Office of Human Resources - Benefits Open Enrollment

Flexible Spending Accounts Frequently Asked Questions

Election and Enrollment Info | Health Care FSA Specifics | Limited Health FSA Specifics
Dependent Care FSA Specifics | Reimbursement Claim Info | The Benny Card

What is a Flexible Spending Account (FSA)?
ASU offers three types of flexible spending accounts.  All three account types reduce your taxable income while saving money to pay for eligible expenses.  Flexible spending accounts are also known as Section 125 or Cafeteria Plans.  Flexible spending accounts require re-enrollment every plan year.

  • A Health Care FSA allows you to pay for essential health care expenses for you, your spouse and your qualified tax dependents that are not covered, or are partially covered, by your medical, dental and vision insurance plans.  It works in conjunction with any health plan and covers eligible health care expenses, such as co-payments, deductibles, glasses and contact lenses, and some over-the-counter medications.  The entire annual election amount is available for reimbursement as of January 1 for eligible expenses incurred during the Plan Year. 
  • A Limited Health FSA is available ONLY to HealthFund HSA participants to pay for eligible uninsured vision and dental expenses.  The entire annual election amount is available for reimbursement as of January 1 for eligible expenses incurred during the Plan Year.  NOTE:  The IRS will not allow the submission of eligible uninsured expenses to both an HSA and a Health Care FSA in the same plan year. 
  • A Dependent Care FSA allows you to pay for employment-related child and elder day care expenses.  Unlike the Health Care and Limited Health FSAs, only the current balance (contributions less reimbursements) is available for reimbursement.
    IMPORTANT NOTE:  This plan is NOT used to pay for your dependent’s eligible healthcare expenses.

What is the FSA Plan Year?
The FSA Plan Year begins January 1 and ends December 31.  To be considered eligible for reimbursement, eligible expenses must be incurred during the FSA Plan Year.  Under IRS regulations, participation in an FSA requires that a new election be made every Plan Year.

How does an FSA work?  What are the benefits of participating in an FSA?

  • You decide how much to contribute to each account for the entire Plan Year, January 1 through December 31.  This is called an annual election. 
  • To assist you in estimating your eligible expenses, use ASIFlex’s tax savings calculator.
  • Your annual election is divided by the number of scheduled pay days in the Plan Year, so that an equal amount is withheld from each paycheck. 
  • Called a “pre-tax” deduction, it is withheld from your paycheck before FICA, federal and state income taxes are calculated.  FSA deductions reduce your taxable income as reported on your W-2 and income tax returns. Your tax savings will vary depending on your income tax bracket and out-of-pocket expenses. 
  • When you incur eligible expenses, you submit claim forms with supporting documentation to ASIFlex to request tax-free withdrawals from your FSA to reimburse yourself for these expenses.  Upon verification of eligibility, ASIFlex will mail you a check or if you enroll for direct deposit, they will transfer the reimbursed amount to your designated checking or savings account. 
    Go to REIMBURSEMENT INFORMATION for more info.
  • Some health care expenses can be paid at the point of service with an ASI-issued debit card called The Benny Card. 
    Get more info about the THE BENNY CARD.

What does “incurred expense” mean?
Expenses are considered incurred on the date health or child care is rendered.  Expenses must be incurred in the Plan Year for which you are requesting reimbursement.

How can I find out what my FSA available balance is?
You may view your available balance and account activity at www.asiflex.com by clicking on the Account Detail button.  In order to access your account, you must use your Flex PIN which is sent to you with your Confirmation of Enrollment statement and included on all periodic statements.  If you do not have your Flex PIN, call ASIFlex at 800.659.3035 to retrieve your access code.  You also can call ASI to obtain your available balance. 

What happens if my status changes and I become ineligible to participate, or if I terminate employment?
Your deductions will cease.  Your last deduction will be withheld from the paycheck issued for the pay period in which you became ineligible.  Claims for eligible expenses incurred during the Plan Year must be submitted by April 30, the end of the 120-day grace period following the end of the Plan Year.  Note:  Not applicable to 2009 claims; the deadline remains March 30, 2010.

