAAnnual $20 NBSC VISA®® fee (or $2 per month).fee (or $2 per month).

The fee is waived once the account balance is $2,500 or The fee is waived once the account balance is $2,500 or

more.more.

$0.50 fee per check processed.$0.50 fee per check processed.

A starter supply of checks are free. ( call to order)A starter supply of checks are free. ( call to order)

No additional MoneyPlu$ fees.No additional MoneyPlu$ fees.

MoneyPlu$ HEALTH SAVINGS MoneyPlu$ HEALTH SAVINGS ACCOUNTS are Bank AccountsACCOUNTS are Bank Accounts

Accounts are subject to the USA PATRIOT Accounts are subject to the USA PATRIOT Act.Act.

Signatures and beneficiaries are required.Signatures and beneficiaries are required.

Will not advance money nor can it be used Will not advance money nor can it be used at an ATM.at an ATM.

NEW INVESTMENT OPTIONSNEW INVESTMENT OPTIONS

Balance of $3,500 or more.Balance of $3,500 or more.

Must leave $1,000 in HSA checking account.Must leave $1,000 in HSA checking account.

Fidelity Family, selected funds, internal fund Fidelity Family, selected funds, internal fund expenses.expenses.

Account charges ($60 annual fee, which includes Account charges ($60 annual fee, which includes all trades, phone calls, support, etc.; debited from all trades, phone calls, support, etc.; debited from checking account in October). checking account in October).

Synovus/NBSC web site Synovus/NBSC web site www.nationalbanksc.comwww.nationalbanksc.com..

HSA ACCOUNT FUNDS HSA ACCOUNT FUNDS FLOWFLOW

Payroll deducts and sends to FBMC.Payroll deducts and sends to FBMC.

FBMC reconciles, tests for contributions limit.FBMC reconciles, tests for contributions limit.

FBMC remits to Synovus/NBSC.FBMC remits to Synovus/NBSC.

Synovus/NBSC reconciles, tests, posts to account.Synovus/NBSC reconciles, tests, posts to account.

NEW IRS "GRACE PERIOD" RULINGNEW IRS "GRACE PERIOD" RULING

Allows for participants to incur eligible Allows for participants to incur eligible expenses from the previous plan year expenses from the previous plan year MSA funds in the new plan year through MSA funds in the new plan year through March 15March 15,, 2006. 2006.

A plan year is still defined as a 12 A plan year is still defined as a 12 months.months.

NEW IRS "GRACE PERIOD" RULINGNEW IRS "GRACE PERIOD" RULING DEFINITIONSDEFINITIONS

Grace periodGrace period –the time in which participants can –the time in which participants can access previous plan year funds for eligible access previous plan year funds for eligible expenses with a date of service in the new plan expenses with a date of service in the new plan year. year.

Ends March 15, 2006.Ends March 15, 2006.

Eg:Eg:2005 MSA has $ 50.00 in it. The participant 2005 MSA has $ 50.00 in it. The participant incurs an expense for $ 50.00 on incurs an expense for $ 50.00 on 01/28/2006. The participant claim will be 01/28/2006. The participant claim will be reimbursed from the 2005 balance, reimbursed from the 2005 balance, andand the the participant does not “lose” the funds!participant does not “lose” the funds!

NEW IRS "GRACE PERIOD" RULINGNEW IRS "GRACE PERIOD" RULING DEFINITIONSDEFINITIONS

Run-out periodRun-out period – the time in which participants can – the time in which participants can send in paper claims for eligible expenses with a send in paper claims for eligible expenses with a date of service from the previous plan year in order date of service from the previous plan year in order to exhaust previous plan year funds.to exhaust previous plan year funds.Ends March 31 and runs concurrently with the grace Ends March 31 and runs concurrently with the grace period.period.

Eg:Eg:2005 MSA has $ 50.00 in it. The participant 2005 MSA has $ 50.00 in it. The participant has documentation for an expense for $ has documentation for an expense for $ 50.00 on 12/28/2006. The participant claim 50.00 on 12/28/2006. The participant claim will be reimbursed from the 2005 balance, will be reimbursed from the 2005 balance, andand the participant does not “lose” the the participant does not “lose” the funds!funds!

CLAIMS DURING CLAIMS DURING "GRACE" PERIOD"GRACE" PERIOD

FIFO – first in first out.FIFO – first in first out.

FBMC can pay paper claims from FBMC can pay paper claims from both "old" and "new" money.both "old" and "new" money.

