Flex Spending Account

UND FlexComp spending accounts are managed through ASIFlex.

FlexComp is a Cafeteria Plan. It allows you to save taxes on the amount you pay for eligible insurance premiums, medical expenses, and dependent care expenses.

• Employees who enroll in the PPO/Basic Health Plan are eligible to participate in both the Healthcare and Dependent Care plans.
• Employees who enroll in the High Deductible Health Plan (HDHP) are not eligible to participate in a Healthcare flexible spending account since they are automatically enrolled in a Health Savings Account (HSA). They are only eligible to enroll in the Dependent Care Plan.

About Flex Spending Accounts

The biggest advantage is the tax savings.  Flexible spending accounts are available for both dependent care and medical care costs.

• Since the dollars you contribute to the plan are deducted before income and social security tax are deducted, you will pay less taxes which means you have more money to spend or save.  However, you should be aware you are reducing the social security taxes paid which could slightly reduce your social security benefits.
• Generally, your net take home pay will increase by the amount of tax savings, which will typically be 25-39% of your contribution.  The amount of tax savings will depend on other deductions you may have and your income tax bracket.
• The IRS requires that any unused funds at the end of the grace period be forfeited.  We recommend that you be conservative in your elections.

Savings Calculator Tool

Eligible Over-the-Counter Health Care Products

No prescription needed.

Enroll in Flex Spending

• FlexComp Plan Enrollment Agreement
• FlexComp Status Change Form

You may change your election only if there is a change in your family status that causes your FlexComp plan expenses to change.  This includes marriage, divorce, death of a spouse or child, birth/adoption of a child, termination or commencement of a spouses employment, and other events that the administrator determines, will permit an election change in accordance with IRC (Internal Revenue Code) Section 125 regulations.

If there is an error on your payroll deduction, contact UND's FlexComp specialist at 701.777.4423.

FlexComp Plan Document and Information

• FlexComp Plan Document and Plan Summary
• Premium Conversion Summary Plan Description
• Premium Conversion Plan Document
• ASIFlex Wallet Card

FSA Debit Card Documentation Requirements

What information has to be on the documentation?

When follow-up documentation is required, ASIFlex will send the participant an email or letter requesting this documentation.  The requested information should include the following information: 

• The name (address, etc.) of the provider;
• The name of the participant (or participant's spouse or dependent);
• The date the service(s) was provided (not when ii was paid, when the service(s) was actually provided);
• A brief description of the service(s) (co-pay, office visit, dental exam, prescription, etc.); and
• The amount that was the responsibility of the participant (or participant's spouse or dependent)

You will be required to follow-up with substantiating documentation for all other purchases with your FSA Debit 
Card, including co-payments for your spouse's insurance plan.  When you make a purchase it is important to note that submitting credit card receipts is not acceptable, as that type of receipt does not provide all of the necessary 
information. 

AS I Flex will send the initial request for follow-up documentation within a few days of the FSA Debit Card transaction.  If the participant does not comply with the initial request, AS I Flex will make a second request in approximately three weeks.  If the participant does not comply with the second request, a third notice will be sent three weeks later stating that the FSA Debit Card has been suspended because the requested documentation was not received by ASIFlex.  Please do not send follow-up documentation to ASIFlex until you receive the email or letter request. 