If you were enrolled in either the Health Care FSA or the Limited Health FSA and you have a balance in your account, your FSA is a COBRA eligible benefit.  You will have two options when you leave the University or lose eligibility:

  • You may decline COBRA. If you do, you may continue to use funds for any expense incurred prior to your termination or ineligibility date.
  • You may elect COBRA. This option requires you to pay the monthly deduction on an after-tax basis. By doing this, you are entitled to send in claims for reimbursement of expenses incurred after your termination date until one of the following occurs:
    • The plan year ends,
    • Funds are exhausted or
    • You cease to continue the COBRA benefit.

If you were enrolled in the Dependent Care FSA, you may submit claims for qualified dependent care expenses incurred before your status change or termination effective date in order to exhaust your positive cash balance.

Who do I contact if I have questions about eligible expenses, claims and/or my account?
ASIFlex Customer Service
800.659.3035
asi@asiflex.com
www.asiflex.com

READ THE FAQs: www.asiflex.com/faq/faq.htm

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ELECTION AND ENROLLMENT INFO

Who is eligible to elect an FSA?
Benefits-eligible employees who are regularly scheduled to work 20 or more hours per week can participate in the FSA plans.  Employees who participate in the HealthFund HSA can participate in the Limited Health FSA and/or Dependent Care FSA plans, but are restricted from participating in the Health Care FSA plan. 

How do I determine how much to contribute to my FSA? 
You must be able to estimate what eligible expenses you will incur during the Plan Year. 

Are there any limitations on the amount I can contribute to my FSA?
For calendar year 2010, you can contribute between $26 and $5,000 to your Health Care FSA or Limited Health FSA, and between $26 and $5,000 (between $26 and $2,500 if married and not filing a joint tax return) to your Dependent Care FSA.

If I participated in an FSA this year, why do I have to make a new election for next year? 
IRS regulations that govern FSA plans require that employees make new FSA elections each year.  There is no carryover from one FSA Plan Year to another.

What are the effective dates for FSA plans?
At open enrollment, FSA plans are effective on January 1.  All other elections (i.e., newly-eligible, qualified life events, etc.) will be effective on the first day of the pay period following a completed enrollment, as long as the enrollment is completed within 31 days of the event date. 

How do I enroll?

  • Open Enrollment
    Go to My ASU > Login using your ASURITE ID and password > My Info > My Compensation > Benefits > Open Enrollment.
  • New Hires 
    From approximately August through December each year, enroll by completing and submitting the applicable Benefits Enrollment Packet.  From approximately January through July each year, enroll online by going to My ASU > Login using your ASURITE ID and password > My Info > My Compensation > Benefits > Benefits Enrollment.

Are there any restrictions or penalties with an FSA? 
Under the IRS regulations, an FSA plan is USE IT OR LOSE IT! 

  • If you have unused funds remaining in your FSA account at the end of the FSA Plan Year, those funds will be forfeited by you in accordance with federal regulations that govern this plan. 
  • It’s imperative that you carefully estimate your eligible expenses for the Plan Year to avoid forfeiting unused funds, and that you submit claims for eligible expense reimbursement by April 30, the end of the 120-day grace period. 
    NOTE:  Not applicable to 2009 claims; the deadline remains March 30, 2010.

Can I change my FSA election during the plan year?
Generally no.  You may only change your election if you have a qualified life event.  Your change must be consistent with your qualified life event.  Contact ASU HR at HRESC@asu.edu.

Can I transfer money between my FSA accounts?
No.  Transfers between FSA accounts are prohibited under the IRS regulations that govern FSA plans.

How will salary reductions affect my Social Security Retirement Benefits or Earned Income Tax Credits?
Your wages reported to the Social Security Administration will be reduced, and therefore your expected Social Security retirement may also be reduced. This reduction is minimal.  If the tax savings are used for savings or retirement, they will more than offset the loss. Individuals who can claim the Earned Income Tax Credit (EITC) should consider the impact their dependent care expenses would have on their EITC eligibility.

