Flex spending accounts explained
Need help paying for health care, dependent care and work-related transportation or parking expenses?
Flexible spending accounts, in which you put aside money from your salary before it is taxed, could be the answer. Dana Osborne, senior ancillary analyst with UPMC Health Plan’s Benefits Management Services, explained flexible spending accounts at the latest Staff Association Council brown bag seminar on March 20.
Staff and faculty can sign up for the accounts when Pitt’s open enrollment period begins on April 23.
The flexible spending account (FSA) plans, described on the Pitt benefits website (www.hr.pitt.edu/benefits/health-and-wellness/flexible-spending), are available to all employees during Pitt’s annual open enrollment period and when they experience a change in status, such as having a child, marrying or divorcing. New employees can sign up when they are hired. By not paying taxes on the amount deposited into the flexible spending accounts, employees can save 20-40 percent of the cost of items for which FSA funds are withdrawn, Pitt’s Human Resources department estimates.
Health care
The health care FSA may be used for medical expenses not covered by medical, dental or vision insurance, including such items as additional pairs of glasses or contacts as well as office-visit and prescription-drug copayments and over-the-counter medications for which you have a prescription. The FSA may not be used for medical procedures such as cosmetic surgery.
The maximum annual contribution an individual may make to a health care FSA is $2,500. Users of the health care FSA are given a MyFlex Advantage Card, which usually can be used right at the medical office, pharmacy or optician’s office to pay for eligible items. Alternatively, employees may pay for an eligible item and then get reimbursed from the FSA account.
Money in a health care FSA must be used during the year in which it was accumulated; the plan year runs July 1-June 30. However, FSA users currently have a two-and-a-half month grace period after June 30 to submit claims for the previous plan year.
Beginning with the 2015-2016 benefits year, on July 1, 2015, health care FSA users will no longer have this grace period. Instead, they will be able to roll over up to $500 from the previous year’s FSA on top of the $2,500 maximum for that new year. Employees then will have six months to finish submitting claims for the previous year.
About 96 percent of Pitt employees’ health care FSA-covered costs are paid for via the MyFlex Advantage Card, to the tune of $2,287,100 last year, Osborne reported.
For those who submit online claims, turnaround time is 2-3 business days, she said. Direct deposit, 24/7 online account access through my.pitt.edu and semiannual paper balance statements also are available.
Dependent care
The dependent day care FSA is used to pay for day care costs for children 12 and younger while you are working full time. It also can be used for other dependents who reside in your house for at least eight hours each day and cannot handle their own care, such as a grandparent or child 13 or older with a disability. Funds in this FSA may be used for summer day camps, afterschool care and elder care as well as in-home nursing care. They may not be used for babysitting unrelated to your work hours, overnight camps, school costs above the preschool level or long-term care, according to Osborne.
The maximum amount allowed in a dependent care FSA each year is $5,000.
After you have received and paid for eligible services, you submit claims for reimbursement online (http://www.upmchealthplan.com/myflex/claims.html) within one month of the service. This same deadline and site apply to online claims for the two commuter FSAs.
Parking
The parking FSA lets you put aside money to pay for parking in a non-University lot near your office or your mass transit stop, as well as for vanpool fuel costs. It can’t be used to pay for tolls, gasoline, mileage or non-work related parking or parking for your family.
The maximum amount you may be reimbursed from your parking FSA is $240 per month.
Transit
The transit FSA funds your use of mass transit between your home and office. This FSA defines mass transit as a vehicle that transports at least six people, and for which half the seats are occupied.
Participants may accumulate no more than $125 per month in reimbursable expenses from this FSA.
FSA users currently have 180 days to make final reimbursement claims after stopping any FSA or leaving their job, Osborne said, but she noted that users should be cautious because the rules for these accounts “usually change each year.”
—Marty Levine