Overview of Plan

1. Flexible Spending Accounts are an employee benefit that saves you money on eligible expenses for you and your family.  It is an account where you contribute money from your paycheck before taxes, incur eligible expenses and get reimbursed. It is a great way to lower your taxes and save money.  There are 2 types of Flexible Spending Accounts: Healthcare and Dependent Care.  You can enroll in just one or both of these categories.   
2. How will enrolling in a Flexible Spending Account save you money?  Here is an example:  Your annual salary is $50,000.00 and your annual FSA election is $2000.00.  Since the contribution is pre-tax, your taxable income is now $48,000 rather than $50,000.  Federal, State, Social Security and Medicare tax will be based on $48,000 so less tax is deducted by enrolling in a Flexible Spending Account.  If you choose not to enroll in an FSA, you pay out of pocket healthcare or dependent care expenses after tax has been deducted resulting in lower take-home pay.  By enrolling in an FSA, your savings is $650.00.  Your savings will vary based on your individual tax situation.  Please consult a tax professional for more information regarding your situation.  
3. Flexible Spending Accounts are administered by ASIFlex, a third-party administrator.  UND’s Plan Year is January 1st through December 31st.  Once you have enrolled, you cannot drop out of the program or change amounts unless you have a lifestyle change.  An example of a qualifying lifestyle change is a marriage, divorce, death or birth of an immediate family member or a change in employment status.   
4. The first type of flexible spending account that I will talk about is the Healthcare category.  If you or eligible family members have healthcare costs such as:  copays, deductibles or coinsurance for medical, dental or vision plans, if you purchase prescription medications, wear glasses or contacts or are planning on laser eye surgery or if you or a family member receives orthodontia treatments, enrolling in a Flexible Spending Account can save you money.  The maximum election for Healthcare expenses is set by the IRS each year.
5. When you enroll in a Healthcare FSA, you will automatically receive a Spending Account Card. Use of the card is optional.   The card is used to pay for eligible purchases directly from your account.  It gives you immediate access to your healthcare funds and can be used at the doctor, pharmacy, vision center and dentist.  It will reduce the number of paper reimbursement claims to file.
6. The second type is the dependent care category.  It allows you to use pre-tax money to pay for child or elder care expenses that you incur so you and your spouse (if married) can work or look for work or your spouse can attend school full-time.  The maximum dependent care election is $7,500.00 per household per year.
7. Enrolling in a dependent care FSA can save you money if your dependent children under 13 years of age attend daycare, before-/after-school care or a summer day camp.  It will also save you money if you provide care for a person of any age whom you claim as a dependent on your tax return and who is mentally or physically disabled.
8. How do you enroll?  You must enroll within 31 days of employment or during open enrollment.  Open enrollment is held November of each year for eligibility the following year.  Enrollment forms are located in the Office of Human Resources in Room 409, Twamley Hall or on the Office of Human Resources website.  Once you have determined your annual election, we will deduct the amount from your pay in equal amounts throughout the year.
9. If you have decided to not use the debit card, there are several ways for you to get reimbursement for eligible expenses.  You will first pay for that expense out of your pocket then either fax, mail or submit online a reimbursement request form along with the receipt for the purchase to ASIFlex.  ASIFlex will process your request and promptly reimburse you through direct deposit or by check.
10. Because FSAs have tax benefits, the IRS places guidelines on them.  Any funds left in your account at the end of the plan year cannot be rolled over to the next year.  Those funds will be forfeited so plan carefully when determining how much you want to contribute.  However, the IRS allows us to offer employees a 2 ½ month extension to help you avoid losing those funds.   
11. For more information about flexible spending accounts, go to www.spendingaccounts.info.   A list of eligible expenses and an interactive contribution and tax-savings calculator is also available to you on that website.  To speak with an FSA specialist, call 1-800-228-5762.  

Dependent Care

ASIFlex Dependent Care FSA Information

Dependent Care Flexible Spending Accounts create a tax break for dependent care expenses (typically child care or day care expenses) that enable you to work. Additionally, if you have an older dependent who lives with you at least 8 hours per day and requires someone to come into the house to assist with day-to-day living, you can claim these expenses through your Dependent Care Flexible Spending Account.  If you are married, your spouse must be working, looking for work or be a full-time student.  If you have a stay-at-home spouse, you should not enroll in the Dependent Care Flexible Spending Account. The IRS allows no more than $7,500 per household ($3,750.00 if you are married and file a separate tax return) be set-aside in the Dependent Care Flexible Spending Account in a calendar year. 

Please note that IRS regulations disallow reimbursement for services that have not yet been provided, so even if you pay in advance for your expenses, you can only claim service periods that have already occurred.  For example, if you are required to pay for all of January's child care expenses on January 1st, you cannot claim the entire month's expense until the end of January.  However, you may submit a claim every week, at the end of that week, for those expenses. 