FBMC EZ REIMBURSEFBMC EZ REIMBURSE®® Card can pay Card can pay from both "old" and "new" money.from both "old" and "new" money.


Example of FIFO – paper claimsExample of FIFO – paper claims2005 MSA balance = $ 100.002005 MSA balance = $ 100.002006 MSA balance = $1000.002006 MSA balance = $1000.00Participant incurs expense on 01/15/2005 for $50.00. Paper Participant incurs expense on 01/15/2005 for $50.00. Paper claim is submitted on 01/20/2005. claim is submitted on 01/20/2005.

2005 MSA balance = $ 50.002005 MSA balance = $ 50.002006 MSA balance = $1000.002006 MSA balance = $1000.00Participant then submits paper claim for expenses dated Participant then submits paper claim for expenses dated 11/15/2005 in the amount of $ 50.00. $ 50.00 is paid.11/15/2005 in the amount of $ 50.00. $ 50.00 is paid.

2005 MSA balance = $ 0.002005 MSA balance = $ 0.002006 MSA balance = $1000.002006 MSA balance = $1000.00


Example of FIFO – EZ REIMBURSEExample of FIFO – EZ REIMBURSE® ® Card and a run-out claim.Card and a run-out claim.

2005 MSA balance = $ 100.002005 MSA balance = $ 100.002006 MSA balance = $1000.002006 MSA balance = $1000.00Participant swipes for an expense on 01/15/2005 for Participant swipes for an expense on 01/15/2005 for $150.00. The system will automatically split the payment.$150.00. The system will automatically split the payment.

2005 MSA balance = $ 0.002005 MSA balance = $ 0.002006 MSA balance = $950.002006 MSA balance = $950.00Participant then submits paper claim for expenses dated Participant then submits paper claim for expenses dated 11/15/2005 in the amount of $ 50.00. The $ 50.00 is 11/15/2005 in the amount of $ 50.00. The $ 50.00 is rejected since the 2005 MSA is out of funds.rejected since the 2005 MSA is out of funds.

2005 MSA balance = $ 0.002005 MSA balance = $ 0.002006 MSA balance = $950.002006 MSA balance = $950.00

HOUSEKEEPING - HOUSEKEEPING - ADMINISTRATIVEADMINISTRATIVE

FBMC sends a 20% supply of hard FBMC sends a 20% supply of hard copy forms.copy forms.

Return fall enrollment forms on a Return fall enrollment forms on a timely basistimely basis

Send payrolls on a timely basis.Send payrolls on a timely basis.

HOUSEKEEPING - HOUSEKEEPING - ADMINISTRATIVEADMINISTRATIVE

EVERY form signed by EE MUST come EVERY form signed by EE MUST come to BA first.to BA first.

BA’s MUST fill out the bottom of the BA’s MUST fill out the bottom of the form completely.form completely.

HOUSEKEEPING - HOUSEKEEPING - CARD & CLAIMSCARD & CLAIMS

Auto Adjudication --- ONLY known co-payments Auto Adjudication --- ONLY known co-payments and Rx transactions are auto adjudicated. and Rx transactions are auto adjudicated.

Participants MUST review monthly statements for Participants MUST review monthly statements for requested documentation.requested documentation.

“ “ If it’s in blue, there’s something you gotta do!”If it’s in blue, there’s something you gotta do!”

Send EZ REIMBURSESend EZ REIMBURSE®® Card claims documentation Card claims documentation on the Fax Transmittal Sheet.on the Fax Transmittal Sheet.

HOUSEKEEPING - HOUSEKEEPING - CARD & CLAIMSCARD & CLAIMS

All documentation ( card or paper) MUST All documentation ( card or paper) MUST HAVE:HAVE: legible claims with - date and type of servicelegible claims with - date and type of service $ amount of service$ amount of service name & address of providername & address of provider Manual pharmacy claims must show above, Manual pharmacy claims must show above,

plusplus Rx numberRx number name of drugname of drug

All claims MUST be signed.All claims MUST be signed.

Thank YouThank You ! !

Go to Go to www.fbmc-benefits.comwww.fbmc-benefits.com for for Claims FormsClaims Forms

FAQsFAQsParticipating Pharmacy listsParticipating Pharmacy lists

or or call 1-800-342-8017 call 1-800-342-8017

Mon-Fri, 7 a.m. – 10 p.m. for more Mon-Fri, 7 a.m. – 10 p.m. for more

informationinformation..

Documents

Proprietary and Confidential FBMC & The State of South Carolina MONEYPLU$ Training August / September 2005