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    Admin Insider

    PacificSource Administrators

    Demystifying Plan Administration Terms

    If you have a new person or intern on your team (or would like a refresher yourself), we’ve put together a list of our most common terms and acronyms. Some of the following terms are industry standards, and some are specific to PacificSource Administrators. 

    Options

    Cafeteria Plan 

    Similar to a cafeteria lunch, where you choose your meal components, an employer can choose which benefit components to offer employees. A cafeteria plan provides an avenue for employees to elect and purchase the employer-offered qualified benefits on a pretax basis (health insurance, health FSA, DCAP) instead of cash (unreduced salary).

    PacificSource Administrators can assist with administering two types of cafeteria plans:

    • A premium-only plan (POP) that allows employees to pay their employees group sponsored insurance premiums on a pretax basis.
    • A flexible spending account (FSA) plan that includes the premium payment component (similar to the POP), as well as a Health FSA, DCAP, and/or SPA Component.

    Family

    Dependent Care Assistance Program (DCAP) 

    The dependent care assistance program is a component that may be offered under the FSA. It allows employees to set aside pretax contributions to pay for dependent care services, such as preschool, before/after school care, or elder daycare. Care must be for an eligible dependent (under age 13 or an elder) and must be incurred while all adults are working. A DCAP might also be referred to as:

    • Dependent care FSA
    • Dependent care expense plan (DCE) 

    EOB

    Explanation of Benefits (EOB)

    An EOB is a statement from a carrier explaining what portion of a claim was paid.

    Savings

    Flexible Spending Account (FSA)

    A flexible spending account (also known as a flexible spending arrangement) is a type of cafeteria plan that may include multiple benefit components: premium payment, health FSA, DCAP, and SPA components. Employees can elect to put money into special component accounts to pay for certain out-of-pocket expenses on a pretax basis.

    See our Flexible Spending Account Structure Chart (PDF) and other definitions in this article.

    Savings

    Health FSA

    The health flexible spending account is a component that may be offered under the FSA allowing participants to be reimbursed for medical expenses. There are multiple options an employer can offer under the health FSA component:

    • General-purpose health FSA or health-related expense account (HRE) option, which covers all Code 213(d) medical care expenses
    • Limited purpose health FSA (LFSA) option which covers Code 223(c) dental, vision, and preventive expenses
    • Limited scope health FSA (LSFSA) option, which covers dental and vision expenses, but excludes preventive care

    A health FSA may also be referred to as a medical FSA or Manley Plan.

    Reimbursement

    Health Reimbursement Arrangement (HRA)

    The HRA is an employer-funded benefit used to reimburse employees for out of pocket medical expenses.

    Post-deductible HRA: A post-deductible HRA will not reimburse expenses before the statutory minimum annual deductible is met for the high-deductible health plan (HDHP). (Paired with HDHPs and HSAs.)

    PacificSource Administrators may also refer to HRAs by the following names:

    • Individual (Indiv) — Funding is given per eligible person; it varies in reimbursement types.
    • Medical (Med) — Funding is given as a bucket of funds to be shared by all eligible persons; it varies in reimbursement types.
    • Comprehensive (Comp) — This is the most generous of HRAs, allowing all IRS code 213 expenses, including long-term care and COBRA premiums; it’s shared among all eligible persons.
    • Supplemental (Supp) — It supplements dental, vision, and/or prescription expenses.

    Savings

    Health Savings Account (HSA)

    An HSA is a savings account paired with a high deductible health plan for qualified healthcare expenses. Contributions can be pre or post tax, and the HSA balance rolls from year to year, even if you change health plans, retire, or leave your employer.

    Plan

    High-Deductible Health Plan (HDHP)

    A high-deductible health plan (HDHP) can be combined with a health savings account (HSA), and allows employees to pay for certain medical expenses with pretax dollars.

    OOP

    Out of Pocket (OOP)

    Out of pocket is the portion of a medical expense the employee is responsible for. Some or all of the OOP may be eligible for reimbursement, depending on the plans (FSA and so on) offered by their employer.

    Car

    Parking Benefit (PRK)

    PRK is a pretax benefit for work-related parking expenses, such as parking on or near the workplace, a commuting location for mass transit, or carpools.

    Premium

    Premium Payments (POP)

    Premium payment benefits can either be a stand alone cafeteria plan, known as a POP, or may be offered as a component under an FSA, known as a premium payment component. It allows pretax deduction of employer-sponsored medical, dental, and vision, and is the building block of the cafeteria plan. A premium plan might also be referred to as a salary reduction plan or premium payment plan.

    Transit

    Transit and Commuting Benefits (TRN)

    Transit and commuting expenses include any pass, token, fare card, voucher, or similar item entitling a person to mass-transit facilities provided by any person in the business of transporting persons. The vehicle must have a seating capacity of at least six adults (not including the driver). At least 80% of the mileage is expected to be for purposes of transporting employees to and from work.

    Car

    Transportation Fringe Benefit (TFB)

    Governed by IRS section 132, this plan allows an employer to offer parking (PRK) and/or transit/commuting (TRN) benefits on a pretax basis to employees.

    Under the TFB, you will find the following components:

    • Parking Benefit (PRK)
    • Transit and Commuting Benefits (TRN)


    Questions?

    You're always welcome to contact us!

    PacificSource Administrators
    110 International Way
    Springfield, OR 97477

    Sales and Service: PSAsales@pacificsource.com 
    Flex Benefits: PSAcustomerservice@pacificsource.com
    COBRA Benefits: COBRA@pacificsource.com

    (541) 485-7488 or toll-free (800) 422-7038  
    Fax (541) 485-8759 or toll-free (800) 575-1109 

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