PrepaidHealthcare MasterCard^® is an employer prepaid Health Reimbursement Account (HRA). HRAs are IRS-sanctioned arrangements that allow an employer to reimburse employee medical expenses. Reimbursements of qualified expenses are tax-deductible for the employer and are tax free (not included in W2 earnings) for the employee.

It's neither. PrepaidHealthcare MasterCard^® is a tax benefited health benefit that you, as an employer, can provide your employees.

The PrepaidHealthcare MasterCard^® can be used to supplement other health insurance plans and help cover expenses such as co-pays or annual minimum out-of-pocket expenses. If you have a high deductible plan, frequently referred to as a catastrophic plan, an HRA is a common accompanying incentive to help cover these everyday out-of-pocket expenses your employees face.

PrepaidHealthcare MasterCard^® complies with Section 105 of the IRS Tax Code, Health Reimbursement Arrangements (HRAs). HRAs allow employers to provide tax-free reimbursements to their employees (and tax dependents) for eligible health care expenses.

PrepaidHealthcare MasterCard^® cards are restricted to health care services such as medical, dental, or vision care, and everyday over-the-counter health care products at all health care providers and retailers who accept Debit MasterCard^®.

The PrepaidHealthcare MasterCard^® (Expanded Plan) can be used for:

Over-the-Counter Medications
Prescription Medications
Retail Health Clinics
Dental Offices Qualified Insurance Premiums (if purchased at time of order or at time of card activation)
Physicians
Chiropractors
Optometrists
Opticians
Podiatrists
Hospital
Medical and Dental Labs
Hearing Aids
Counseling
Medical Equipment

Employees, spouses and their dependents. Please note that self-employed, owners of 2% or greater of a sub-chapter S corporation, and partners in partnership are NOT eligible to receive a card under IRS regulations.

At year-end, unused money rolls over to the next year and the employee has 90 days to use those funds before they are returned to you, their employer.

You can load the dollar amount of your choosing onto the card (this is different for SF vs. "other locations", see below). For the Basic Plan: a one-time set up fee of $79.95; A one-time issuance fee of $4.95 per card, and a monthly fee of $2.95 per card will be deducted from the amount that you decide to allocate to each employee. No hidden fees. The only other fee is a Card Replacement Fee of $12.95 if a card is lost or stolen.

Call 1-888-2MY-HLTH (1-888-269-4584) as soon as possible to cancel the card. A Card Replacement Fee of $12.95 will be charged to replace the card.

All you need is the names of your employees, employee address or phone number and a company checking account. Everything necessary can be entered online. Personalized cards are delivered within 21 days of the initial order.

Your employees may visit the www.PrepaidHealthcare.com website or contact the PrepaidHealthcare MasterCard^® Interactive Voice Response and Customer Support line 1-888-2MY-HLTH (1-888-269-4584) at anytime to answer most questions. For those requiring further assistance, support representatives are available between the hours of 9am-5pm PST.

You or your accountant may download the necessary reports at anytime that show the amounts loaded onto each card throughout the year. Your accountant will advise how to deduct this expense.

The amounts received by each employee are not W-2 wages and are thus exempt from all payroll and income taxes. Your accountant will advise how to record this amount as non-taxable.

It is recommended that you save receipts from purchases made with your PrepaidHealthcare MasterCard^® to provide proof of compliance with HRA tax guidelines. Receipts must also be included with claims submitted for reimbursement.

A business is covered by the HCSO if it engages in business within the City and is required to obtain a valid San Francisco business registration certificate, and employs 20 or more employees per week.

Funds loaded on PrepaidHealthcare MasterCard^® can be used to satisfy the San Francisco Health Care Security Ordinance (HCSO), are tax-deductible for you and tax-free to your employees. HCSO fund minimum requirements are built right into the process. And this HRA meets all IRS, ERISA, HIPAA and COBRA regulations and guidelines.

PrepaidHealthcare MasterCard^® includes calculation tools to help employers who are subject to the HCSO determine the correct contribution for each employee based on hours worked each month. By providing employers with transaction records, PrepaidHealthcare MasterCard^® also helps employers meet their requirement to maintain records of health care expenditures, including calculations of health care expenditures required under the law for each covered employee and proof documenting that such expenditures were made each quarter of each year.

Yes, non-profits with fewer than 50 employees and small businesses with fewer than 20 employees are exempt from the San Francisco Health Care Security Ordinance.

Regardless of where the employer is located, all persons performing work for the employer in San Francisco count toward determining participation in the HCSO, regardless of where their workers live.

Any person who has been employed for at least 90 calendar days, and performs at least 8 hours of work per week within San Francisco, including those who work on a part-time or temporary basis.

