Flexible Spending Accounts
FSAs are a unique employer sponsored plan authorized by the federal government to help families pay for health care and dependent care expenses. By enrolling in one or both of these accounts, you can pay for eligible, out-of-pocket health and dependent care expenses with pre-tax dollars – reducing your taxable income and increasing your take
home pay.
You may elect to participate in either or both the health care reimbursement account (HCRA) or the dependent care reimbursement account (DCRA); however, money cannot be transferred between the accounts. For example, money in your HCRA may not be used to pay for dependent care expenses.
Learn more:
HCRA
DCRA
The FSA plan is administered by Colonial HealthCare, Inc. You may contact Colonial HealthCare by calling 1-877-819-9413 or by visiting their website at www.fsaontheweb.com.
The Benefits Card
All FSA participants will receive a debit-style MasterCard that allows direct access to FSA funds for eligible health care and dependent care expenses. This means no waiting period for reimbursements. When you use your card, available funds are deducted from your FSA account to pay for services or supplies. All you need to do is submit your receipts within 10 days to Colonial HealthCare in order to comply with IRS rules. Use of the card is optional – traditional claim processing remains available and must be used for purchases from providers who do not accept MasterCard or are not designated as eligible merchants.
Eligible Expenses
For the most up-to-date and complete list of examples of eligible and ineligible expenses for the HCRA and DCRA, please visit fsaontheweb, a site maintained by ColonialHealthcare. Because vision correction surgery (aka "lasik" surgery) and teeth whitening (or bleaching) are particularly popular procedures, we wanted to provide some information about them on this website. Vision correction surgery is an eligible expense under the HCRA. Teeth whitening is not an eligible expense under HCRA.
Filing Claims
You may be reimbursed from your HCRA or DCRA accounts using the Benefits Debit Card, or by submitting a completed claim form to Colonial HealthCare. You may download the form and instructions here. Follow the instructions on the form. Please read above (the section entitled Use It or Lose It!) for information regarding claim filing deadlines.
When filing a claim, you must specify the Plan Year contributions from which you wish to be reimbursed. If you do not, you will be reimbursed with funds from the plan year in which the claim was incurred (provided you are enrolled for that year). If your expense is incurred during a grace period, and you specify that you want the claim applied to the prior year's funds, but there are insufficient funds remaining in that year's account, then the prior year's account will be "zeroed out" and the remainder of the claim will be applied to the current year's account.
Remember, when using your Benefits Debit Card, you are still required to submit your receipts to Colonial HealthCare within 10 days of the transaction date. You may use the claim form, indicating this was a debit card purchase, when submitting your receipts.
FSA Savings Example
Here is an example of how participating in FSAs can lower your taxes and help you save money.
Enrolling in the Flexible Spending Accounts
Participation in the HCRA and DCRA starts on the first day of the month following enrollment, provided you have completed the Enrollment Form and filed it with the Faculty and Staff Benefits Office by the last day of the month following your month of employment.
Once you make an election in one calendar year, it can only be changed or stopped if you have a change in personal circumstances, such as marriage, divorce, or the birth of a child. If you choose not to enroll as a new employee, you may enroll during Open Enrollment, which is held each November. Your enrollment will become effective on the following January 1st.
Use It or Lose It!
The Internal Revenue Service has strict rules about spending accounts. You must use the money you have paid into the account for expenses you have incurred during the same calendar year or in the grace period for that year. Any money remaining unclaimed at the end of the grace period will be forfeited and is lost to you. This means you must carefully estimate the eligible out-of-pocket health and dependent care expenses you expect to incur.
The grace period for any Plan Year (calendar year) is January 1 through March 15 of the following calendar year. If you have unused contributions in your account by the end of the Plan Year, and you incur expenses during the grace period, you can file a claim and be reimbursed with contributions from the prior year. The deadline for filing such claims (i.e., expense incurred during grace period, reimbursement from prior year's account) is the April 30 following the grace period.
The following chart illustrates this rule:
Upon Leaving the University
If you terminate employment during the year, eligible expenses must be incurred on - or before - your date of termination. The claim must be filed with Colonial Healthcare, Inc., no later than 90 days from your date of termination in order for it to be reimbursed by the Plan. See FAQs for more information.
Questions?
Visit our Frequently Asked Questions (FAQs) section to learn more about FSAs and the Debit Card.
