Flex Benefit Plan
A flexible spending account (FSA) allows employees to set aside tax-exempt payroll dollars for eligible out-of-pocket healthcare, child care or adult/elder care expenses. By putting aside before-tax dollars, the flexible spending account lowers taxable income and results in savings.
The flexible benefit plan is a voluntary employee benefit plan established by the university under Section 125 of the IRS Code. Flexible spending account claims are administered by UMR,a division of United Healthcare. Get the university's full Flexible Benefit Plan Summary Plan Description or additional information from UMR including links to detailed lists of eligible and ineligible expenses.
Flexible Spending Account Types
Healthcare accounts allow you to be reimbursed with pre-tax dollars for certain out-of-pocket health, dental and vision care expenses when you elect to make deposits in this account. Reimbursements for eligible out-of-pocket expenses for employee, eligible spouse (if filing a joint tax return) and eligible dependents that are not reimbursed by an insurance plan include co-pays, deductibles and coinsurance.
Dependent care accounts allow you to be reimbursed with pre-tax dollars for daycare or after-school care expenses for a child under age 13, an elderly person or a person with disabilities as long as they are claimed as a dependent for federal tax purposes. Expenses must be work related. Both spouses must be employed.
Estimate your healthcare and dependent care expenses carefully; the IRS applies a "use it or lose it" standard to flexible spending account dollars. Money left in your account at the end of the plan year is not returned to you. However, healthcare flexible spending account participants can carry over up to $500 of unused healthcare FSA funds to the next calendar year. Unused healthcare funds in excess of the $500 carryover amount and unused dependent care funds are forfeited at the end of the calendar year.
2016 Contribution Limits
Flexible Spending Account Healthcare:
- Minimum contribution: $120 annually
- Maximum contribution: $2,550 annually
Flexible Spending Account Dependent Care:
- Minimum contribution: $120 annually
- Maximum contribution: $5,000 annually
To participate in the flexible benefit plan, you must be a regular, active, full-time or part-time appointed employee of the university who works twenty or more hours a week. New employees have 31 days from the date of eligibility to complete enrollment. Reductions begin on the first pay period after enrollment is complete. All benefits eligible employees may elect the flexible benefit plan during the annual election period held each November or with a qualifying event.
Healthcare reimbursement expenses include:
- Coinsurance, co-payments and physician charges that exceed medical plan limits or "reasonable and customary" fees
- Annual physicals, routine lab exams and x-rays
- Some over-the-counter medications to alleviate or treat injuries or sickness and are not cosmetic
- Dental work not covered by a plan
- Eye exams, glasses and contact lenses
- Hearing exams and hearing aids
- Guide and service animals
- Specially designed shoes
- Guide for a handicapped individual
- Medical data maintenance and retrieval
- Legal fees required for commitment to an institution or hospitalization
Dependent care reimbursement accounts can be used to pay the costs of dependent care to enable the employee to work—such as day care or after-school care expenses for a child under age 13 or care for a spouse or adult dependent incapable of self-care.
Making changes to contributions for dependent care reimbursement or healthcare reimbursement can only begin, change or end during the calendar year if one of the following qualifying events occur and the requested change is consistent with the event. Required forms must be submitted within 31 days of one of the following events:
Changes to dependent care and health care contributions can be made when there is a change in the:
- Employee's legal marital status through marriage, divorce, death of spouse, legal separation or annulment
- Employee's number of tax dependents through birth, death, adoption or placement for adoption
Changes to dependent care contributions can also be made when:
- Employment status of the employee, spouse or dependent changes due to:
- commencement or termination of employment
- a strike or lockout
- commencement or return from an unpaid leave of absence
- going from full-time to part-time or part-time to full-time
- A dependent satisfies, or ceases to satisfy, dependent-eligibility requirements due to a change in age, student status, marriage or similar circumstances
- A significant increase or decrease in the cost of qualified care during the plan year