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Flexible Spending AccountsA flexible spending account allows you to put aside pre-tax dollars to pay for medical, dental and vision expenses, dependent care expenses or employee work-related commuting expenses. The flexible spending accounts are administered by Employee Benefit Data Services (EBDS).
Employee Benefit Data
Services Reimbursement for all flexible spending accounts (health care, dependent day care, qualified commuter expense) can be done through MedSave®. MedSave® is a simple, fast online claims entry system that is administered by eBDS. Reimbursements are processed on a daily basis and can be expedited if you sign up for direct deposit. To review the MedSave® Reimbursement process, please click here. Three types of Flexible Spending Accounts: Health Care Flexible Spending Account Description You can save tax dollars on eligible expenses that are not covered by your medical, prescription, vision and dental plans (deductibles, coinsurance, etc.). Even the most comprehensive benefit plans don’t cover every health care expense. Expenses like dental and optical care, office visit and prescription copayments and insurance deductibles are just some of the bills you may have to pay out of your pocket. Costs can add up-particularly if, like most people, you pay for these services with after-tax dollars. Now there’s a way to pay for expenses not covered by your benefit plan before federal, state and Social Security taxes are deducted from your paycheck. Participation You may elect a health care spending account during the Annual Open Enrollment. The amount that you contribute cannot be changed during the plan year unless you experience a qualified change in status. If you do not enroll during open enrollment, you will not be able to enroll until next year’s open enrollment unless you experience a qualified change in status. Contributions The minimum that you can contribute is $10 a month. The maximum that you can contribute is $416.67 a month ($5000 per plan year) or $625 a month for a less than annual faculty member. Eligible Expenses Examples include:
For a more complete listing of eligible expenses, click here. Reimbursement When you or an eligible dependent incurs an eligible expense at a provider that accepts MasterCard, the Benny Card can be used to pay for the qualified expense from your account with pre-tax dollars. If your provider does not accept Master Card, pay for the service and then submit a claim form with your receipt to EBDS. Reimbursement for all flexible spending accounts (health care, dependent day care, qualified commuter expense) can be done through MedSave®. To review the MedSave® Reimbursement process, please click here. You can have your reimbursement deposited directly into your bank account. Click here for a direct deposit form. “Use It or Lose It” FSAs must comply with federal law. There is a "use it or lose it" provision. Careful planning is required. What is not used for services and expenses incurred during a Plan Year and not claimed by the end of the grace period (December 31, 2008), are forfeited and remains in trust to be used only for operating costs of the FSA program. Note: STATUS OF UNUSED FUNDS IF INCOMPLETE PARTICIPATION IN PLAN YEAR Expenses during the Plan Year are not eligible if incurred after termination, suspension or for a leave, or cancellation for a family status change. If unused funds and expenses are incurred after such an event, post-employment or post-participation access is available through continuation of the account on an after tax basis under COBRA. Termination of employment is distinguished from suspension for a leave, family status change, or other employment circumstance for which other “make-up” contributions may be made to activate participation for access funds. The Benny Card The Benny Card is a MasterCard that gives you an easy, automatic way to pay for qualified health care expenses. The Benny Card lets you electronically access the pre-tax contributions you set aside in you respective accounts such as Flexible Spending Accounts (FSA). Potential Savings Think of a FSA as a budgeting tool. Many people already set aside allowances for living expenses such as food, clothing, and utilities. A FSA allows you to save pre-tax dollars to help ease the burden of medical, dental, and vision expenses that you may incur in the coming plan year. You decide how much you want to put into the account. This amount will be deducted from your pay check on a monthly basis. Pay eligible expenses with tax free dollars, using the convenient "Benny Card." Example:
You may find it helpful to estimate your out-of-pocket expenses for the coming year by using the Flexible Spending Calculator. The calculator will provide an estimate of your expenses, calculate your potential savings, and suggest an amount for you to contribute for each pay check. You should take into consideration any known factors that could have an impact on these amounts. Dependent Day Care Flexible Spending Account Description The dependent day care account reimburses dependent day care expenses necessary while you (and your spouse, if you are married) are working on a full-time basis or attending school full-time. Typically this includes day care expenses for children, but you can also use this account to reimburse day care expenses for other dependents, such as a spouse, parents or grandparents who cannot care for themselves. Your dependent must live in your home at least 8 hours a day. Participation You may elect a dependent day care spending account during the Annual Open Enrollment. The amount that you contribute cannot be changed during the plan year unless you experience a qualified change in status. If you do not enroll during open enrollment, you will not be able to enroll until next year’s open enrollment unless you experience a qualified change in status. Contributions The minimum that you can contribute is $10 a month. The maximum that you can contribute is $416.67 a month ($5000 per plan year) or $625 a month for a less than annual faculty member. Special Considerations By IRS rules, married individuals who file separate tax returns are limited to a $2,500 contribution annually. You may contribute up to $5,000 if you are married and file a joint tax return, provided both you and your spouse each earn more than $5,000 annually. If one of you earns less than $5,000 during the year, you are limited to a maximum spending account contribution equal to the salary of the lowest-earning spouse. Time spent by a student spouse in educational endeavors is considered working for the purposes of opening an FSA. Volunteer work does not qualify. If both you and your spouse work at the University of Pittsburgh, you must coordinate your dependent day care enrollments so that the two of you together stay within the $5,000 annual maximum. You may only claim dependent care expenses on children age 12 and younger, unless the dependent is disabled. Tax Credit Versus Spending Account Is it more advantageous for you to take the tax credit for dependent care expenses OR to pay for these