Flexible Spending Accounts (FSAs)

FSAs are voluntary accounts that help you pay for expenses not covered by the other benefit programs. You can participate in one or both of the following accounts:

* Health care expenses
* Dependent (day) care expenses

Effective with the plan year ending December 31, 2007, the University is amending the Flexible Spending Accounts Plan to include a 2½ month grace period extending through March 15 of the following year. This means that a participant may submit expenses incurred in the two and one-half month grace period for reimbursement from either the prior year (if funds still remain) or the current year. Expenses incurred during the grace period will be first paid by any balance remaining from the prior year's election; then, if applicable, expenses will be reimbursed under the current plan year's elected amount (example). Any remaining balance from the prior plan year will be forfeited at the end of the grace period.

Re-enrollment is held once a year in late November. All other flexible benefits are effective July 1. The date services are provided determines eligibility of an expense for reimbursement from your FSA, not when you are formally billed or charged or when you pay for the services.

When you set up an account, you use before tax payroll contributions to pay for your eligible expenses on a tax-free basis.

Under FSA regulations, you may cover more dependents than under the other medical and dental plans. For the health care account, an eligible dependent can also include a dependent parent, as long as you provide more than one half of the individual's support.

For the dependent (day) care account, an eligible dependent includes your children (but only under age 13), your spouse (but only if he or she is disabled), and your parents or in-laws who depend on you and your spouse for more than one half of their support and who spend at least eight hours a day in your home.

Note: FSA reimbursements are not automatic. You must complete and submit claim forms  to receive reimbursement.  Claims may be submitted through April 30 for expenses incurred between January 1 (or the actual period you were enrolled, if enrolled after January 1) and the end of the grace period.

When you're deciding how much to contribute to an FSA, you should estimate your expenses carefully. Once you contribute money to your FSA, you:

• cannot transfer money from one account to another.
• cannot withdraw money except to be reimbursed for a covered expense.
• must use the money in the account only for expenses incurred during the period enrolled, upto and including the 2½ month grace period.  If you do not spend all the money, you will forfeit any unused balance.
• cannot change the amount you contribute during the year unless you have a change in family status and apply within 30 days of the event.

• Health care FSA claims are processed each week by the Office of Human Resources.  Regardless of whether there is enough money in your account to cover the entire claim, you will receive reimbursement for the entire health care claim up to the maximum of your annual FSA contribution. The moneys you receive are non-taxable to you.

• Dependent (day) care FSA claims are also processed each week. If enough money is in your dependent (day) care account to cover the entire claim, you'll receive reimbursement for the full amount. If not, you'll receive a partial amount up to the account balance. Reimbursements will continue  until the claim balance is fully paid. The moneys you receive are non-taxable to you.

• Contribution limits are as follows:
  

  FSA	Minimum	Maximum
  Health Care	$5/pay ($120)	$125.00/pay ($3,000)
  Dependent (Day) Care	$5/pay ($120)	$208.33/pay ($5,000)

• FSA reimbursements are processed on a weekly basis. When your claim is fully processed you will receive an email and written notification of the direct deposit or check. With the exception of peak periods, such as the end of the plan year, FSA claims are typically processed within 2 - 3 weeks of receipt.
  * You have 3 1/2 months (until April 15) after the close of the plan year to submit all claims for reimbursement.

• Expenses not paid by your medical or dental plan, such as:
  
  • Deductibles
  • Co-payments
  • Amounts in excess of reasonable and customary charges
  • Amounts in excess of scheduled or annual maximums
  • Services and supplies not covered, such as doctors' office visits if you choose the Basic Plan

• Hearing expenses, including examinations and hearing aids

• Other health care expenses qualifying as deductions for federal income tax purposes, some of which are:
  
  • Professional services and fees
    * Doctors', dentists' and other hospital services
    * Practical or other nonprofessional nursing for medical servicesonly (but not for the care of a healthy person or a small child who is not ill). This includes medical care of an elderly person who is unable to get about or a person subject to fainting spells
    * Opticians' services
    

  • Equipment and supplies
    * Air conditioner, where necessary for relief from an allergy or for relieving difficulty in breathing
    * Back supports
    * Contact lenses, eyeglasses

  • Medical treatments
    * Acupuncture
    * Sterilization and/or vasectomy
    

  • Medicine
    * Insulin, medicines and drugs that require a prescription as well as over-the-counter medicines such as antacids, allergy medicines, pain relievers, and cold medicines. Note: for purposes of itemized medical expenses on your income tax return, the cost of over-the-counter drugs continues to be non-deductible.
    

  • Miscellaneous
    * Birth control pills or other birth control prescribed by your doctor
    * Convalescent home--for medical treatment only
    

• Antiseptic diaper service
• Athletic club expenses to keep physically fit
• Baby sitting fees to enable you to make doctor visits
• Cosmetic surgery; unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease.
• Cost of trips for a "change of environment" to boost morale of ailing person--even if a doctor prescribed the trip
• Domestic help--even if recommended by doctor because of spouse's illness (but the part of the cost attributed to nursing duties performed by the domestic is deductible)
• Illegal operations and drugs
• Long-term Care Insurance
• Marriage counseling fees
• Maternity clothes
• Patent medicines
• Scientology fees
• Special food or beverage substitutes
• Toiletries (including toothpaste), cosmetics and sundry items
• Vitamins, tonics, dietary supplements and herbal remedies.
• Weight reduction programs undertaken for general health, not for specific ailments
• Your divorced spouse's medical bills; you may be able to deduct these as alimony

• Reimbursements for premiums paid for other health plan coverage by a spouse or for a dependent

• Licensed nursery schools, day care centers and kindergartens (only if the cost of schooling cannot be separated from the cost of the child's care)
• Day camps
• Dependent care centers that provide day care (not residential care) for dependent adults
• Individuals (other than a dependent child under age 19) who provide care for your dependents inside or outside of your home
• Expenses for household services related to the care of a dependent
• Social Security taxes or other taxes that you pay on behalf of the person providing the day care

• If you or your spouse earns less than $5,000 a year, your contributions to the day care account are limited to the income of the lower paid spouse
• If your spouse has a similar type of spending account with his or her employer, the combined maximum contribution cannot exceed $5,000 in a calendar year. If you and your spouse file your taxes separately, however, the maximum that each of you can contribute is $2,500 a year
• If your spouse is not employed, a full time student or disabled, you cannot make any contributions