• Eligible expenses include day care, baby-sitting, and general purpose day camps. 
• Ineligible expenses include overnight camps, care provided by a dependent, your spouse or your child under the age of 19 & care provided while you are not at work. 

Expenses may only be claimed for dependents that are under the age of 13; or for older dependents that live with you at least 8 hours each day and are incapable of self-care.  Remember that your election is fixed for the entire year unless you have a qualifying event.

Medical Expenses

ASIFlex Medical Eligible Expenses Listing

ASIFlex Medical FSA Information

The Health Care Flexible Spending Account is a tax-free account that allows you to pay for essential health care expenses that are not covered, or are partially covered, by your medical, dental and vision insurance plans.  By contributing a portion of your payroll dollars into your Flexible Spending Account on a pre-tax basis, you can save from 25% to 40% on the cost of eligible expenses you are already incurring. 

When you enroll in a Flexible Spending Account, you decide how much to contribute to each account for the entire Plan Year.  The money is then deducted from your paycheck, pre-tax (before Federal & State income taxes and FICA taxes are deducted} in equal amounts over the course of the plan year.  After you incur expenses that qualify for reimbursement, you submit claims (reimbursement requests} to ASIFlex to request tax-free withdrawals from your Flexible Spending Account to reimburse yourself for these expenses. 

The key to getting the most out of your Health Care Flexible Spending Account is to maximize your contributions based on the expenses you, or any of your tax dependents, anticipate incurring during the plan year.  To plan your annual election amount: 

1. Review the list of Eligible Expenses.
2. Review your medical expenses from last year.
3. Write down any additional eligible expenses you anticipate incurring in the coming plan year.
4. Be sure to include at least some money to cover your deductible expenditures.
5. Estimate your cost for each of these Flexible Spending Account eligible expenses.  (Don't forget 
   that your tax dependents' expenses qualify, too, even if they are on a different health insurance 
   program.)

Things to Remember about the Health Care Flexible Spending Account

• Your election amount is typically fixed for the entire plan year (unless you have a qualifying event)
• You must submit valid claims before the end of the claims run out period.  Any unclaimed remaining funds will be forfeited to your employer, so estimate your expenses carefully and set money aside accordingly.
• Expenses for any of your tax dependents are eligible for reimbursement, even if they are not on your employer's health insurance program.

Submit a Flex Spending Claim

To submit a claim, complete and mail the claim form or log into the ASI Flex website.  Once you submit a claim, turnaround time is approximately 4-5 days.  Balances and account information is found on the ASI Flex website.

By Mail

To complete a claim form by mail, attach the required itemized billings or receipts and send to ASIFlex:

ASIFLEX GENERAL FSA CLAIM FORM

ASI
PO Box 6044
Columbia, MO 65205-6044

Online

When submitting claims online, be sure to save your receipts in case ASIFlex needs further substantiation. Contact ASIFlex directly at 1.800.659.3035 with questions.

ASIFLEX Login

Reimbursement Documentation

• When submitting medical documentation, it is acceptable to white or black out information on your statement of benefits.  Only information that is needed for audit purposes is the name of the patient, date of service and charges.
• You may submit up to your annual limit at any time thought the plan year.  You can submit claims for more than has been deducted from your paycheck so far this Plan Year.
• You may submit claims as frequently or as infrequently as you wish, just as long as the dates-of-service have occurred. Whatever works best for you.
• You may submit photo copies instead of original receipts.
• Your reimbursement from your dependent care account will not exceed the amount of your payroll deduction to date.

Plan Year

Flexible spending Claims will be paid in the order in which they are received.  Eligible expenses incurred during the grace period and approved for reimbursement will be paid first from available amounts that are remaining in the previous Plan Year and then from amounts that are available for the current Plan Year.

Grace Period

The grace period is from January 1 - March 15 in which expenses can be incurred in order to use up and balance from the prior Plan Year.  Grace period timing applies to both medical and dependent care expenses.

