Paul M. Weber

October, 2008

Jack Cota’s Retirement

This month Director Jack Cota retired after 37 years of service. Jack was a delegate the majority of that time and a Director since May 1, 2007. He was a long-time insurance trustee and member of the Legal Committee. We wish Jack and his wife Becky a long and happy retirement together!

Sworn Healthcare Flexible Spending Account (HCFSA)

The open enrollment for this new benefit is the month of October. Here are some frequently asked questions and meeting dates that will explain the program:
1. How much can I contribute to a Healthcare Flexible Spending Account?
You may set aside from $300 up to $3,000 annually in a Healthcare Flexible Spending Account. Your contributions come out of your check each pay period. Your per-pay-period contribution must be a whole dollar amount. The maximum deducted per pay period will vary based upon whether you enroll during annual enrollment (October 1 through October 31), the correction period (November 1 through November 20), or in response to an eligible family status change during the year.
2. May I change my Healthcare Flexible Spending Account contributions during the year?
Yes, as long as you have an eligible change in family status, and the change in your contributions is consistent with your family status change. Refer to your enrollment package or contact the Employee Benefits Division at (213) 978-1655 for more information.
3. If I don’t enroll in a Healthcare Flexible Spending Account now, but I (or my spouse or domestic partner) have a baby during the year, can I set up an account then?
Yes. When the child is born or adopted, you may open a Healthcare Flexible Spending Account or increase the amount you are already contributing. A child born to a domestic partner is eligible only if you claim the child as a dependent on your tax return, or if the child is your “health plan tax dependent” as defined by the IRS.
The IRS defines a “health plan tax dependent” as your children and other relatives – or an unrelated person who lives with you for the entire year – if the child, relative or other person receives more than half of his or her support from you; is a U.S. citizen, resident or national or a citizen of Mexico or Canada; and is not claimed as a dependent on anyone else’s tax return.
To complete and submit the required “health plan tax dependent” form or for more information, please contact the Employee Benefits Division.
4. Can I use my Healthcare Flexible Spending Account for my domestic partner’s health expenses?
If your domestic partner meets the IRS definition of “health plan tax dependent,” you can use your account for his or her eligible expenses.
The IRS defines a “health plan tax dependent” as your children and other relatives – or an unrelated person who lives with you for the entire year – if the child, relative or other person receives more than half of his or her support from you; is a U.S. citizen, resident or national, or a citizen of Mexico or Canada; and is not claimed as a dependent on anyone else’s tax return. As stated above, the required form can be obtained from the Employee Benefits Division.
5. If I don’t use up my full balance, what happens to the money?
Any money left in your account at the end of the calendar year may be used to cover eligible expenses you had while you were contributing to the account during that calendar year. You must file a claim by April 30 of the following year. Then, any money that is left will be forfeited, according to IRS regulations.
6. What happens to my Healthcare Flexible Spending Account if I leave employment with the City mid-year?
Please contact the Employee Benefits Division at (213) 978-1600 regarding continuation rights under the Healthcare Flexible Spending Account. If you choose to continue participation in the program, all claims for reimbursement still must be submitted by April 30 of the following year.
7. How do I know which of my expenses are eligible for reimbursement from a Healthcare Flexible Spending Account?
Go to www.creativebenefits.com to view a complete list of eligible expenses. Scroll down and click “Check your eligible expenses” under “Participants/Employees.” Enter “creative” when you are asked for a password.
8. Can I participate in a Healthcare Flexible Spending Account even if I am not enrolled in Flex medical coverage?
Any out-of-pocket expense that you have – or your spouse or any eligible dependent, as defined in #3 and #4, has – may be considered an eligible Healthcare Flexible Spending Account expense even if you or your dependents are not enrolled in Flex medical coverage.
This program is being offered to sworn and civilian employees of the City of Los Angeles, excluding employees of the Department of Water & Power.
9. Can I use my Healthcare Flexible Spending Account for over-the-counter medications?
You may use your account for many over-the-counter medications used for treating an injury or illness. For a complete list of eligible expenses, including eligible over-the-counter medications, go to www.creativebenefits.com. Scroll down and click “Check your eligible expenses” under “Participants/Employees.” Enter “creative” when you are asked for a password.
