Flexible Benefits Plan

What is a Flexible Spending Account?

If you paid for any out-of-pocket medical and dependent care expenses this year and are not currently enrolled in the University's Flexible Spending Account plan, you are paying more in taxes than you would have if you were enrolled in the program. A flexible spending account allows you to take money from your compensation and place it into accounts for medical and dependent care expenses. These funds are not taxed, thereby potentially saving you hundreds of dollars. The money put aside in the account is then used by you to pay eligible medical and dependent care expenses. These payments can be made via the debit card provided or you can make the payments and request reimbursement from the funds in your account.

The administration of our medical and dependent care flexible spending account(FSA) programs are overseen by a company called Optum Bank - 866.600.4984.

• The maximum you may contribute to a medical FSA is $3,050.
• The maximum you may contribute to a limited purpose FSA is also $3,050.
  
  
• The University of Tennessee Health Science Center uses the carry over method. This means that you will no longer be able to use claims dated past December 31st for your prior year plan, instead you will be allowed to carry over up to $610.00 into your plan. (If you are changing from a Flex plan to a Health Savings Plan then this carry over will have to be in a Limited Purpose Flex Plan (this can only be used for dental and vision claims).
• The dependent care FSA does not have a carry-over provision, so any funds remaining in that account after 12/31 will be forfeited.
• The Flex visa card will no longer have Dependent care amounts loaded to it, so you will not be able to use the cards at your child care provider (most providers did not take the cards anyway)
• If you enrolled in the CDHP health plan with the Health Savings Account you cannot enroll in a traditional FSA for medical expenses you must choose the Limited FSA.
• All Claims for the calendar year must be filed by April 30th in the next year or they will be denied if submitted after this date.

There are four different FSA plans available:

• Medical: You may set up a FSA to pay many of your and your family's medical expenses that are not already covered by insurance, such as the insurance plan deductible or copayment amounts, contact lenses or glasses, certain non-cosmetic dental procedures, prescription drugs or their copayment amounts, hearing aids and other qualified expenses. You do not qualify for a medical FSA if you are enrolled in the Health Savings CDHP. However, you can put money in a limited purpose FSA for dental and vision expenses.
• Limited Purpose: While anyone who wants to can enroll in a limited purpose FSA, those who are enrolled in the Health Savings CDHP with a health savings account (HSA) may find it particularly attractive since they may not enroll in the medical FSA option. You can use the limited purpose FSA to pay for certain dental and vision costs not covered by insurance.
• Dependent Care: You may set up a FSA to pay for certain dependent-care costs such as after-school care, baby-sitting fees, adult or child daycare and preschool. You must be working and your spouse must be either working, looking for work, in school full time or incapable of self-care. The dependent care FSA does not have a carry-over provision, so any funds remaining in that account after 12/31 will be forfeited.
  • The maximum that a family may contribute to the dependent care FSA is $5,000 (up to $2,500 each if both spouses are working).

What Happens if I Go On Leave of Absence without Pay, Change to Term, Retire, or Otherwise Terminate Employment

If you go on leave of absence without pay, change to term, retire, or otherwise terminate your employment, your flex plan will be shut down as of the date you terminate or are placed on leave. You will have 90 days to submit claims for expenses incurred prior to the leave, retirement, or termination date. In the event of your death, your beneficiary or estate may be reimbursed for expenses incurred prior to your death. Claims for those expenses may be filed through April 30th of the following year. An employee returning from a Leave of Absence will not automatically be reenrolled in a reimbursement account program. The employee must request re-enrollment and complete a new enrollment form within the first 30 days after returning.

What Happens If I End My Account Due to a Life Changing Event?

If you choose to end an account due to a life changing event, your flex plan will be shut down as of the date you request. (This date must be within 30 days of the life changing event). You will then have 90 days from the date your account is shut down to submit claims for expenses incurred prior to the end date of your account. 

CDHP Enrollment

If you are enrolled in a CDHP, you and your enrolled spouse cannot use a flexible spending account (FSA) for medical expenses. You can have a limited purpose FSA to use for dental and vision expenses. You should consider contributing the maximum allowed to your HSA before contributing to your limited purpose FSA because HSA dollars are not "use-it-or-lose-it" like an FSA.

Please visit IRS.gov for more information.