Employees who sign a Voluntary Waiver Form verifying that they are receiving health care from another employer, either as an employee or through their spouse or domestic partner's policy, and that s/he voluntarily waives the right to have her current employer make a Heath Care Expenditure (HCE) for her benefit. Managers, supervisors, or confidential employees earning more than $80,397 annually in 2009; Employees who are covered by Medicare or TRICARE/CHAMPUS; Employees who are employed by a non-profit corporation for up to one year as trainees in a bona fide training program consistent with Federal law; Employees who receive health care benefits pursuant to Section 12Q.2.9 of the San Francisco Administrative Code (Health Care Accountability Ordinance).

An amount: paid by a covered employer to its covered employees, or to a third party on behalf of its covered employees for the purpose of providing health care services for covered employees, or reimbursing the cost of such services for its covered employees. Health care services means medical, dental, or vision care, services, or goods that may qualify as tax deductible medical care expenses under Section 213 of the Internal Revenue Code, or medical care, services, or goods having substantially the same purpose or effect as such deductible expenses.

The HCE for each covered employee is calculated by multiplying the total number of "hours paid" to that employee by the applicable HCE rate. "Hours paid" includes both the hours for which a person is paid wages for work performed within San Francisco and the hours for which a person is entitled to be paid wages, such as paid vacation hours, paid time off, and paid sick leave hours. Only hours worked in SF are used in the calculation. Ceiling/Cap of 172 hours paid per month.

Large Employers (100+ employees) = $1.85/hour (2009)
Medium Employers (20-49* employees & 50-99 employees) = $1.23/hour (2009)
Small Employers (1-19 employees) = exempt
*Non-profits with less than 50 employees are exempt.

Calculations must be made and expended at least quarterly, within 30 days after the end of the preceding quarter.

Payments to or on behalf of one covered employee that exceed the required health expenditure for that employee will not be considered in determining whether an employer has met its total required health care expenditures for all employees. Subject to two exceptions: Uniform health coverage plans and Self-insured/Self-funded plans.

Covered Employer will be deemed to comply with the Employer Spending Requirement (ESR) if the actual average hourly expenditure rate per employee meets or exceeds the expenditure rate required under the Ordinance. See Regulation 6.2(B). Two easier options to determine whether the rate meets the ESR - Calculate the actual average hourly expenditure rate by dividing the total amount of health care expenditures made for employees by total number of hours paid to such employees. Calculate the average hourly expenditure rate by dividing the monthly premium or the "COBRA equivalent" rate, minus any employee contributions. 172 hours Aggregated/average expenditure only applies to those employees covered by the same plan. Remember to deduct any employee contributions.

Payments of premiums for health insurance coverage for the covered employee;

Payments to the City for enrollment of the covered employee in the HAP/Healthy San Francisco (HSF);

Contributions on behalf of the covered employee to a health spending account, such as a health reimbursement arrangement, a flexible spending account, or a health savings account; and

Cash reimbursements to the covered employee for expenses incurred in the purchase of health care services, such as doctor's and pharmacy bills.

NOTE: Payments made directly or indirectly for workers' compensation or Medicare benefits do not qualify as health care expenditures.

Payment of the prevailing wage fringe benefit requirement in cash (as part of the covered employee's paycheck or otherwise) shall not satisfy the Employer Spending Requirement (ESR) of this Ordinance.

Only the portion of the Health and Welfare contributions going toward health care coverage may be counted towards the minimum expenditure required under the HCSO. The portion of Health and Welfare contributions that goes towards health care coverage must be separated from payments for unrelated benefits, such as life insurance, disability payments, etc.

Employers must make the FULL expenditure required by law. Employee contributions do NOT count, e.g. employee contributions to FSA. If the monthly premium paid by the employer does not meet the required expenditure amount, it must choose how it will expend the remaining amount, for example, by complementing the plan with a reimbursement account funded by the remainder.

Yes, the following:

Notice to Employee/City Option Deposit Confirmation – new form Recordkeeping: Employers must retain records for a period of four years, and shall allow OLSE access to such records, which must include: Covered employees' address, telephone number, and date of first day of work;

Itemized pay statements consistent with the requirements of Labor Code Sec. 226;

Records of health care expenditures made, including calculations of healthcare expenditures required under the law for each covered employee and proof documenting that such expenditures were made each quarter of each year; and, if applicable,

Signed Voluntary Waiver Forms for every employee for whom a covered employer is claiming an exemption from the HCE requirement Annual Reporting Requirement Cooperation with OLSE Investigations & Audits, including providing access to workers and other witnesses, as well as employer records including, but not limited to, employee time sheets, payroll records, employee paychecks, and other documents described in Regulation 7.1.

The OLSE has the authority to conduct investigations, monitoring and audits; to order corrective action for violations of the HCSO; and to seek penalties if those violations are not corrected. Any person may file a complaint, and the OLSE may initiate an investigation on its own authority.

Health Care Security Ordinance: HCSO@sfgov.org (415) 554-7892