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Flexible Spending Accounts

See:   • Types of FSAs     • How to Enroll     • How to Access Money   • FAQs   • Resources     • Need Help?

Also see: Grandfathered HRA (for faculty and staff whose employment began on or before Dec. 31, 2004)

Flexible spending accounts (FSAs) let you pay for many of your out-of-pocket health or day care expenses with tax-free dollars. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money.

Types of FSAs

Health Care FSA

  • This FSA reimburses you for eligible health care expenses such as copays, coinsurance, prescriptions and eyeglasses. See a complete list of eligible expenses.
  • The minimum you can contribute is $104 per year; the maximum you can contribute is $2,550 per year. If both you and your spouse work, you can both claim $2,550 for a total household limit of $5,100.

Dependent Day Care FSA

  • This FSA allows you to set aside money to pay for day care expenses for children under the age of 13 or elder care. The day care must be used as a means to allow you and/or your spouse to be gainfully employed.
  • The minimum you can contribute is $104 per year; the maximum you can contribute is $5,000 per year. If both you and your spouse work, you should coordinate with your spouse for a total household limit of $5,000.
  • You cannot use your FSA debit card for dependent care expenses. You will need to pay out-of-pocket and then submit your receipt/invoice to benefitexpress for reimbursement.

Carry-Overs and Grace Periods

It's important to know that FSA funds do not carry over from year to year. If you participate in an FSA during one plan year, and you want to continue the FSA for the next plan year, you will need to elect an FSA during Open Enrollment (usually held in the fall).

It's also important to know that you need to use your FSA money within the plan year. To soften this rule, the IRS provides a "grace period" of 2 ½ extra months, until March 15 of the following plan year, to incur a claim on your previous year's FSA. You then have until April 15 of the following year to file a claim on your previous year's FSA. At the end of the grace period, though, you will lose any money left over in your FSA. So it's important to plan carefully and not put more money in your FSA than you think you'll spend within a year.

How to Enroll

For New Employees

  • If you want to enroll in an FSA, you must enroll within three months of your hire date.
  • Your FSA start date will be the first day of the month after three months of eligible employment. You can file and be reimbursed for claims for eligible services received on or after your FSA start date.
  • Payroll deductions begin with your first paycheck after you become eligible. For example, if you were hired on July 10, your payroll deductions would start with your November paycheck.
  • Important: the amount you elect will be deducted evenly from each paycheck for that year, beginning with the first paycheck after three months of employment.

For Current Employees

  • To start a new FSA, you need to enroll during Open Enrollment (usually held in the fall). Your FSA will take effect on Jan. 1 of the next year and payroll deductions will begin with your January paycheck.
  • If you have a qualifying life event, such as getting married or having a baby, you can enroll outside of Open Enrollment.
  • If you want to continue contributing to an FSA, you will need to enroll each year during Open Enrollment. It's important to note that your current year's FSA election will not carry over into the next plan year.

How to Access Money in Your FSA

There are two ways to access money in your accounts.

  1. Pay for eligible expenses out-of-pocket and then submit a claim form to be reimbursed from your spending account. You can submit a claim in any of these ways:
  2. For the Health Care FSA only, you can use the benefitexpress MasterCard for eligible health-related expenses. Learn more about the card on the FSA FAQs page.

Direct Deposit

If you pay for eligible expenses out-of-pocket and submit a claim form, you can sign up for direct deposit. Here's how:

FSA direct deposit screenshot
  • Log into My VUMC Benefits and click on "Library" in the top bar.
  • Select "FSA – GENERAL" and download the FSA Direct Deposit Authorization form.
  • Print, complete and mail the form to benefitexpress. Also include a voided check if you are depositing to your checking account.

Once benefitexpress receives your authorization form, your direct deposit should take effect within a week. If you submit a direct deposit form and a reimbursement claim form on the same day, you may receive a check for that claim, but going forward you will be reimbursed via direct deposit.

Direct deposit reimbursement claims are processed daily and there is typically a one-week turnaround. For claims submitted on Wednesdays, there is a possible 10- day turnaround. Once your direct deposit is issued, your money should be in your account within one to two business days, depending on your bank.

Other FSA Details

Highly Compensated Employees with a Dependent Day Care FSA

The Internal Revenue Code (IRC) allows pretax contributions to FSAs as long as the benefit does not favor highly compensated employees (HCEs). You are considered "highly compensated" if your gross earnings are above the annual amount set by the Internal Revenue Service (see the IRS website for details).

In accordance with IRC regulations, VUMC's Office of Benefits Administration examines Dependent Day Care FSA elections each year to ensure that the benefit does not disproportionately benefit HCEs and that the Plan remains compliant. If the benefit is found to "discriminate" against non-highly compensated employees, VUMC will reduce contributions made by HCEs to a level that enables compliance with the IRC. If the Dependent Day Care FSA fails the test for the year, HCEs will be taxed on the pretax deductions contributed to their Dependent Day Care FSA during that calendar year. Non-highly compensated employees are not affected by this rule.

Unpaid Leave

If you are on an unpaid leave and have an FSA, your payroll contributions will stop until you return to work. Once you return to work, your remaining FSA election will be recalculated based on your remaining plan year payrolls.

End of Employment

If your employment with VUMC ends, you may still submit claims to be reimbursed. However the claims must be incurred prior to your end of employment date. You can still submit your claims to benefitexpress by the deadline of the run-out period, which is April 15.

Resources

Need Help? Have Questions?

Benefitexpress
help@mybenefitexpress.com
Customer Service: 1.844.489.3745


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