Flexible & Dependent Care Spending Accounts
The IRS recently issued temporary relief in response to the Covid-19 National Emergency for participants in Health Care Flexible Spending Accounts (FSAs) and Dependent Care Flexible Spending Accounts. As a result of this, LSU will allow employees to enroll in a Healthcare and/or Dependent Care FSA or make mid-year changes to their current account(s).
Mid-Year Election Changes
- Through August 31, 2020, employees may newly elect, change or revoke an election to a Healthcare Flexible
Spending Account (FSA) or Dependent Care Flexible Spending Account (FSA) in the middle
of the plan year without having experienced an IRS-approved qualifying event. All
changes made will be prospective. No retroactive changes, including refunds, will
- Elections – employees can newly elect coverage through August 31, 2020. Elections will begin the first of the following month after documentation has been submitted.
- Changes – employees can increase OR decrease contributions through August 31, 2020. Decreases cannot exceed the amount of Year-to-Date (YTD) contributions nor exceed expenses incurred for the FSA. Decreasing the annual election allows participants to remain active in the plan and are able to continue to incur expenses through the end of the plan year.
- Revocations – employees can revoke/cancel their current election through August 31, 2020, provided the FSA expenditures do not exceed the amount of the YTD contributions. Likewise, dependent care FSA decreases are limited to the amount of the YTD contributions. By revoking your election, participation in the plan would be terminated the date of your request and you cannot incur expenses after the revocation date.
Deadlines for the 2020 Plan Year remain unchanged. The 2020 Plan Year will end on December 31, 2020 with the allowed Grace Period from January 1 – March 15, 2021. All claims must be submitted by April 15, 2021.
LSU continues to partner with Diversified Benefit Services, Inc. (DBS) to offer employees Flexible Spending Accounts (FSA). This program will allow employees to put tax-sheltered dollars in an account for out of pocket medical and/or dependent care expenses that are incurred from January 1 through March 15 of the following year for the employee and any eligible dependents.
This benefit provides the opportunity to set aside tax-exempt dollars for out-of-pocket health care or dependent care expenses incurred by you and/or your eligible dependents. LSU offers two different Plans through our Tax-Saver Flexible Benefits that allow you to reduce your taxable income, the Heath Care Reimbursement Plan and the Dependent Care Reimbursement Plan.
Any active employee of LSU is eligible for benefits provided the following:
- Employed at 75% of full-time effort per pay period (avg. of 30 hours/week) or greater;
- Appointed for a duration of at least one semester or 120 days or greater
**Please note - Employees who participate in the Pelican HSA 775 option administered through BlueCross BlueShield are not eligible to participate in the Flexible Spending Account Program.
Health Care Flexible Spending Account
- The minimum contribution to participate in this Program is $100.00.
- The maximum contribution to participate in this Program is $2,700 for 2020.
View a detailed list of health care expenses that may or may not qualify for reimbursement.
How to Calculate Expenses
Use this worksheet to estimate your un-reimbursed health care expenses. IRS regulations state that if all the money in the account is not used by the end of the Plan Year, the remaining balance must be forfeited (known as the “Use-it-or-Lose-it rule”).
Dependent Care Flexible Spending Account
You may receive tax-exempt reimbursements for the care of certain individuals in your household, which includes your dependent children age 12 or younger and any other individuals who reside with you and who rely on your for at least half of their support or are physically or mentally unable to care for themselves.
- The minimum contribution to participate in this Program is $100.00 per Plan Year.
- The maximum contribution to participate in this Program is $5,000 or $2,500 if married and filing separately, or such other amount as may be established by law from time to time.