The last day to submit vouchers for expenses that were incurred in the plan year or during the grace peroid is April 30 of the year following the plan year.

IRS Publications

Medical Expenses

This Publication is intended to assist taxpayers in determining tax deductions, not which expenses are reimbursable under a health care flex account. Some of the statements in the Publication do not apply to these accounts.  For example, it states a tax deduction is based on when you pay for it.  A health care reimbursement account, an expense must be incurred during a Period of Coverage to be eligible for reimbursement for that Period of Coverage, regardless of when paid for. Insurance premiums and certain long-term care expenses - are not reimbursed from these accounts.

IRS Pub 502 FlexComp Medical

Dependent Care

This form is a guide only and is subject to change. Receipts must "clearly" state what over-the-counter medications were purchased to be reimbursed from FSA.

IRS Pub 503 FlexComp Dependent Care

Cafeteria Plans

Section 125 is part of the Internal Revenue Code that allows for Flexible Benefits Programs (Cafeteria Plans).

Flex Benefits-Section 125

The Flexible Benefits Program is an employee benefit program designed to take advantage of provisions contained in Section 125 of the Internal Revenue Code.  The plan helps you save money by con­verting group insurance premiums, unreimbursed medical expenses and dependent care expenses from an after-tax to a before-tax basis. 

Because you reduce your taxable income by using The Flexible Ben­efits Program, you will pay lower Federal, State and Social Security taxes, increasing your take-home pay.

• What is Section 125? 
  Section 125 is part of the Internal Revenue Code that allows for Flexible Benefits Programs (Cafeteria Plans).
• What are the advantages? 
  The advantages of the plan are to save you money on taxes. 
  • Increases take-home pay
  • Reduces Federal and State Income Tax
  • Reduces Social Security Tax

What is the Flexible Benefits Program?

The Flexible Benefits Program is a separate written benefit plan maintained by an em­ployer for the benefit of employees under which all eligible employees have the opportu­nity to select one or all of the following three options: 

1. Premium Conversion - amounts you pay for insurance premiums are set aside in before-­tax dollars for the following Group Sponsored Insurance Programs:
   • Health
   • Dental
   • Vision
   • Prescription Drug
   • Term Life Insurance up to $50,000
   • Long-Term Disability
   • Short-Term Disability
   • Indemnity Plans (Hospital/Cancer)
2. Medical Spending Account - allows you to set aside before-tax dollars to pay for medical expenses which are not paid by insurance or the employer.  These expenses include medical, vision and dental expenses normally allowed by the IRS as deductions.  IRS Publication 502 lists the eligible medical expenses.
3. Dependent Care Spending Account - allows you to set aside before-tax dollars to pay for day care expenses for children under the age of 13 or for adult day care for a disabled spouse or other disabled dependent. The usual IRS rules about what constitutes eligible dependent care expenses apply.  A maximum of $5,000 can be set aside in a Dependent Care Spending Account for each plan year for married couples filing joint tax returns and single head of household tax returns.

The amount you designate for the Medical or Dependent Care Spending Account should be about the same amount you would normally pay for services out of your take-home pay and for which you are not reimbursed by insurance.  Contributions to a Medical or Dependent Care Spending Account are made automatically from your paycheck each pay period before income taxes are deducted from your gross salary.  Once money is set aside in a Spending Account, it is not subject to Federal, State or Social Security Taxes. 

*NOTE: Benefit payments on long-term and short-term disability will be taxable to the recipient if the premiums are paid in before­ tax dollars. 

How Taxable Savings Works

The following is an example of what you may save by participating in premium conversion.  Let's assume you are married with two children and claim four exemptions.  Your monthly salary is $1,300 and out of this salary, pay $100 in insurance premiums each month.

Without Premium Conversion

With Premium Conversion

With premium conversion, there was an increase in take-home pay of $21.33 a month or $255.96 per year. 
The savings are increased with the use of flexible spending accounts for dependent care expenses and unreimbursed medical expenses. 