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HEALTHCARE FSA SPECIFICS

Whose healthcare expenses are eligible for reimbursement?
You, your spouse (if filing a joint tax return), and your qualified child or qualified relative (refer to www.asiflex.com/faq/qualifing-dependent.htm).  You may also claim dental and vision expenses you incur and pay to service providers of a child for whom you don’t get the tax exemption due to a divorce decree, as long as one parent claims the child as a tax dependent. 

What health care expenses are generally covered (eligible for reimbursement)?
Deductibles, copayments and coinsurance for medical, dental and vision; chiropractic care; dental expenses; eyeglasses, contact lenses and contact lens supplies; prescription drugs; over-the-counter medications if used to treat a medical condition. 
Get a list of eligible expenses: www.asiflex.com/Eligible%20Expenses/eligibleexpenses.htm.

What health care expenses are generally not covered (ineligible for reimbursement)?
Insurance premiums, cosmetic procedures (teeth whitening, veneers, face lifts, cosmetic surgery, etc.), toiletries, long-term care expenses, health club dues, massages, hair transplants, vitamins, herbs, natural supplements, and any expenses for which you receive benefits from another insurance plan.  Note:  If you have been diagnosed with a medical condition that necessitates the purchase of these items and you would not have purchased them if it were not for the medical condition, then they may qualify for your Health Care FSA.  Contact ASIFlex for clarification.

Can I claim transportation expenses under my Health Care FSA? 
Yes, transportation that is primarily for and essential to obtaining medical care:

  • Bus, taxi, train or plane fares or ambulance services,
  • Transportation expenses of a parent who must travel with a child who needs medical care,
  • Transportation expenses of a nurse or other person who can give injections, medications and other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and
  • Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as part of treatment.

For automobile travel expenses you can use a standard rate of $.19 per mile for services provided from Jan. 1 to June 30, 2008, $.27 per mile for services provided from July 1 to Dec. 31, 2008 and $.24 per mile for services provided from Jan. 1, 2009 forward. Mileage is reimbursable for use of a car for medical reasons. You can also include parking fees and tolls. You can add these fees and tolls to your expenses whether claiming actual car expenses or using the standard mileage rate.

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LIMITED HEALTH FSA SPECIFICS (ONLY FOR HealthFund HSA PARTICIPANTS)

What expenses are eligible for reimbursement?
Eligible vision and dental expenses only. 
Get a list of eligible vision and dental expenses: www.asiflex.com/Eligible%20Expenses/eligibleexpenses.htm.

What dental and vision expenses are generally not covered (ineligible for reimbursement)?
Insurance premiums, cosmetic procedures (teeth whitening, veneers, etc.), toiletries, etc. and any expenses for which you receive benefits from another insurance plan.  Note:  If you have been diagnosed with a condition that necessitates the purchase of items you would not have purchased if it were not for a dental or vision condition, they may qualify for your Limited Health FSA.  Contact ASIFlex for clarification.

Whose dental and vision expenses are eligible for reimbursement?
You, your spouse (if filing a joint tax return), and your qualified child or qualified relative (refer to www.asiflex.com/faq/qualifing-dependent.htm).  You may also claim dental and vision expenses you incur and pay to service providers of a child for whom you don’t get the tax exemption due to a divorce decree, as long as one parent claims the child as a tax dependent. 

Why can’t I participate in the Health Care FSA if I am enrolled in the HSA?
The IRS will not allow the submission of eligible uninsured expenses to both an HSA and a Healthcare FSA in the same calendar year.  The Limited Health FSA was added so that HSA participants could save tax dollars for reimbursement of their own, their spouse’s and their eligible tax dependent’s eligible dental and vision expenses.

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DEPENDENT CARE FSA SPECIFICS

Whose dependent care expenses are covered (eligible for reimbursement)?