Eligible Dependent Care Account expenses include:
- Day-care costs
- Schooling costs, not including food and clothing, for either private or public schools, for children not yet in kindergarten
- If expenses for food and clothing cannot be separated from the total cost of child care, then they are eligible expenses
- Before/after-school care
- Babysitting and licensed day-care center costs
- Housekeeping services in your home that include day care
- Elder care if dependent is claimed on your tax return
- Costs of transportation, overnight camping, nursing care facilities, and the schooling costs of children in the first grade or above are generally ineligible expenses
Participation in Dependent Care Flexible Spending Accounts:
- If you are married, both you and your spouse must be employed in order to use this Plan.
- Your contribution may not exceed the lesser of your income or the income of your spouse.
- If you are married and file separate returns, your maximum contribution is $2,500.
- If you are married and file a joint return, your maximum contribution is $5,000.
Using the Money in Your Flexible Spending Account
You must determine an annual target amount (maximum limits apply) to be withheld by forecasting your out-of-pocket health care and/or dependent care expenses for the entire plan year (January 1 - December 31). If you enroll in the FSA, you will be provided with a Debit Card that is pre-loaded with your elected amount to use throughout the Plan Year. Dependent Care participants must file manual claims.
Your annual target is then deducted from your paycheck in equal installments. The deduction is made before taxes are computed, thus making the spending account dollars tax-free. There is no tax liability on the money put into either the health care or dependent care spending account or on the money reimbursed through these spending accounts.
There is a $5.00 monthly administrative fee for 12 month employees and $6.67 for 9 month employees.
To access the money in your account, you can either use your FSA Debit Card at the time of service, or you can file a claim form requesting reimbursement for eligible, out-of-pocket expenses. Please be aware that reimbursement checks issued from DBS have a 180-day expiration date.
Reimbursements for Dependent Care expenses can be accessed by mailing/faxing claim forms to DBS, submitting claim information online or submitting via DBS’ mobile phone application.
You can only make mid-year changes to these accounts if you experience a qualifying event as defined by the IRS.
Note: Remember, you must re-enroll in the Flexible Spending Account (FSA) each year during Annual Enrollment. Your FSA enrollment will not automatically carry over from year to year. If you choose not to re-enroll during annual enrollment, your account will automatically CANCEL on December 31.
There will be a grace period immediately following the end of the Plan Year for both Health Care and Dependent Care Spending Accounts. This extension will provide participants additional time to incur expenses for reimbursement from the previous year’s account. The grace period will be available after the end of the Plan Year from January 1st through March 15th. To use previous year funds you must pay for the services then file an FSA claim.
Filing FSA Claims
Filing a claim is as easy as completing a claim form and attaching a receipt. Claims can also be submitted or substantiated online through the website or mobile app. Directions are included below. Timely filing of a claim will result in a timely reimbursement. All claims incurred during the grace period must be filed no later than April 15th.
To file substantiations online:
- Login to your online account at DBSbenefits.com
- Select "claims"
- Select "debit card substantiation" > submit
- Attach an image with supporting documentation (.pdf or jpg.)
- Upload file
To file substantiations using the Mobile App:
- Open the Diversified Benefit Services, Inc. Mobile App
- Login using your online account username/password
- Select "debit card substantiation"
- Attach an image (.pdf or .jpg)
- Click "next"
- Review to ensure documentation is clear and legible
- Click "submit"
Enrollment and Effective Date of Coverage
Timely Applicant: If you enroll within your first 30 days of full-time employment, your coverage will be effective the first of the month following your first full calendar month of employment.
Existing Employee: Employees may enroll during annual enrollment which is within the month of October. Benefits will be effective January 1.
If you experience a qualifying life event, you may enroll by completing a "Benefit Change" in Workday within 30 days of the event. For more information on how to complete the Benefit Change, please reach out to your HR representative for assistance.
To cancel your Flexible Spending Account during the plan year, it must be due to a qualifying event. Please reach out to your HR representative for assistance.
If you leave LSU employment, you can continue to submit claims. However, you may only submit claims for expenses incurred on or before the last day of your employment. Claims must be filed within 30 days of the end of the month in which you terminate or within 30 days following the end of the plan year, whichever is sooner.