Most cafeteria plans offer two major different<unk> s focused on medical and dependent care expenses. A few cafeteria plans offer other types of<unk> s, especially if the employer also offers an HSA. Participation in one type of<unk>  does not affect participation in another type of<unk> , but funds cannot be transferred from one<unk>  to another. Health<unk>  The most common type of<unk>  is used to pay for medical and dental expenses not paid for by insurance, usually deductibles, copayments, and coinsurance for the employee's health plan. As of January 1, 2011, over-the-counter medications are allowed only when purchased with a doctor's prescription, except for insulin. Over-the-counter medical devices, such as bandages, crutches, and eyeglass repair kits, are allowable. Generally, allowable items are the same as those allowable for the medical tax deduction, as outlined in IRS publication 502. Prior to the enactment of the Patient Protection and Affordable Care Act, the Internal Revenue Service permitted employers to enact any maximum annual election for their employees. Patient Protection and Affordable Care Act amended Section 125 such that<unk> s may not allow employees to choose an annual election in excess of a limit determined by the Internal Revenue Service. The annual limit was $2,500 for the first plan year beginning after December 31, 2012. The Internal Revenue Service will index subsequent plan years' limits for cost-of-living adjustments. For 2018, this adjustment increases the contribution limit to $2650. Employers have the option to limit their employees' annual elections further. This change starts in plan years that begin after December 31, 2012. The limit is applied to each employee, without regard to whether the employee has a spouse or children. Non-elective contributions made by the employer that are not deducted from the employee's wages are not counted against the limit. An employee employed by multiple unrelated employers may elect an amount up to the limit under each employer's plan. The limit does not apply to health savings<unk> s, health reimbursement arrangements, or the employee's share of the cost of employer-sponsored health insurance coverage. Some employers choose to issue a debit card to their employees who participate in the<unk> . Participants may use the debit card to pay for their<unk> -eligible expenses at the point of sale. Pharmacies and grocery stores who choose to accept the debit card as payment must disallow transactions at point of sale if the participant attempts to pay for items that are not eligible under an<unk> . In addition, employers still must require employees to provide itemized receipts for all expenses charged to the debit card. The IRS allows employers to waive this requirement when an individual uses the debit card at a pharmacy or grocery store that complies with the above procedure. The IRS also allows employers to waive this requirement when the amount charged to the debit card is a multiple of a co-pay of the employee's group health insurance plan. In most cases, the<unk>  administering firm will prefer actual insurance Explanations of Benefits (EOBs) clearly representing the patient portion of any medical expense, over other, more vague documentation. This requirement is becoming less cumbersome as more insurances allow patients to search for past EOBs on their websites. Dependent care<unk> <unk> s can also be established to pay for certain expenses to care for dependents while the legal guardian is at work. This includes child care for children under the age of 13 and day care for an individual of any age who is incapable of self-care, lives with the taxpayer for more than one-half of the tax year, and is either the taxpayer's spouse or dependent. The<unk>  can be used to pay for day camps for an eligible individual but not overnight camps. The<unk>  cannot be used for long-term care for individuals who live in an outside facility, such as in a nursing home. Federal law limits the dependent care<unk>  to $5,000 per year, per household. Married spouses can each elect an<unk> , but their total combined election cannot exceed $5,000 per year. If a household were to have withdrawals in excess of the limit, the household would be required to pay income tax on the excess. Unlike medical<unk> s, dependent care<unk> s are not "pre-funded"; employees cannot receive reimbursement for the full amount of the annual contribution on day one. Employees can only be reimbursed up to the amount they have had deducted during that plan year. If married, both spouses must earn income in order for either of them to be eligible for a Dependent Care<unk> . The only exceptions are if the non-earning spouse is disabled or a full-time student. If one spouse earns less than $5,000 then the benefit is limited to whatever that spouse earned. See IRS Form 2441 Part III for details. Other<unk> s There are<unk>  plans for non-employer sponsored premium reimbursement and parking and transit expense reimbursement. The individual premium<unk>  allows an employee to pay for his or her spouse's insurance with pre-tax dollars as long as the other coverage is a non-employer-sponsored, is considered an individual plan, and is directly billed to the member or the member's spouse. A parking and transit<unk>  allows employees to pay parking or public transit expenses with pre-tax dollars up to certain limits. Though not as common as the<unk> s listed above, some employers have offered adoption assistance through an<unk> . Also, one cannot have a health care<unk>  if he or she has a High Deductible Health Plan (HDHP) with a Health Savings<unk>  (HSA). In cases where an employee has a HDHP with a HSA, they are eligible for a Limited Expense<unk>  (LEX) (also called Limited Purpose<unk> . These<unk> s may be used to reimburse dental and vision expenses, regardless of any plan deductible; at the employer's discretion, eligible medical expenses incurred after the deductible is met may also be reimbursable.
Flexible spending account
Prescription charges
Admitting privileges
Fee-for-service
Partner services
Bundled payment
Patient group directions
Prospective payment system