Notionals 101 Flashcards
TRUE or FALSE: The IRS requires 95% of claims to be substantiated
False - The IRS requires 100% of claims to be substantiated
Name the 3 scenarios in which a claim would auto-substantiate
1) When an account holder uses the debit card at a 90% IIAS-approved pharmacy
2) When the account holder’s claim amount matches a copay amount
3) When the account holder’s claim has been set up and approved as a recurring copay amount
If additional substantiation is required, the documentation must include what?
1) Name of provider
2) Type of product or service
3) Date of service
4) Name of recipient
5) Amount of product or service
When is a debit card suspended?
When the debit card is used to pay for an ineligible expense
Why are Receipt Reminder Letters sent?
Receipt reminder letters are sent for claims that require further substantiation.
How are Receipt Reminder Letters sent and how often?
Receipt reminder letters are sent via mail to accountholders every 15 days.
How many times do we send a Receipt Reminder Letter? What happens when we sent the last one?
Total of 3 notices are sent; Upon delivery of 3rd Receipt Reminder, a Notice of Denial is sent informing the participant of the denied claim.
When sending in a receipt for a denied claim, a participant must send in what along with the documentation?
Receipt Reminder Letter
What can the participant do if documentation cannot be provided for a denied claim?
The participant can offset a claim by filing a manual claim and attaching documentation for expenses paid out of pocket that are equal to or greater than the amount of the denied claim
When can denied claims no longer be submitted?
Once the plan year (including any runout/grace period) is over
What should employers do to recover funds paid out for claims in a denied status at the end of the plan year?
Seek legal counsel
TRUE or FALSE: HSA Bank offers employers the ability to allow for claims under $100 to be auto-approved.
True - If an employer selects this option, they are asked to sign an agreement holding HSA Bank harmless.
What are the 5 corrective actions that can be taken as part of the Pay & Chase process?
- Suspend (deactivate) the debit card
- Demand repayment
- Withhold payment from compensation (to the extent allowed by law)
- Apply a claims substitution or offset
- Treat the payment as any other business indebtedness
What happens if a claim is never paid via the Pay & Chase process?
If all corrective options fail, employer will treat claim amount as taxable wages on the W2, even if employee is no longer employed.
Define Non-Discrimination Testing (NDT)
The IRS requires that Section 125 Flexible Benefit Plans pass a series of nondiscrimination tests each year. These tests are designed to ensure that plans are not discriminating in favor of Highly Compensated Employees (HCEs) or KEY Employees regarding eligibility for pre-tax contributions and actual benefits provided.