10. Can I file a claim for services I receive before the calendar year begins if I’m not billed until after the calendar year starts?
No. Based on IRS guidelines, a qualified expense is incurred at the time the service is provided, not when you are billed or when you pay for the service. As a result, you can file claims only for eligible expenses you have during the calendar year while you are enrolled and contributing to the account.
11. How often will I be reimbursed?
You will be reimbursed whenever you submit a claim – until you have been reimbursed up to the amount you elected to contribute for the year. Reimbursements are processed weekly on Tuesdays.
12. Does Creative Benefits offer the Health Care Flexible Spending Account reimbursement form online?
Creative Benefits offers an online claim entry system. As a participant, you may log into your account through its website and use the claim entry process. Once completed, you may print the form, sign and fax it with the required documents necessary for processing.
13. Can I receive my reimbursement via direct deposit?
Yes. Simply obtain a direct deposit authorization form by going to the Creative Benefits website listed under “Contacts.” Once on the site, go to the “Participant” dropdown menu, then click Flexible Spending, Resources, Worksheets/Forms, and Direct Deposit Authorization PDF.
Submit your completed form and a copy of a voided check by fax or by mail following the instructions on the form.
14. How do I get a debit (payment) card for my Healthcare Flexible Spending Account?
Contact Creative Benefits at (888) 295-5656 for information on how to request a debit card. You can also download the card request form at www.creativebenefits.com/participants/pdf/pcreq.pdf. If you also have a Dependent Care Reimbursement Account, you can use the same debit card for both accounts.
15. What happens if I have a debit card and my expense at the register exceeds the current balance in my Healthcare Account?
The debit card will not allow a transaction for any amount exceeding the available account balance. The card transaction will fail.
16. Do I have to use two forms of payment if I have the debit card and want to use it at the store, but my purchases are a combination of healthcare eligible and non-eligible?
The debit card cannot be used for non-eligible expenses. With the inventory control system that the IRS requires merchants to utilize, stores are able to advise you regarding what items may be charged on the debit card and what must be paid with an alternative form of payment.
IRS regulations allow this debit card to only be used at grocery or drug stores that have an inventory control system in place that can identify eligible purchases and apply them to the card accordingly. You will not be able to use the card at locations that do not have the required system in place. Most major chains have implemented the required system.
17. If I participate in both the Healthcare and Dependent Care Accounts, can I use the debit card for both accounts if my day care provider accepts such cards?
Yes, you may use the card for both types of services. The system reads the merchant code to determine the type of provider and applies the charge to the correct account. This verification process ensures that the card is not used at a non-qualified provider by mistake. For example, the debit card cannot be used at a gas station or restaurant.
18. If I submit a claim for reimbursement and do not have enough money in my Healthcare Flexible Spending Account, what happens?
Based on IRS rules, you are allowed to receive reimbursement up to your full annual election regardless of the amount contributed to date. Please note that the debit (payment) card cannot be used to claim money in excess of your account balance. Claims in excess of your account balance must be submitted using the other options described in #s 12 and 13.
19. How can I check my account balance?
You are able to check your balance through the Creative Benefits automated system or by logging into your account at www.creativebenefits.com. Creative Benefits also sends monthly balance reminders via e-mail if you provide your e-mail address. The balance reminders are also sent following any account activity. For participants who do not provide an e-mail address, Creative Benefits sends quarterly account statements to the address on file.
20. Can I receive an e-mail if my account balance falls below a certain amount?
At this time, Creative Benefits does not have the capability to send a notice when a participant’s balance falls below a certain amount.
21. Can I transfer money from my Healthcare Flexible Spending Account to my Dependent Care Reimbursement Account or vice versa?
No. The accounts work separately. Based on IRS rules, you cannot transfer money between the accounts.
Attend a Seminar to Learn More!

You may contact the Employee Benefits Division at (213) 978-1655 or go to www.lacity.org/per/index.htm. Click on “Benefits Info” and select “LAPD and LAFD sworn employees” to read more about the accounts. v