Flex Spending Account for Employees

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.

Flex Spending Plans

ASIFlex Medical Eligible Expenses Listing

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 and 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.

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 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 daycare, babysitting, 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 and care provided while you are not at work. 

Expenses may only be claimed for dependents who 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.

Enroll in Flex Spending

You must enroll within 31 days of employment or during open enrollment. Open enrollment is held late October through early November of each year for eligibility the following year. Enrollment forms are located in the Office of Human Resources in Room 403, Twamley Hall. Once you have determined your annual election, we will deduct the amount from your pay in equal amounts throughout the year.

Change Your Election

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 spouse's 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.

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

  • 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 throughout 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 photocopies instead of original receipts.
  • Your reimbursement from your dependent care account will not exceed the amount of your payroll deduction to date.

UND's plan year is January 1 through December 31. 

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 period is April 30 of the year following the plan year.

Flex Spending Account Advantages

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

Flexible Spending Accounts are administered by ASIFlex, a third-party administrator. UND’s Plan Year is January 1-December 31. 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.

  • 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.

Documents & Tools

FAQs

How will enrolling in a Flexible Spending Account save me money?

Here is an example: Your annual salary is $50,000 and your annual FSA election is $2,000. 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. Your savings will vary based on your individual tax situation. Please consult a tax professional for more information regarding your situation.

What types of expenses can be paid through a FSA?

There are two types of Flexible Spending Accounts: Healthcare and Dependent Care. You can enroll in just one or both of these categories.

Healthcare

The first type of flexible spending account 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 orthodontic treatments, enrolling in a Flexible Spending Account can save you money. The maximum election for Healthcare expenses is set by the IRS each year.

Dependent Care

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 per household per year.

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.

What happens to unused FSA funds at the end of the plan year?

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.   

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 1.800.659.3035.

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.

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 grace period, 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 grace period. 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 until April 30th of the following year to request reimbursement for the incurred expenses during that plan year.

What constitutes eligible expenses? 

A list of eligible ex­penses can be found at ASIFlex website. 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.

IRS Publications

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

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

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.

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

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.

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.

Item Dollar Amount
Monthly salary $1,300
Less: Federal Withholding Taxes $43
State Tax (14% of Federal) $6.02
Social Security Tax $99.45 
Take-home pay $1,151.53
Less: Employee's Insurance Premium $100.00
Net Take-home pay $1,051.53

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.

Item Dollar Amount
Monthly Salary $1,300
Less: Employee's Insurance Premium $100
New Salary For Withholding Taxes $1,200
Less: Federal Withholding Tax $31
State Tax (14% of Federal) $4.34
Social Security Tax $91.80
New Net Take-home pay $1,072.86

Item Dollar Amount
Monthly salary $1,300
Less: Federal Income Tax $43
State Tax (14% of Federal) 6.02
Social Security Tax $99.45
Take-home pay $1,151.53
Less: Insurance Premiums $100
Dependent Care Expenses $240
Medical Expenses $40
Net Take-home pay $771.53

Item Dollar Amount
Monthly Salary $1,300
Less: Insurance Premiums $100
Dependent Care Expenses $240
Medical Expenses $40
Adjusted Taxable Salary $920
Less: Federal Income Tax $0.00
State Tax (14% of Federal) $0.00
Social Security Tax $70.38
Adjusted Net Take-home pay $849.62

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. 

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