Flexible Spending Account (FSA)
Faculty, Administrative Professionals, and Other Non-Classified Staff
Eligible employees have access to a Flexible Spending Account (FSA) which allows you to pay for eligible health care and child care expenses with pre-tax dollars. An FSA helps you save money because contributions to the account are taken from your wages before taxes and retirement deductions are calculated.
CSU offers two types of accounts, the Health Care Flexible Spending Account and the Dependent Care Flexible Spending Account. You do not have to enroll in a medical plan to participate in an FSA – employees may also participate in one or both plans.
Health Care Flexible Spending Account: Covers eligible medical, dental, and vision expenses. The maximum you may contribute into your Health Care FSA is $2,750 each calendar year. If you and your spouse or domestic partner are both benefits-eligible CSU employees, you may each contribute $2,750 per year.
Dependent Care Flexible Spending Account: Allows you to pay for eligible dependent day care expenses with pre-tax dollars. Generally, child and elder care companion services are eligible expenses. If you decide to participate in the Dependent Care Flexible Spending Account, you may contribute up to $5,000 into the account each year. However, if you and your spouse both work, the IRS currently limits your maximum contribution to a Dependent care FSA as follows:
- If you file separate income tax returns, the annual contribution amount is limited to $2,500 for you and your spouse.
- If you file a joint income tax return and your spouse also contributes to a Dependent Care Flexible Spending Account, your combined limit is $5,000.
- If your spouse is disabled or a full-time student, special limits apply. Limits are defined in IRS Publication 503.
- If you and or your spouse earn less than $5,000 combined, the maximum is limited to your combined earnings.
Initial Enrollment: You must enroll within 30 days of your eligibility date. This initial enrollment is only applicable until the end of the current calendar year. Benefit elections are generally effective the first of the month following your hire/change date. Flexible Spending Account (FSA) contributions are deducted in the month of coverage.
If you are hired or become eligible after the first of the year, contributions will be deducted in equal amounts from your remaining paychecks.
Open Enrollment: An FSA does not automatically continue from year to year. You must re-enroll each benefits open enrollment period to have an account for the next calendar year.
Mid-Year Qualifying Events: Plan your contributions carefully for the entire calendar year, as mid-year changes are subject to restrictions. FSA changes are allowed only in the event of a qualifying event as defined by the IRS, examples include:
- Common Law Marriage
- Birth or adoptions of a child
- Death of an eligible dependent
- Certain changes in your employment status
- Change in dependent care needs (dependent care FSA)
- Child turns 13 (dependent care FSA)
If you have a status change during the plan year, you may be allowed to modify your FSA. Changes must be made in Employee Self-Service within 30 days of the qualifying event. Changes will be effective first of the month following the event date. Changes due to birth or adoption are effective with the date of birth or placement date for adoption.
The IRS applies certain rules for FSA participation.
- Elections must be made prior to the beginning of each plan year and/or effective date. The FSA plan year is a calendar year and begins January 1 and ends December 31. Eligible expenses must be incurred during this time to be eligible for reimbursement. The IRS definition of “incurred” refers to the date the service is provided regardless of when you are billed or when you pay for it.
- You are required to re-enroll in an FSA each Open Enrollment period to continue participation in the next plan year.
- If you do not use all of the money in your Health Care or Dependent Care Spending Account for eligible expenses incurred in the same plan year, you will lose any unused dollars at the end of the year.
- IRS guidelines do not allow you to transfer money from one spending account to another. They consider these separate accounts.
- You are not permitted to make lump-sum contributions to your spending accounts. Your contributions must be made through payroll deduction.
- There is a deduction limit for an FSA which restricts taxable income from being taken below minimum wage as a result of salary reduction.
- You cannot take the federal tax credit or tax deduction for dependent care or health care expenses reimbursed by your FSA.
Common eligible expenses for the Healthcare FSA are prescription drugs, hearing aids, orthopedic supplies, doctor visits and dentist visits.
A Dependent Care FSA covers expenses such as work-related daycare and elderly care costs. For the expense to be eligible, all of the following must be true:
- Under age 13 (stops on 13th birthday) or mentally or physically unable to care for him/herself.
- Spending at least eight hours a day in your home.
- Eligible to be claimed as a dependent on the employee’s federal income tax return. Special rules may apply in divorced or separated situations.
- Receiving care when you are at work and your spouse is at work, searching for work, in school full-time, or is mentally or physically disabled and unable to provide the care.
- Receiving care provided in your home or outside your home by a licensed day or elder care center or by babysitters or companions; this includes relatives, but excludes your dependent children under age 19.
Note: The caregiver must claim the wages you pay him/her on his/her income tax return for the year and you must be able to provide the tax identification number or Social Security Number of the provider when submitting a claim. When you file your personal income tax return, this same information will need to be reported on Form 2441.
View a searchable list of eligible expenses at Discovery Benefits.
Health Care FSA
- Benefits Debits Card: pay for eligible items/services at the point of sale with participating merchants. Amount is deducted directly from your FSA balance.
- Online Claim Submission*: Make an out of pocket purchase and file a claim on the Discovery Benefits Consumer Portal to be reimbursed. Print the confirmation page and submit to Discovery Benefits with your itemized receipt or EOB.
- Claim Submission*: Make an out of pocket purchase and file a claim using the Reimbursement Request Form. Complete the form and submit to Discovery Benefits along with a copy of your itemized receipt or EOB.
*All documentation can be sent via mail, fax, email, or uploaded via your mobile device or computer.
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Itemized Receipts: When submitting a health care reimbursement claim or substantiation documentation on a card charge, attach a fully itemized receipt that includes the date of service, type of service, and provider’s name and/or a copy of the explanation of benefits (EOB) statement provided by the insurance company.
Over the Counter (OTC) Drugs: Claims for over-the-counter drugs must include the itemized cash register receipt attached to the claim form and a copy of the written prescription obtained from a medical practitioner. You may be reimbursed up to your total annual contribution amount, regardless of how much you have contributed to the account year to date.
Dependent Care FSA
You can submit a Recurring Dependent Care Reimbursement Form to Discovery Benefits to be set up for automatic reimbursements throughout the plan year. This is a great feature because you will not need to continually submit claims for reimbursement. You can submit dependent care reimbursement claims as needed by completing a claim form or submitting the receipts electronically through Discovery Benefits secure portal. If you are unable to provide an itemized receipt with the claim, please have your Dependent Care provider sign Section 2b of the Reimbursement Request Form. Claims cannot be submitted until after the dependent care services have been provided.
You will be reimbursed if there are sufficient funds in your account. Otherwise, you will receive reimbursement for the amount in your account and the remainder will be paid when your account balance permits. Be sure to keep copies of your mailed claims and supporting documentation. No documentation will be returned to you.
Claims Processing Schedule : Claims are processed within two business days from submission. If the claim is approved a reimbursement payment is issued on the following business day.
Year End Claim Filing Due Date: You will have 90 days following the end of the plan year to submit claims incurred during the plan year.
Note: This is not applicable if your eligibility ends before the end of the plan year.
Direct Deposit: All reimbursements will be made to you either by check or direct deposit. You will be responsible for paying the health or dependent care provider.
Your FSA will terminate:
- On the date you end coverage due to a life event,
- On the date you end employment with CSU or,
- At the end of the plan year.
If you end coverage or employment, you have 90 days from that date to submit claims for reimbursement for expenses that incurred prior to the term date. Otherwise, you have 90 days following the end of the plan year to submit claims incurred during the plan year (March 31).