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Flexible Spending Account (FSA)

Flexible Spending Accounts (FSA) provide a simple way to save money on eligible health care and dependent care expenses. You choose how much to set aside to be used for health care and dependent care expenses. Using an FSA can help you budget for these expenses.  And, the money you contribute to your FSA is pretax, which means you save money!

You do not have to enroll in a UC medical plan to participate in an FSA through UC.  However,  you should be aware of the IRS rules for FSA plans, including:

  • You may not use funds from one FSA account to pay for expenses that apply to the other FSA account; and
  • Any unused funds remaining in your account after the close of the reimbursement period for that plan year must be forfeited.

Chard Snyder administers UC’s FSA plans. Check out the Chard Snyder mobile app.  Visit Chard Snyder’s website for more details.

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FSA Details

UC offers two types of FSAs: Health Care and Dependent Care.  An employee may elect an FSA if he/she is benefits-eligible. Eligibility is determined by type of appointment and FTE (full time equivalency).

  • Staff or visiting faculty: FTE of 75% or greater*
  • Faculty member (AAUP-represented or COM Med Faculty): FTE of 65% or greater

An employee can change his/her FSA plan or election amount during UC’s Annual Enrollment in November or if he/she has a Qualified Status change.  Enroll through ESS (Employee Self Service).

* Post Docs are not eligible for Flexible Spending Accounts.

FSA OPTIONS

UC offers two types of FSAs: health care and dependent care.  A benefits-eligible employee* can elect one, both or neither.  The default FSA enrollment is no Health Care FSA and no Dependent Care FSA. The funds for the FSA come from an employee’s UC pay.

  1. Health Care FSA: A Health Care FSA sets aside money to pay for eligible out-of-pocket health care expenses for an employee and his/her qualified dependents. Examples of eligible expenses may include health plan deductibles, copayments, and coinsurance; eye exams, contact lenses, and glasses; prescription drugs; dental care including orthodontia; and over-the-counter (OTC) products with a physician’s prescription.  An employee can contribute $120 - $2400 per calendar year to a Health Care FSA.

*A Healthcare FSA is available if an employee elects the PPO medical plan or is benefits-eligible, but waives UC medical coverage.  It is not available if an employee elects the High Deductible Health Plan.

2. Dependent Care FSA: A Dependent Care FSA sets money aside to pay for eligible dependent care expenses, such as day care. Examples of eligible expenses may include day care facility fees (excluding lunches, transportation, and educational services); before-school and after-school care; local day camp; in-home babysitting fees (income must be claimed by your care provider); and nursery school and preschool (preschool expenses are eligible if the amount paid for schooling cannot be separated from the cost of care).  An employee can contribute $250-$5,000, per family, per calendar year, to a Dependent Care FSA. Services must be provided while the employee and his/her spouse is at work, looking for work, or attending classes as a full-time student.  Expenses incurred before the beginning of the plan year are not eligible.  Dependents must be under the age of 14.  Note: Dependent Care accounts are not used to reimburse a dependent’s healthcare expenses.

NOTE: FSA enrollment does NOT carry over from year to year!  Employees MUST re-enroll online through ESS each year to contribute to either FSA.

Getting Reimbursed

All FSA reimbursements are made via direct deposit and are directed by Chard Snyder to the primary direct deposit account an employee established for his/her UC pay.  If an employee has not elected direct deposit for his/her UC pay, the employee must complete Chard Snyder’s Direct Deposit Authorization form (found on the Chard Snyder website).

  • To request reimbursement, submit claims through the Chard-Snyder website.
  • Receipts or some other proof that an eligible expense was incurred and paid must be submitted.
  • The taxpayer identification number (TIN) of any day care center or any person who provides dependent care must be provided if requesting reimbursement for those services.

 Health Care Account

  • If an employee enrolls in a Health Care FSA he/she will automatically be sent (to the home address of record in the UC system) a BENNY debit card from Chard Snyder.  The BENNY card can be used just like a debit card for payment of eligible expenses.  The funds are automatically deducted from an employee’s FSA account balance.  It is not necessary to submit a receipt for the expense unless an employee receives an email from Chard Snyder requesting it.  Don’t ignore the email!
  • Alternatively, an employee may submit claims through the Chard Snyder website.
  • Receipts or some other proof that an eligible expense incurred and was paid must be submitted either with the claim form or upon request.

Don’t lose FSA funds! Note the important information below (for FSA Plan Year 2019, subject to eligibility to participate in the FSA Program).

Event

Date(s)

Description

Plan Year

Jan. 1 – Dec. 31, 2019

Pre-tax payroll contributions made during the plan year, which is a 12-month period.

Incurred Date Window
(including grace period)

Jan. 1, 2019 – Feb. 29, 2020

Use the funds in your FSA(s) for incurred eligible expenses during the plan year and the grace period.

Reimbursement Period

Jan. 1, 2019 – Mar. 15, 2020

Request reimbursement for eligible expenses during the reimbursement period, which is a 15-month period.

Reimbursement Filing Deadline

Mar. 15, 2020

All requests for reimbursement must be received by Chard Snyder no later than March 31, 2020 or you will forfeit the unclaimed balance in your 2019 FSA(s).

NOTE: Eligible claims for 2019 incurred within the grace period and submitted by March 15, 2020 will reduce the unused account balance carry-over from 2019.  If an employee submits eligible 2020 claims before submitting any remaining 2019 claims, and the 2020 claims will reduce the balance carry-over to zero, the 2019 claims will not be reimbursed.

Eligible Expenses

UC’s Flexible Spending Account, Chard Snyder, is required to follow IRS Code Section 213(d) to determine medical expenses that are eligible for reimbursement under the Health Care Flexible Spending Account.

Find a list of eligible expenses on Chard Snyder’s website.

IRS Rules

Because FSAs offer such a significant tax break, the Internal Revenue Service (IRS) applies these strict rules to their use:

  • If an employee terminates employment or becomes ineligible for UC Benefits, he/she may be reimbursed only for expenses he/she incurred before termination or ineligibility date.  An employee may, however, continue participating in the Health Care Account (on an after-tax basis) through COBRA.
  • An employee cannot transfer money from one account to another.
  • An employee cannot change the amount of his/her contributions during the year unless he/she has a Qualified Status Change. Then if the employee increases his/her contribution amount, the increase is available only for expenses incurred after the date of the qualified status change.
  • Because the plan is subject to IRS rules, an employee may be subject to certain eligibility requirements.

Additional tax information

Under current federal tax law, domestic partners (other than those who qualify as tax dependents of employees) may not participate in the university's dependent care and health care flexible spending account programs.  In other words, medical and dependent care expenses incurred by or on behalf of a domestic partner who is not a tax dependent are not eligible for reimbursement under the spending account programs.

An employee cannot claim a federal tax credit for dependent care and request reimbursement from the Dependent Daycare Account for the same expenses.  Consult a tax advisor for advice.

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