FLEXIBLE SPENDING ACCOUNTS

Health Care FSA

Many kinds of expenses may be reimbursed through a Health Care FSA, but they all must be:

• Medically necessary,
• Deductible for federal income tax purposes,
• Incurred by you or an eligible dependent while you are participating in the FSA program and during the plan year in which your FSA contributions are made, and
• Not reimbursable by any other benefit plan or health care plan (such as your own medical, dental or vision care plan or your spouse’s health care plan or flexible spending account).

Eligible Expenses
Examples of eligible health care expenses include the following. Please see the WageWorks website for a more detailed list of expenses.

• Deductibles, copays and coinsurance
• Acupuncture (if prescribed by a physician for the treatment of a specific medical condition; maintenance or wellness treatments are not covered)
• Alcohol/drug rehabilitation—payment to a treatment center (inpatient only)
• Ambulance fees
• Annual physicals
• Braille books and magazines
• Car controls for handicapped drivers
• Childbirth classes—Lamaze and others
• Chiropractors’ services for medical care
• Christian Science practitioner services
• Contraceptives
• Dental fees above plan limits
• Doctors’ fees above plan limits
• Eye exams, eyeglasses, contact lenses and contact lens cleaning solutions (when not covered by the vision care plan)
• Guide dogs
• Hearing aids—including batteries
• Home modifications for medical reasons (e.g., installing a wheelchair ramp for an eligible dependent)
• Laboratory fees
• Lead paint removal—to prevent a child at home from eating lead paint
• Learning-disability tutoring by a licensed school or therapist for a child with a severe learning disability
• Medical appliances (e.g., crutches, wheelchairs, braces)
• Medicine and drugs—prescription only (nonprescription drugs are eligible if they are related to medical care and not merely beneficial to health)
• Nurse—private duty
• Nursing home—for treatment of illness or injury
• Nursing services supplied at home
• Orthodontic treatments (see WageWorks orthodontic schedule for how payments can be submitted/reimbursed)
• Oxygen
• Physical therapy
• Prescribed medicines
• Routine physical exams
• Smoking cessation programs and prescribed smoking cessation drugs
• Special education devices for visual disability
• Special equipment needed for hearing disabilities (includes visual display equipment of audio broadcast or television programs)
• Surgery (when not covered by a Valassis-sponsored medical plan), such as radial keratotomy or laser eye surgery
• Syringes, needles and injections
• Transplants
• Transportation—automobile mileage, parking fees and tolls incurred when traveling for health care services
• Vaccinations and immunizations (when not covered by a medical or dental plan)
• Weight loss programs to treat a specific ailment (such as hypertension) or to treat obesity, for those individuals who have been diagnosed as obese by a physician.

Debit Card
You can pay your out-of-pocket pharmacy and medical expenses quickly, easily and automatically from your healthcare flexible spending account (FSA) with your debit card. When you visit a participating pharmacies, you can pick up your prescription and pay nothing out-of-pocket at the point of purchase, just provide your debit card for payment. Then, your copay is drawn directly from your FSA account balance, and processed instantly through the real-time interface available 24 hours a day, 7 days a week. You may also use your debit card for copayments and other qualified expenses. Please see the WageWorks website for important information on using a debit card.

Important Note: Only dental and vision expenses are qualified under the limited purpose health care FSA.

Ineligible Expenses
The IRS determines what expenses are eligible for reimbursement from an FSA. Health care expenses are not eligible for reimbursement from an FSA if they do not qualify as a deduction for federal tax purposes or if they are fully covered under a health insurance plan.

Some examples of expenses that are not eligible for reimbursement include:

• Premiums you or your spouse pay for medical, dental, vision or COBRA coverage
• Cosmetic expenses, including plastic surgery, hair transplants and treatments for baldness (such as Rogaine), Retin-A treatments (unless prescribed by a physician for the treatment of acne) and cosmetic dentistry (such as tooth bleaching)
• Vitamins and nonprescription drugs (nonprescription drugs are eligible if they are related to medical care and not merely beneficial to health)
• Maternity clothes or diaper services
• Health club memberships (These expenses may qualify if prescribed by a physician for the treatment of obesity.)
• Expenses paid by any other health care plan
• Expenses that you claim as a deduction on your income tax return
• Reduced-calorie diet foods

The Internal Revenue Service publishes a booklet that provides guidelines for claiming health care expenses on your taxes. To receive a free copy, contact the IRS directly at 800-829-3676 and request Publication 502, Medical and Dental Expenses. You can also review or download this information from the IRS Web site at www.irs.gov. You can also visit the WageWorks website for additional information on ineligible expenses.

Verification of Expenses

If you use your debit card and receive a Card Use Verification (CUV) form along with your account statement, you will need to take action within 90 days of the transaction or risk the possibility of having your card suspended.

You should review your account statements regularly for unverified transactions. You can do this by logging on to Wageworks' website:

1. Go to www.wageworks.com
2. Enter your User Name and Password (or click on the "First Time User?" link and follow the simple process to register to use this site)
3. Click on the Health Care tab
4. Select the View Claims & Payments link
5. Select Card at the top of the page
6. Review the Card transactions with an amount under Receipt of Repayment Needed

If you don't resolve an unverified transaction after 90 days, the amount will be deducted from your next approved reimbursement check(s) and/or your card privileges will be suspended.

If you have a transaction that needs to be verified:

1. Print out the pre-filled Card Use Verification Form (included in your monthly statement)
2. Review the form for information about how and where to submit your receipts and/or payments.
3. Complete, sign and fax the form, along with the detailed receipt, to the fax number indicated on the form.

Important Note: If you reach 75% of your elected balance, your card will be suspended until receipts are received by Wageworks.

Federal Tax Deduction for Health Care Expenses
Under current IRS regulations, you may deduct uninsured health care expenses that exceed 7.5% of your adjusted gross income from your federal income taxes if you itemize deductions. If your out-of-pocket health care costs are less than 7.5% of your adjusted gross income, you cannot deduct those expenses. Because the 7.5% limit does not apply to FSAs, you may save taxes on those same expenses by participating in a Health Care FSA. If you expect your health care expenses to exceed 7.5% of your adjusted gross income, you will need to choose between a tax deduction and participating in a Health Care FSA. You may either take a tax deduction or submit the expenses for reimbursement from your Health Care FSA. You cannot take advantage of both.

You may wish to consult a tax advisor to help you decide which approach is best for your personal situation.

	Highlights Eligibility & Enrollment How the Plan Works Health Care FSA Dependent Care FSA Filing a Claim Other Information Numbers, Addresses & Links Estimate Your Tax Savings Use the WageWorks Savings Calculators to determine how much you should contribute and what your contributions mean in tax savings.

Summary Plan Description
The legal summary of this benefit will be included in the 2008 Benefits Handbook.