expenses through a dependent care FSA? You cannot claim the same expenses both ways. Tax Credit: As income increases, the tax credit becomes less valuable. You may claim up to $2,400 in dependent day care expenses for one dependent or $4,800 for two or more dependents. Your actual tax savings, however, depends upon your income. For example, a family with taxable income of $10,000 is eligible for a 30 percent credit, giving them a $750 savings on $2,500 of expense. Meanwhile, a family with taxable income of $28,000 would receive only 20 percent credit for the same expense, giving them a $500 savings on $2,500 of expense. Remember, taxable income is your income after you have subtracted exemptions and deductions. Dependent Care FSA: Reimbursement of dependent care expenses through an FSA becomes more valuable as family income increases. The crossover income level at which the advantages of both methods are about equal (in terms of federal income and Social Security taxes) occurs at $24,000 of adjusted gross income. Use this general rule as a guideline only! Eligible Expenses Examples include:
For a more complete listing of eligible expenses, click here. Reimbursement After receiving and paying for dependent care services, submit a claim form along with the original bill and proof of payment. Expenses must be incurred within the current plan year. The requested amount will be paid from the participant’s reimbursement account as long as it does not exceed the dollar amount that is in the account when the request is made. Reimbursement for all flexible spending accounts (health care, dependent day care, qualified commuter expense) can be done through MedSave®. To review the MedSave® Reimbursement process, please click here. You can have your reimbursement deposited directly into your bank account. Click here for a direct deposit form. “Use It or Lose It” FSAs must comply with federal law. There is a "use it or lose it" provision. Careful planning is required. What is not used for services and expenses incurred during a Plan Year and not claimed by the end of the grace period, are forfeited and remains in trust to be used only for operating costs of the FSA program. Note: STATUS OF UNUSED FUNDS IF INCOMPLETE PARTICIPATION IN PLAN YEAR Expenses during the Plan Year are not eligible if incurred after termination, suspension or for a leave, or cancellation for a family status change. If unused funds and expenses are incurred after such an event, post-employment or post-participation access is available through continuation of the account on an after tax basis under COBRA. Termination of employment is distinguished from suspension for a leave, family status change, or other employment circumstance for which other “make-up” contributions may be made to activate participation for access funds. Qualified Commuter Expense Reimbursement Account Description The Qualified Commuter Expense Reimbursement Account is similar to the pre-tax health care and dependent day care spending accounts. This program allows you to pay for certain work related commuting expenses with tax-free dollars. Two important differences between this account and the health care and dependent day care account is that the commuter account does not include a “use it or lose it” penalty and it can be used for employee work related commuting expenses only. Types of Accounts The Qualified Commuter Expense Reimbursement Account consists of two types of accounts: the qualified parking expense account and the qualified mass transit expense account. You can choose to participate in one and/or both accounts. Participation You may elect a qualified commuter expense reimbursement account during the Annual Open Enrollment. If you do not enroll during open enrollment, you will not be able to enroll until next year’s open enrollment unless you experience a qualified change in status. Contributions
Eligible Expenses Examples include:
Non-covered Expenses Examples include:
Reimbursement When you incur an eligible expense, you first pay for the service or product and then you file a claim form with the appropriate documentation with EBDS. Reimbursement for all flexible spending accounts (health care, dependent day care, qualified commuter expense) can be done through MedSave®. To review the MedSave® Reimbursement process, please click here. Reimbursement will only be made on the form of direct deposit. Unused Funds Unclaimed contributions will roll over from month to month and plan year to plan year. This means that any portion of your monthly contribution to the Commuter Expense Account that is not reimbursed during a particular month will roll over to subsequent months until you submit an eligible claim. For example, if you elect to contribute $125 for parking and only incur $100 of eligible expenses in January, the remaining $25 will roll over to the following months until you submit an eligible claim for it. However claims do not roll over from month to month. If you elect $125 a month for parking and incur and submit $150 in eligible claims in January, you will only be reimbursed $125. If you incur only $100 in eligible claims in February, you could not use the remaining $25 for January’s claim. The $25 would roll over to the following month. “Use it or lose it” does not apply unless you discontinue the program or if you terminate employment and do not submit eligible claims for reimbursement within 90 days. Important Information about Claims Ø Claims are submitted on a monthly basis and will be paid after the expense is incurred (meaning a Plan Participant has been provided services that gives rise to an expense, not when a Plan Participant is billed, charged for or pays for services) Example: You pay for your July lease on July 1 and submit the claim on July 5; you will not receive reimbursement until August because the service must be incurred first. Ø There is a $25 minimum reimbursement for both the parking and mass transit accounts. There is a $110 maximum reimbursement for the mass transit account and a $215 maximum reimbursement amount for the parking account. Ø Claims which are not supported by appropriate documentation will be returned to you and can be resubmitted with appropriate documentation to be paid at a later date. Ø Claims incurred during the plan year while you are enrolled which are not submitted within 90 days after the end of the plan year or within 90 days after your termination in the program, will not be eligible for reimbursements. Changes and Cancellations
· Changes to your elections may be made at any time; however changes will only take effect the first of the following month. Changes must be received in the Benefits Office by the last business day of the month prior to the effective date. Limitations
· Expenses must be incurred by you during the Plan Year · Expenses must be incurred while you are a participant in the Program
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Reimbursements cannot be paid unless your account is credited with enough
contributions applicable to the time you incurred your expense. |
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