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.
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:
- Prescription drug copayments
- Office visit copayments
- Deductibles and coinsurance for medical and dental plans
- Eyeglasses and contact lenses
- Over the counter medications
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 online and fax your
receipt to EBDS.
Starting July 1, 2004 you can have your reimbursement deposited directly into your bank account.
Click here for a direct deposit form.
“Use It or Lose It”
Careful planning is required.
Positive changes to regulations announced. (.pdf)
FSAs must comply with federal law. There is a "use it or lose it" provision. What is not used for services and expenses
incurred during a Plan Year or the 2 1/2 additional months (e.g. until September 15, 2006 for the plan year that
ended June 30, 2006) 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.
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:
| |
Employee Contribution without a 125 FSA Plan |
Employee Contribution with a 125 FSA Plan |
| Annual Income |
$25,000 |
$25,000 |
| Pre-Tax Contribution |
$0 |
$1,200 |
| Taxable Income |
$25,000 |
$23,800 |
| Federal Taxes |
$3,057.50 |
$2,787.50 |
| FICA Taxes |
$1,912.50 |
$1,820.70 |
| State Taxes |
$700 |
$666.40 |
| After Tax Contribution |
$1,200 |
$0 |
| Net Take Home Pay |
$18,130 |
$18,525 |
| Savings |
|
$395.40 |
You may find it helpful to estimate you 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.
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