Flexible Spending Accounts for 2013

The University offers eligible employees two types of Flexible Spending Accounts (FSA)—a health care account and a dependent daycare account. These accounts allow you to pay for related eligible expenses using pre-tax dollars.

During open enrollment, you elect an amount to be withheld from your pay before federal, state, and Social Security taxes are withheld. That amount is deducted from your pay in equal installments throughout the upcoming calendar year. You may contribute a minimum of $100 and a maximum of $5,000 each calendar year from your pay. For the dependent day care FSA, the maximum amount is $5,000 per family.

When you incur an eligible expense, you submit a claim form to Employee Benefits. You are then reimbursed with tax-free dollars from your account, typically within two weeks.

Health Care FSA

Effective January 1, 2011, Section 9003 of the Affordable Health Care Act establishes a uniform definition for medical expenses. As a result, reimbursement will be made only if the medicine or drug: 1) requires a prescription; 2) is available over the counter (OTC) and the individual obtains a medical provider's prescription - a written statement that the OTC item is being purchased for a specific, named medical condition; or 3) is insulin.

Note: The rule affects purchases made in the 2-1/2 month grace period for 2010 accounts (January 1 to March 15, 2011). OTC medicines and drugs purchased without a prescription (except insulin) on or after January 1, 2011, will not be eligible for reimbursement through the Health Care FSA.

Some examples of eligible expenses include deductibles and copayments under your medical plan and dental plans or plans covering your eligible dependents, prescription drug copayments, durable medical equipment, diabetic test strips and syringes, prescription eyeglasses and contact lenses, laser eye surgery, mental health copayments and services over medical limits, and services and prescription drugs for infertility treatments. Note that if you simultaneously participate in a medical Health Savings Account (HSA), you may use your health care FSA only for eligible dental and vision expenses.

When a pharmacist fills a prescription for certain OTC medicines, it can also be submitted through the UPlan pharmacy program. OTC medicines such as insulin, smoking deterrents, and medications for gastric disorders can be submitted, subject to normal copays. Details are in the UPlan Formulary at www.myprime.com/myprime/umn.

For more information, see the Health Care FSA Procedures & Eligible Expenses (pdf). (Pending: to be posted November 1, 2010)

Dependent Daycare FSA

An eligible expense is the charge for care of your dependents while you (or you and your spouse/same-sex domestic partner) work. Some examples of eligible expenses include daycare center, nursery school, and babysitter costs; preschool below the kindergarten level; specialty day camps (such as soccer or computer camps) if otherwise qualified; and nursing or custodial care for elderly or disabled dependents who live with you at least eight hours per day and are unable to care for themselves.

You may file claims for expenses incurred beginning January 1, 2012, and ending March 15, 2013, drawing on deposits made to your account throughout 2012. (Current participants, please see "If You Currently Have an FSA" above.) The IRS requires that if you do not use the full balance in your FSA for expenses incurred during this 14½-month claim period, you lose the unused portion. Any remaining balance in your FSA is forfeited and retained by the plan.

For more information on reimbursable expenses, see the Dependent Daycare FSA Procedures & Eligible Expenses (pdf).