Before You Get Started

If offering both HRA and FSA, you only need one Administration Agreement. You should make sure to complete Section 4, which allows you to specify which account should pay first.

Getting Started

Choose a Medical Plan

While an FSA can be paired with any kind of plan design, choosing a higher deductible plan offers a lower premium. You may wish to devote some of these savings to fund the FSA. If a deductible plan is new to your employees, this can help them adjust to the change in out-of-pocket expenses.

Design Your FSA

Use the HRA/FSA Administration Agreement to walk you through these questions that will help you set up your FSA.

1. Which expenses do you want the FSA to cover?
You may choose to offer an FSA that covers health or dependent care, or both.

Health Care: A general-purpose health FSA can be used to pay for qualified out-of-pocket medical, prescription, dental, and vision expenses that are not covered under your health plan. Eligible expenses include those considered deductible by the IRS for Federal income tax purposes.

CDPHP also offers limited purpose FSAs, which allow you to decide which services are reimbursable: medical (covered and non-covered), dental, vision, prescription, or any combination of these options.

Dependent Care: A dependent care FSA allows for reimbursement for child or elder day care in order to allow the subscriber and spouse to work. Once the services have been completed, the enrollee must file a claim for reimbursement. Unlike the health FSA, employees must have funds saved up in their dependent FSA account before they can use them.

2. What pledge amount limits do you want to set?
Annually, employees elect a pre-determined amount to be voluntarily withheld from their pay by their employer (often called a salary reduction agreement). Currently, the most an employee can annually defer under a health FSA is $2,550. Limits are determined by the IRS.

3. How much will you contribute to your employees’ FSAs, if anything?
You can match employee contributions as a percentage, up to a set amount, or just as a set amount. Your match cannot exceed the amount of the employee contribution. You also do not have to contribute to the account.

4. Do you want to allow a 77-day grace period?
You may include a grace period that extends the current plan year by 77 days. Employees have a 90-day run-out period at the end of the plan year to submit claims for expenses that occurred that year. After that, they forfeit any unused funds to the employer. Implementing the grace period means the 90-day run-out begins after the 77-day grace period is over.

5. Do you want to allow employees to carry over $500 of their health FSA into the next plan year?
For health FSAs, you may allow employees to carry over up to $500 into the next plan year. This carryover option cannot be combined with the health FSA grace period.  This option is not available for dependent care FSAs.

6. Do you want to offer a debit card?
A debit card is available for all FSA-eligible expenses for health FSAs. It is not available for dependent care FSAs. Please note: If you offer an HRA and a health FSA, your employees will receive one debit card for both.

7. What is your payroll schedule frequency and your first payroll deduction date?
This is the final piece of information we need to ensure your FSA gets set up correctly.

Provide bank account information.

Capital District Physicians’ Healthcare Network, Inc.(CDPHN) needs your bank account information to retrieve the funds when employees submit claims or use the debit card for qualified expenses. In order to do this, please keep the following guidelines in mind:

  • You will need two Automated Clearing House (ACH) Authorization Forms: one for CDPHN and one for the debit card vendor. CDPHN or the debit card vendor will pull the funds directly from your bank account.

  • It is highly recommended that you use a Zero Balance Account (ZBA), a checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.

Complete the Business Associate Contract

This is included as part of the Administration Agreement.

Complete the Enrollment Roster

Collect FSA Election Forms

Gather FSA Election forms from your participating employees. One form for each enrolled employee is required.

Sign and Submit Documentation

Completed paperwork should be submitted by the 15th of the month prior to the plan’s effective date.

  • Employers: Provide a copy to your sales representative

  • Brokers: Upload single PDF file to iConnect or provide a signed copay to your sales representative.

What Happens Next?

Sign Contracts and Adopt Plan Documents. You will be emailed Plan Document and Summary Plan Description (SPD) templates for your authorization and signature, to be completed and returned to CDPHP by your group’s effective date. It is your responsibility to then share the SPD with your employees.