The following information applies to both the DCSA and HCSA, as noted. It’s important that you read this information before deciding to enroll in a spending account, and that you refer to it periodically, so that you use the spending accounts properly.

Account Rules

Health Care and Dependent Care Spending Accounts are governed by a variety of IRS rules and restrictions. The following guidelines address some of these issues and may help you decide whether to participate.

• Plan your expenses carefully-spending accounts are forfeitable benefits.

That is, you forfeit any money left in a spending account after the end of the plan year.[1] You may not carry any money over for use in the next plan year or receive a refund of your unused contributions.

You have until March 31^st (postmark date) of the next year to file claims for expenses you have incurred by December 31^st of the prior year (or before the date your employment ends, if applicable).

• You may not transfer money between accounts, nor may you use funds from your HCSA to pay for dependent care expenses (or vice versa).

If you want to reimburse yourself for both eligible health care and child or elder care expenses, you must participate in both spending accounts.

• You may not claim a tax credit or deduction for any expenses you reimburse from a spending account.

However, you may claim a tax credit or deduction for any expenses not reimbursed through one of these accounts, subject to IRS rules.

• Once you enroll in a spending account, you may not change your election or contribution levels for the rest of the year.

The only exception to this rule is if you have an applicable qualifying life status change, and you make the applicable change on BenefitsWeb through InfoBank within 31 days of the status change (60 days for birth or adoption of a child). For more details, see page 11.

Because contributions to an HCSA or DCSA reduce your taxable income, your payroll taxes and Social Security contributions will be reduced.

The effect on your future Social Security benefits will generally be minimal because they are based on your lifetime of covered earnings. For more information, check with your local Social Security Office regarding your particular situation.

Other Facts to Consider

• - Just as with your other benefit elections, the contribution amount you elect remains in effect the entire plan year. The only time you may change your contribution amount is if you have a qualifying life status change and you access BenefitsWeb through InfoBank within 31 days (60 days for birth or adoption of a child) to adjust your contribution amount(s) accordingly. (For more details on status changes, see page 11.)
• - The spending accounts are forfeitable benefits. You have until March 31^st (postmark date) to file claims for expenses incurred through December 31^st of the prior year. Any money left in a spending account after the close of this period will be forfeited according to IRS rules. It is important to estimate your expenses carefully, and to track your usage of your account(s)-you can check the status of your account online at www.aetna.com. You will also receive a summary of your account activity periodically.
• - See your Summary Plan Description for information regarding your spending accounts in the case of termination of employment.

Changing Your Account Election(s)

IRS administration guidelines limit the dates/amounts that reimbursement(s) can be applied to your account(s), and when you can enroll and/or change your election. In some instances different guidelines are applicable to HCSAs and DCSAs. The following are some examples.

Scenario 1

• You return to work on June 16 from an unpaid Family and Medical Act leave of absence (due to caring for your newborn).
• You are eligible (until July 16) to enroll in the DCSA.
• On July 1 you decide to enroll in the DCSA.

In this case, you can submit claims to your Dependent Care Spending Account for expenses incurred from July 1 to December 31 and be reimbursed up to the amount available in your account.

Scenario 2

• You enroll in the HCSA on February 1 when you are hired, choosing to contribute $400.
• On April 15 you marry and increase your HCSA election for the plan year to a total of $1,000.

Limitation: You can submit $400 worth of claims to your HCSA for claims incurred from February 1 to December 31. However, you can submit the remaining $600 to your HCSA only for claims incurred from April 15 to December 31.

[1] Any forfeited money is applied toward the Company’s cost of administering the spending account program.

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Questions about your employee benefits or other Human Resources issues? Contact the Workplace Solutions Center at (888) 471-2271.