Support Staff Policies & Procedures

Flexible Spending Accounts Policy & Procedure

(Revised 11/16)

Policy

The University provides access to Flexible Spending Accounts for eligible employees.

Eligibility: Regular full-time and part-time (50% - 89.9%) faculty, academic staff and University support staff with appointments of nine months or more.

Effective date: Coverage will be effective the first of the month following the month of enrollment (e.g., enroll in the health care spending account in June, services must occur after July 1 for reimbursement.

Summary of benefits: Flexible Spending Accounts (FSA) provide tax-free reimbursement to employees for health care and dependent care expenses that are not reimbursed by any other insurance or reimbursement program.  IRS regulations require any money not used for eligible expenses in a plan (calendar) year, be forfeited.

Health Flexible Spending Account (Health FSA)

A Health Flexible Spending Account provides employees the opportunity to pay for medically related expenses, on a pre-tax basis, that are not reimbursed by an insurance plan. The amount you contribute and the amount you are reimbursed from your Health FSA are income tax-free. The annual maximum reimbursement for Health FSA is $2,550 per eligible employee and $5,000 per household when both the employee and the spouse are MSU employees.

Eligible expenses may include the following examples:

Reimbursements can be made only for services that are incurred during the plan (calendar) year and during the grace period of up until April 15th of the following year. Services must occur after the first of the month following the month of enrollment (ex. enroll in Health FSA in June, services must occur after July 1 for reimbursement). A complete list of Health FSA eligible/ineligible expenses is available online or in the FSA brochure.

To determine how much money to set aside from your paycheck for your Health FSA, estimate annual medically related expenses and divide this amount by the number of pay periods for the plan (calendar) year. This amount you elect to deposit into your Health FSA accumulates tax free in your account.

Each time you incur a qualified health care expense at a health care provider or pharmacy, you may present your Benny Card (to any provider that accepts MasterCard), swipe your Benny Card through the card reader and select credit. The amount of your qualified purchases will be deducted automatically from your Health FSA.

To file a claim for reimbursement from your account, complete and submit an Health FSA Reimbursement Claim Form along with an insurance explanation of benefits (EOB) or an itemized bill for services not covered by the insurance plan.

Dependent Care Flexible Spending Account (Dependent Care FSA)

A Dependent Care Flexible Spending Account provides employees the opportunity to pay for dependent care expenses for a child, disabled spouse or dependent parent, on a pre-tax basis. The amount you contribute and the amount you are reimbursed from your Dependent Care FSA are income tax-free. You may contribute up to $5,000 per household. If you are married and file a separate income tax return, contributions cannot exceed $2500 for each of you.

Eligible expenses must be work related and include the following example:

According to IRS regulations, the following are examples of expenses that are non-reimbursable:

  • Payments made to anyone you claim as a tax dependent
  • Payments made to your children under age 19 who provide care to one of your dependents
  • Overnight summer camp expenses
  • Schooling for children in kindergarten or higher

Reimbursements can be made only for dependent care services that are provided during the plan (calendar) year and during the grace period of up until April 15th of the following year. A complete list of Dependent Care FSA eligible/ineligible expenses is available online or in the FSA brochure.

A qualifying dependent is defined as a child under age 13 who is your IRS tax dependent; your spouse who is physically or mentally disabled and unable to care for herself or himself; or your IRS tax dependent, such as an elderly parent or child over the age of 13, who is physically or mentally disabled and unable to care for herself or himself. According to IRS definition, a disabled person is one who is not physically or mentally able to dress, clean, or feed himself or herself or requires constant attention to prevent self-injury.

To file a claim for reimbursement from your account, complete and submit a Dependent Care FSA Reimbursement Claim Form along with a receipt from your day-care provider.

Please note that if a reimbursement request exceeds the account balance, reimbursement will only be up to the balance available in the account.

Changes in FSA Elections: IRS regulations require any money not used for eligible expenses in a plan (calendar) year, be forfeited. Once you enroll in an FSA, participation must continue unchanged until the end of the plan (calendar) year unless you have a qualifying life event (marriage, divorce, death, birth/adoption or change in employment). An adjustment in your election must be consistent with the change in status, i.e. if your employment status goes down, then your election would too. Any adjustment to your election must occur within 31 days of the occurrence. 

Refer questions to:

MSU Human Resources (telephone 517-353-4434 or e-mail solutionscenter@hr.msu.edu)

 Revision history - 10/1/2015  removed references to Meritain.

11/8/2016 - updated annual max. reimbursement for 2017 and added grace period for reimbursement

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