Flexible Spending Account
All full-time University (LUC) Faculty and Staff employees scheduled to work in a position classified as .80 FTE (Full Time Equivalent or greater) are eligible to enroll in the FSA plan. All full-time Stritch School of Medicine (SSOM) Faculty and Staff employees scheduled to work in a position classified as .80 FTE (Full-Time Equivalent or greater) are eligible to enroll in the FSA plan.
The University recognizes the need to provide a program that helps you pay for expenses not covered by your health plan and expenses related to dependent care. Flexible Spending Accounts (FSAs) for Health Care Needs and/or Dependent Day Care Needs, used properly, can help save you money on these expenses. By participating in either or both of these flex accounts you use pre-tax dollars to pay for certain out-of-pocket expenses not covered under your insurance plan. The dollars you save are from the following payroll taxes:
- Federal Income Tax
- State Income Tax
- Social Security (FICA) Tax
Benefit Express administers the FSA plan for Loyola University. Once enrolled, it is easy to access information and download forms through their website at www.loyolaexpress.com. Claim forms may be faxed to Benefit Express at 253.793.3766. For additional information call 877.837.5017.
- Enrolling in a Flexible Spending Account
- How Much to Contribute
- Health Care Account
- Dependent Day Care Account
- Eligible Expenses and Limitations
- Restrictions For Changing Your Flexible Spending Account(s)
To learn more about Loyola’s Benefits please click on the desired link. For detailed benefit information, download the benefits booklet.
Enrolling in a Flexible Spending Account
As a new hire, employees may participate in either or both the Health Care and Dependent Day Care Flexible Spending Accounts (FSA). New employees must enroll within their first 30 days of employment. If employees do not enroll at this time, the next opportunity to enroll is during the annual Benefits Open Enrollment period, which is generally held in the fall.
Each year during the benefits open enrollment period, employees decide if they want to participate in one or both of the Flexible Spending Accounts for the following year. If employees decide to enroll in the program, they will also have to decide how much to contribute to each account. Employees cannot stop, start, or change this decision during the calendar year unless they experience a change in family status as defined by the IRS and the Plan. Yearly enrollment is an IRS regulation.
FSA Debit Card—Benefit Express
The Benefit Express issues a debit card that can simplify the process of paying for eligible medical and dependent care FSA expenses. Employees can use the card at qualifying merchant locations, pharmacies, and doctors' offices that accept MasterCard. It is employees' responsibility to ensure that their FSA MasterCard is used only for qualifying medical and dependent care expenses, as well as for checking their account balances to make sure sufficient funds are available. When employees activate their cards, they are loaded with the amount employees have elected to contribute to their benefit program. As employees use the card to pay for items eligible for reimbursement, corresponding deductions will be made from the card balance.
Special arrangements that have been made with merchants such as Walgreens and Walmart allow employees to make eligible over-the-counter drug purchases that are automatically approved. In most cases, this means that employees will not be required to submit receipts for substantiation, although it is always recommended that employees keep receipts in case a situation arises in which a transaction is questioned. In other transactions, outside of Walgreens and Walmart, employees will be asked to provide copies of documentation. It is recommend that employees keep all receipts for the entire plan year, in the event that supporting documentation is requested.
The FSA Debit Card allows employees to pay for eligible expenses at the point of service. Additional benefits include:
- Immediate access to FSA account—avoid paying with cash or check
- Immediate payment of the expense—avoid waiting for the reimbursement check
The ease of use at the point of sale reduces the burden of having to pay money out-of-pocket and eliminates the wait for reimbursement. These have proven to be extremely convenient for plan participants. [If you prefer not to use your Debit Card or unable to, please follow instructions under the "Reimbursement Process" below]
How Much to Contribute
There are maximum allowable contributions that limit the salary dollars employees may set aside. The health care FSA yearly election maximum for 2015 and 2016 is $2,550. The new limit is per participant and not per household. Therefore, if a husband and wife both participate in their respective employer’s FSA plans, they may have a combined household pre-tax contribution of $5,000 for the taxable year, but neither may contribute more than the $2,550 per person pre-tax limit (e.g. one cannot contribute $2,000 and the other contribute $3,000).
In addition, under the guidelines of this program, the IRS Code specifies that:
- Any money not used for allowable expenses within the calendar year is forfeited and will not be refunded
- Requests for reimbursement of dollars expended within the benefit calendar year must be submitted to Benefit Express along with the required documentation prior to March 31 of the following year
- Expenses reimbursed through these accounts cannot be claimed as deductions or credits when filing income tax returns
To avoid forfeiture of yearly elections, consider carefully the dollar amount to set aside. Review out-of-pocket expenses for the previous 2 or 3 years. Identify how this might change in the current year, and elect amounts that will cover realistic expenses. Because this program offers tax savings under IRC Section 125, unused pre-tax salary reductions cannot be returned or rolled-over into future plans' years. IRS regulations require that all funds be used or forfeited in the plan year in which the salary reduction was made.
Restrictions for Changing Your Flexible Spending Account(s)
Employees may elect to enter, exit, or change FSA election only if they experience one of the following events:
- Change in legal marital status (marriage, divorce, death of a spouse)
- Change in number of tax dependents (birth of a child)
- Employment status change for employee, spouse, or dependent
- Dependent satisfies, or ceases to satisfy, eligibility requirements
- Residence change by employee, spouse, or dependent
- Change in cost of covered daycare
A status change can be made only if it is consistent with the change in family or employment status and if the Human Resources Department is notified within 30 days of the change.
The IRS requires anyone contributing to a Dependent Day Care Flexible Spending Account to complete Form 2441. The form can be found on the Benefits website.
Employees may begin submitting requests for reimbursement, along with the required documentation of expenses incurred, after the date they became eligible participants in the plan. Employees may choose to receive their reimbursement check through the U.S. mail, directed to their homes, or may sign up for automatic Direct Deposit to savings or checking accounts. The request for Direct Deposit can be accessed through Benefit Express by visiting www.loyolaexpress.com.
Employees are required to use the FSA Reimbursement Request Form for submitting all eligible expenses to Benefit Express. Benefit Express forms can be printed from their website, along with directions for completion of the form. When submitting, please furnish documentation of expenses incurred, either through an itemized statement from the provider, your own explanation of benefits form, or a signed and completed Provider's Signature on the form from a doctor, dentist, or pharmacist. The form allows employees to list several expenses at once. There is a minimum of $25 in expenses before the reimbursement will be processed. Remember to sign the form and attach supporting documentation. The easiest way to submit the form for reimbursement is by fax at 253.793.3766. Whether faxed or mailed, always keep a copy of all information submitted for your records.
Reducing taxable income may affect future Social Security Benefits.
The IRS will not allow employees to take the Dependent Care Tax Credit for expenses reimbursed through an FSA account.
Depending on employees' personal situations, the Dependent Care Tax Credit may be more advantageous than the Pre-Tax Flexible Spending Account.
Consult your tax advisor.
|Flexible Spending Accounts—A Pre-Tax Savings|
|Without FSA||With FSA|
|Pre-Tax Health FSA||0||2,550|
|Pre-Tax Dependent FSA||0||5,000|
|Federal Income Tax||5,250||4,125|
|State Income Tax||1,050||825|
|Estimated Savings = $1,924|
Actual savings will vary based on individual tax situations. **Please note that the deadline by which to submit reimbursement claims against a 2015 plan year balance is 3/31/2016. This reminder applies to all active employees and participants in the 2015 FSA plan/s.**