Information on Spending Accounts
Information on Spending Accounts
Information on Reimbursement Accounts
Reimbursement Accounts, sometimes referred to as Section 125 Plans or Flexible Spending Accounts, allow reimbursement of certain expenses with tax-free dollars. BGSU offers two Reimbursement Accounts through the FlexSave program administered by Medical Mutual Services:
- A Health Care Account for medical, dental, prescription and vision expenses not covered by a benefit plan. Over-the-counter medicines can only be eligible for reimbursement through the Health Care Spending Account if the reimbursement request is accompanied by a doctor's prescription.
- A Dependent Care Account for work-related child care or elder care expenses
The money you put into the Reimbursement Account is a "before tax" contribution from your pay, which means that you do not pay federal or state income taxes on the amount you contribute.
Health Care Reimbursement Account
You can use the Health Care Reimbursement Account to reimburse yourself for qualifying medical care expenses not paid by your medical, prescription or dental plans and that are eligible for deduction on your federal income tax return. Examples of eligible expenses include:
- Deductibles for medical and dental expenses
- Over-the-counter medicines can only be eligible for reimbursement through the Health Care Spending Account if the reimbursement request is accompanied by a doctor's prescription.
- Co-insurance and co-payments for medical and or dental services
- Mileage to and from doctor and pharmacy visits, to outpatient and inpatient facilities
- Eye examinations and glasses or contacts
- Expenses for medical or dental care that are more than the traditional allowance
The health care account can also reimburse nontraditional health care expenses such as acupuncture, massage therapy (with physician prescription and documentation of why massage therapy is needed), Braille books, tuition fees for learning disability programs and special telephone equipment for the deaf.
For the Plan Year starting January 1, 2014, the maximum you are eligible to contribute to your Health Care Account is $2,500 and the minimum amount is $360.
Thoughts to consider before electing to set up a Health Care Reimbursement Account
Some questions you may want to consider when deciding whether to participate in the Health Care Reimbursement Account include:
- Do you typically incur and pay medical and/or dental plan deductibles each your for yourself and/or eligible dependent(s)?
- Do you have extensive orthodontic expenses not covered under the dental plan?
- Are you or one of your dependents planning to get new glasses or contact lenses?
- Are you or one of your dependents on brand-name maintenance medication for which you pay 20-40 percent?
- Do you have any other incidental medical, dental or hearing expenses not covered under your plan?
Filing a Claim
The Internal Revenue Service requires that benefits from any other health care coverage must be paid prior to payment from your reimbursement account. For instance, if you have dental coverage through Bowling Green State University and your spouse's employer, you must file any dental expenses incurred with both plans before filing for reimbursement under this plan. You will be required to provide proof that the other plan(s) has considered the expenses in question by submitting copies of the payment or explanation of benefits worksheet. You will be reimbursed for eligible expenses up to the maximum amount you have elected. The total amount you choose to deposit in the Health Care Reimbursement Account during the Plan Year is available anytime during the year. Remember, you must enroll each year (turn in a form) during open enrollment to be able to access this benefit.
Dependent Care Reimbursement Account
You can use the Dependent Care Reimbursement Account for work-related eligible child care and elder care expenses. To qualify, you (if single) or you and your spouse must be at work full-time, looking for full-time work or attending school on a full-time basis when your dependent(s) receives care. Eligible expenses under the Dependent Care Reimbursement Account are those that could otherwise be claimed for the Dependent Care Tax Credit on your federal income tax. Eligible services must be for a dependent child who is under 13 years of age or a dependent who is disabled and unable to care for him or herself and qualifies as your tax dependent.
The Dependent Care Account can be used to reimburse expenses such as:
- Licensed nursery schools and child-care centers
- Work-related babysitting (in or out of your home)
- Licensed disability day-care centers
- Home-care specialist for disabled dependents
- Housekeepers in your home, provided their work includes caring for your children or elders.
The maximum amount you are eligible to contribute for the period January 1 - December 31, 2013, may not exceed:
- $5,000 if you and your spouse file join IRS tax returns
- $2,500 if you are single, or you and your spouse file separate tax returns
Services for dependent care can be paid through the Dependent Care Reimbursement Account or claimed as a credit on your federal tax return, but not both. You may want to consider which method makes the best economic sense. If you are unsure of which method to use, you may want to consult your tax adviser.
Some things to consider before enrolling in the Dependent Care Reimbursement Account
The following questions may assist you in deciding whether or not to participate in the Dependent Care Reimbursement Account:
- Do you have a child(ren) under age 13 who requires attention to enable you and your spouse to work full-time outside of the home?
- Do you have a disabled spouse for whom you must provide care to enable you to work?
- Do you have a parent who is incapable of self-care who qualifies as your dependent for income tax purposes?
- Did you compare the federal tax credit vs. the Dependent Care Reimbursement Account to see which is better for you? You can check with your tax adviser, or contact FlexSave at 1-800-525-9252.
The IRS Code requires that any amount left in either a Health Care or Dependent Care Reimbursement Account at the end of the filing date (90 days from coverage ending date) be forfeited. The funds cannot be returned to you. As permitted by IRS, money forfeited from reimbursement accounts in 2013 and beyond will be used to offset administrative expenses.
If you are thinking about enrolling in one or both of the reimbursement accounts, the following Internal Revenue Service regulations are important to know. Once you decide to participate in one or both of the accounts, your decision will remain in effect through December 31, 2013.
- Any balance in either of the reimbursement accounts not used for eligible expenses will be forfeited at the end of the Plan Year. You will have 90 days following December 31 to submit claims for reimbursement for expenses incurred between January 1, 2013 and December 31, 2013 (as long as you remain eligible). Reimbursement forms must be received by FlexSave by the 90-day deadline.
- In the event you resign or retire, you have 90 days from the date of that event to submit claims for the time period that you were employed during the calendar year (Plan Year). Reimbursement forms must be received by FlexSave by the 90-day deadline.
- You may change your payroll deduction amount for your reimbursement accounts during the year only if you have a qualified change in family status. A qualified change in status is defined as marriage, birth or adoption, death, divorce or change in your own or your spouse's employment status. If one of these events occurs, you may change your election by completing a new form and returning it to the Office of Human Resources within 31 days of the event.
The amount you elect to deposit into one or both accounts will be spread equally over all of your pay periods between January 1, 2013 and December 31, 2013. Starting with your January 2013 pay(s), the amount will be deducted from your paycheck before taxes and then deposited into your reimbursement account. If you do not receive pay for one or more of your scheduled pay periods and you elected to be in one or both of the reimbursement accounts, the amount deducted for your account(s) will be increased in subsequent periods in order to achieve your annual Plan Year deferral election, as required by law.
Medical Mutual Services/FlexSave administers the reimbursement accounts for BGSU. Here are a few administrative procedures followed:
- Reimbursement checks are issued weekly
- Your reimbursement account check stub will include information on what your total contributions are as a that date, the amount of unpaid or partially paid claims you submitted and the total payments reimbursed to you.
Only services incurred between January 1, 2013 and December 31, 2013 can be filed for reimbursement. You have 90 days from the end of coverage to file claims for reimbursement unless your resign or retire during the year. If you resign or retire during the year, you have 90 days from the date of that event to file for claims incurred during the time of employment during that year. Reimbursement forms must be received by FlexSave by the 90-day deadline.
|Office of Human Resources|
|1851 N. Research Drive|
|(419) 372-8421 | Fax: (419) 372-2920|