In the next example, let's say that in addition to the $100 paid in insurance premiums each month, you also spend $240 per month on child care expenses and $40 a month on out­-of-pocket medical expenses. 

Without Flexible Benefits

With Flexible Benefits

Using both premium conversion and flexible spending accounts, there is an increase in take-home pay of $78.09 per month or $937.08 per year. 

Exactly how does the FSA work? 

With an FSA, you instruct your employer to set aside a specific portion of your salary into one or both flexible spending accounts: 

  1. Dependent care spending account
  2. Medical spending account

The amount you designate for your FSA should be about the same amount you would normally pay for such services out of your take-home pay and for which you are not reimbursed by insurance. 

Then what happens?  Deposits will be made automatically from your paycheck each pay period before income taxes are deducted from your gross salary.  Once money is set aside into your FSA, it's not subject to federal or state income tax or FICA taxes.  Since your taxable income is lower, you'll pay fewer taxes.  The difference is extra income for you to spend any way you like. 

How do I decide whether or not to participate? 

Prior to the start of the flex plan year you will have an opportunity to meet with a Flexible Benefits Enroller to discuss the program and complete a Flexible Benefits enrollment form.

What is a flex plan year? 

The plan year is a 12-month period set by your employer that begins with the effective date of the plan. 

Since I am saving Social Security taxes by participating in the program, will Social Security benefit payments to me upon retirement be reduced? 

Yes, personal insurance plans, retirement plans and savings plans can offset any reduction. 

How do I know how much to set aside into my FSA? 

Our confidential employee worksheet helps you.  Basically, you should estimate how much you would normally pay for the designated expenses out of after-tax income and desig­nate that amount for your FSA.  Be conserva­tive, though.  The IRS has a "use it or lose it" rule. 

"Use it or lose it" - What does that mean? 

It means that if there's anything left in your account at the end of the plan year, you will forfeit that amount.  You can carry balances from your account forward from month to month, but you have to incur expenses for all your designated dollars by the end of the plan year.  That's why it pays to be conservative about variable or unknown expenses.  Keep in mind that funds allocated to one account cannot be moved to another account (for instance, you can't use funds from a depen­dent care account to pay for health care expenses). 

How do I get my money out of my FSA?

When your employer deducts the money from your paycheck, it is placed in a special account.  That account is used to reimburse you for your expenses.  Instructions for requesting reimbursement are included 
later on in this information packet. 

Can I drop out of the program during the plan year, if I decide I don't like it?

Generally no. If an employee participates in the flexible benefits program, the benefit elections must remain the same until plan year renewal unless the participant experiences a lifestyle change. 

What are considered "Lifestyle" Changes? 

Changes in employee elections are not permit­ted during the plan year unless there is a change due to one or more of the following: 

• The employee's marriage
• The employee's divorce
• Death of an employee's spouse or child
•  Birth or adoption of a child by the employee
• Termination or commencement of employ­ment by the employee's spouse
• The employee or employee's spouse switching from part-time to full-time or from full-time to part-time employment
• The employee or the employee's spouse taking an unpaid leave of absence
• Significant changes in the health coverage of the employee or the employee's spouse attributable to the spouse's employment.

A Lifestyle/Status Change Form must be completed within 30 days of the Lifestyle/Status Change. 

When are medical and dependent care expenses "incurred?" 

Expenses are treated as incurred when the participant is provided with the medical care or the dependent care that gives rise to the expense and not when the participant is formally billed, charged for or pays for the expense. Expenses must have been incurred during the flex plan year in order to be reimbursed.  The participant has 90 days from the end of the flex plan year to request reimbursement for the incurred expenses during that plan year. 

What constitutes eligible expenses? 

The following is a partial list of eligible ex­penses from the Flexible Spending Accounts.  Consult IRS Publications 502 (Medical) and 503 (Dependent Care) or your tax advisor for further information concerning eligible expenses. 

Insurance premiums are not eligible for reimbursement from flexible spending accounts.