Hawaii Administrative Rules
Title 14 - DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT
Subtitle 5 - STATE OF HAWAII CAFETERIA PLAN
Chapter 52 - FLEXIBLE SPENDING ACCOUNTS PLAN
Subchapter 5 - PAYMENT OF BENEFITS
Section 14-52-51.1 - Debit card terms; correction methods
Universal Citation: HI Admin Rules 14-52-51.1
Current through August, 2024
(a) A participant may use debit cards provided by the third-party administrator and the plan for payment of medical expenses, subject to the following terms;
(1) Card only for medical expenses. Each
participant issued a card shall certify that the card shall only be used for
medical expenses. The participant shall also certify that any medical expense
paid with the card has not already been reimbursed by any other plan covering
health benefits and that the participant will not seek reimbursement from any
other plan covering health benefits.
(2) Card issuance. The card shall be issued
upon the participant's effective date of participation and reloaded in the
amount designated by the participant for each plan year the participant remains
a participant in the medical expense reimbursement spending account. The card
shall be automatically cancelled upon the participant's death or termination of
employment or if the participant has a change in status that results in the
participant's withdrawal from the medical expense reimbursement spending
account,
(3) Maximum dollar amount
available. The dollar amount of coverage available on the card shall be the
amount elected by the participant for the plan year. The maximum dollar amount
of coverage available shall be the maximum amount for the plan year as set
forth in section
14-52-22.
(4) Only available for use with certain
service providers. The cards shall only be accepted by merchants and service
providers that have been approved by the plan administrator.
(5) Card use. The cards shall only be used
for medical expenses from approved merchants and service providers, including,
but not limited to, the following: co-payments for doctor and other medical
care; purchase of medicines and drugs either prescribed by an individual so
authorized by State law or available over-the-counter; purchase of medical
items such as eyeglasses, syringes, crutches, etc.
(6) Substantiation. All purchases by the
cards shall be subject to substantiation by the plan administrator, usually by
submission of a receipt from a service provider describing the service, the
date, and the amount. The third-party administrator shall also follow the
requirements set forth in Revenue Ruling 2003-43 and Notice 2006-69, All
charges shall be conditional pending confirmation and substantiation.
(b) If a debit card purchase is later determined by the plan administrator to not qualify as a medical expense, the plan administrator, in its discretion, shall use one of the following correction methods to make the plan whole. Until the amount is repaid, the plan administrator shall take the following actions to ensure that further violations of the terms of the card do not occur, up to and including denial of access to the card:
(1) Repayment of the
improper amount by the participant;
(2) Claims substitution or offset of future
claims until the amount is repaid;
(3) Withholding the improper payment from the
participant's wages or other compensation to the extent consistent with
applicable federal or state law; and
(4) If paragraphs (1) through (3) fail to
recover the amount, consistent with the employer's business practices, the
employer may treat the amount as any other business indebtedness.
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