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Public Employees' Benefit Board

PEBB October 2006 Newsletter
Hot Benefit Topic: IRS Flexes FSA Rules
large bills
If you haven’t had a healthcare FSA before, it may be because of the IRS’ scary “use it or lose” it rule. The rules have changed a little with the new FSA “grace period.” So you may want to rethink your choices during Open Enrollment.
 
With a healthcare flexible spending account (FSA) you can pay for out-of-pocket healthcare expenses with tax-free money. You save on taxes and healthcare costs, and you get to use more of your income for other things.
 
Before the new grace period, if you didn’t incur the same level of out-of-pocket healthcare costs during the year as you had deposited in your account, you lost access to the leftovers on Jan. 1. You could still be reimbursed for expenses you had through Dec. 31 as long as you submitted claims by the March 31 deadline. But you couldn’t use leftover funds to pay claims incurred after December 31.
 
With the new grace period, you can now incur expenses in the first two-and-a-half months of the new year to use last-year’s leftovers.
 
Here’s an example of how it worked before and after the new grace period rule.
 
Before the Grace Period
 
Jim Doe enrolled for a healthcare FSA for 2005. He had $250 deposited to the FSA each month, for a total of $3,000 that year. By December 31, he had used $2,500 out of pocket to cover things like over-the-counter drug costs, prescription co-payments and dental costs not covered in his plans. He had until March 31, 2006, to claim eligible 2005 expenses. But, because he had no additional 2005 expenses to claim, he lost the remaining $500.
 
After the Grace Period
 
Jim enrolled in a healthcare FSA for 2006. He’s having $250 deposited to the FSA each month, for a total of $3,000 this year. If, by December 31, he has again used only $2,500, he can still access the remaining $500. He has from January 1 through March 15, 2007 -- the grace period -- to incur eligible expenses and receive reimbursement for those expenses from funds remaining in his 2006 account.
 
“Use it or Lose It” Still in Force
 
You still need to be careful when you estimate your potential out-of-pocket healthcare costs if you enroll in a healthcare an FSA for 2007. “Use it or lose it” will still apply. That means you have to request reimbursement for all current year and grace period costs by March 31, 2008.
 
For More Information
 
BenefitHelp Solutions (BHS) administers PEBB’s FSA program. If you have questions about FSAs, eligible expenses or how the rules apply, visit the BHS Web site, or call (800) 556-2230.
 
The PEBB Web site also offers healthcare FSA information. It includes a list of eligible and ineligible expenses, along with a worksheet to help estimate annual expenses.
 
 

NOTE:  The grace period applies to both healthcare and dependent care FSAs. Both types of FSAs are annual accounts. You must enroll during Open Enrollment to have an FSA for the following year. To enroll during Open Enrollment,  go online . Or if you want to enroll on paper,  go here for the form .
 
Do you have a Benefit Hot Topic you would like PEBB to address? Let us know via e-mail to pebb.hottopics@state.or.us.
 

Mental Health Screening Day, Oct. 6
sad teenage girl

 Did you know?
 
A new Harvard Medical School study shows that approximately 26 percent of Americans have shown signs of having a mental disorder in the past year and that these disorders often go undiagnosed and untreated. The most common of these disorders is depression.
 
For most people, it’s hard to figure out the line between “I’ve been moody lately” and “I have depression.”  Some people may not even want to know where that line is because of out-of-date ideas about mental health.
 
But everyone should know that depression is a highly treatable medical condition. With treatment and counseling, most people get better.
 
National Depression Screening Day® (NDSD) has been helping people make that distinction for the last 15 years. This year NDSD has become “Mental Health Screening Day” because it covers many types of mental health problems.
 
Cascade Centers, PEBB’s employee assistance program (EAP), will offer free mental health screenings on Friday, October 6, from 8 a.m. to 5 p.m. This totally confidential phone screening with an EAP counselor can equip PEBB members with an assessment, recommendations for treatment and/or other resources.
 
Calling the EAP is an easy first step if you’re concerned about your own mental health or the mental health of someone close to you. For an appointment, screening or information, call Cascade Centers at (503) 639-3009 or (800) 433-2320 statewide.

You Have the Power to Stay Healthy
healthy worker
Make a good choice for a healthy future. The choices we make now affect how we will feel in years to come. The state’s Healthy Worksite Initiative (HWI) is working hard to make “the healthy choice the easy choice,” so can have more power to stay healthy at work.
 
A few tips from the HWI:
  • If your site is hosting a PEBB-sponsored Health Screening, take advantage of this free chance to learn your important health numbers.
  • Take the stairs instead of the elevator, whenever possible
  • Encourage your worksite to develop guidelines around healthy food options for employees
  • Contact your vending machine company and request healthy options. The phone number is listed on the machine.
 
You can create a healthy environment at home, too. Visit the Healthy Worksites Initiative Web site for easy suggestions. You  have the power to improve your health. Yes, you can do it.

My Story: Even College-age Kids Need Healthcare Guidance
college age man
“When my son was home from college this summer, he was still covered on my PEBB medical plan. He called one day after a nurse practitioner prescribed an allergy medication for him.
 
He said the co-payment at the drug store was $50! For an allergy medicine! So I knew right away it was a non-preferred drug and not on my plan’s formulary.
 
With PEBB’s new prescription plan this year, I made sure to talk to my husband about it. If we get a new prescription, we both know to ask our doctor if there’s generic or preferred brand that’s just as effective.
 
But I didn’t think to tell my son. So I ended up with a $50 charge on my credit card for something he may have been able to get over the counter.
 
But it was a one-time prescription for him. And, now he knows how to be a wiser consumer with his own healthcare coverage.”
 
                                    Julie K.,* PEBB Member (*Name changed for confidentiality)
 

 What's Your Story?
What have you learned about working with the healthcare system to make sure you get value for your dollars? Share your completely anonymous story with fellow PEBB members. E-mail mystory.pebb@state.or.us. Use a non-state computer for confidentiality.
 

Benefit Statements a Reminder for Open Enrollment
couple at computer
PEBB member employees should receive their benefit statement in the mail early this month. This handy printout shows all your current benefits, dependents, coverage levels, etc. It's a reminder that the month of October is Open Enrollment for PEBB benefits. If you want to enroll in or change your benefits for 2007, now's your opportunity to enroll online.
 
Even if you don't want to change benefits, go over your benefit statement thoroughly to be sure it correctly reflects your current benefits, which will continue for 2007. If you see what may be an error, contact your agency or benefits office.
 
NOTE: If you're currently covering an overage dependent who will no longer be eligible for PEBB coverage in 2007, you can go online during Open Enrollment to remove that dependent from coverage for the 2007 plan year.