  • Your qualifying child under the age of 13 who shares the same residence with you, or
  • Your spouse or qualifying child or qualifying relative who is physically or mentally unable to care for him/herself who shares the same residence with you and has income less than the Federal exemption amount.

Visit http://www.asiflex.com/faq/faq.htm for more information.

If my child turns 13 during the Plan Year, may I use the dependent care FSA for the entire year?
No, only the expenses you incurred before your dependent child reached the age of 13 are eligible for reimbursement.

What dependent care expenses are covered (eligible for reimbursement)?

  • Typically child care, babysitting, day care or general purpose day camp expenses that are employment-related.  
  • Employment-related expenses are those that are incurred to enable you to work.  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 FSA.

What dependent care expenses are not covered (not eligible for reimbursement)?

  • Care provided by a dependent, your spouse or your child under the age of 19 or care provided while you are not at work is not covered. 
  • Kindergarten, food, transportation, activity fees, overnight camps, summer school tuition and sport camps are generally excluded. 
  • NOTE:  Your dependent’s health care expenses are not covered under the Dependent Care FSA.  They are covered under the Health Care FSA or the Limited Health FSA.

Can I use the Dependent Care FSA if my provider is not reporting the fees to the IRS? 
No.  Your day care provider must report fees paid for services to the IRS.

Do I have to complete IRS Form 2441 if I am using the dependent care FSA through my employer in lieu of the child care tax credit on my federal tax return?
Yes. Instead of completing Part 1 and Part 2, you would complete Part 1 and Part 3 of the Form 2441.

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REIMBURSEMENT CLAIM INFO

How do I get reimbursed for my eligible FSA expenses?
ASI, Inc. processes all FSA claims for Arizona State University employees. 
Download an ASI Claim Form: www.asiflex.com 
Fax or mail the completed form with supporting documentation to ASIFlex.

What is supporting documentation?
Each item claimed must be supported by a statement of services from an independent provider.  The insurance explanation of benefits (EOB), for items covered by insurance, may also be used since a statement of services has already been submitted to the insurance company for determination of service date and whether it was a qualifying expense.  Documentation must contain the following information in order for payment to be issued:

  • the provider of services;
  • the person obtaining the care;
  • the date(s) of service;
  • the amount charged for the services; and
  • a general description of the services provided.

What is the time period for submitting claims for reimbursement?
Claims can be submitted as soon as the eligible expense is incurred. 

  • For 2009 Plan Year participants, claims must be submitted by March 31, 2010, the end of the 90-day grace period. 
  • Starting with 2010 Plan Year participants, claims must be submitted by April 30, the end of the 120-day grace period following the end of the Plan Year. 

How often does ASIFlex pay claims?
ASIFlex releases payments each banking day (excluding major holidays). 

Is direct deposit available?
Yes, to a checking or savings account.  ASIFlex will include a direct deposit form in the welcome packet you will receive after enrolling. 
Download a Direct Deposit Form: www.asiflex.com/Forms/Claim%20Forms.htm.

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THE BENNY CARD (debit card for Health Care FSA participants ONLY)

What is the Benny Card?
It’s an optional FSA debit card that provides a convenient way to pay for your eligible out-of-pocket health care expenses for you, your spouse and your qualified tax dependents.  You will receive a debit card application and instructions in your welcome packet from ASIFlex.  The card is a great benefit, but it is important that you take a few minutes to understand how it works. 
NOTE: The card cannot be used to pay for your Limited Health or Dependent Care FSA expenses.

How does the Benny Card work? 
The Benny Card can only be used at health care providers (based on their Merchant Category Code) and at retail stores that have implemented an FSA Inventory Control System.  When you pay for services at a participating provider with the Benny Card, the amount is charged against your FSA as long as you have not exceeded your balance.  When you use the Benny Card, you don’t need to submit a claim to ASIFlex for reimbursement.

Will I have to provide supporting documentation when I use the Benny Card?
The IRS has stringent regulations regarding the appropriate use of the Benny Card, such as where the card can be used and when supporting documentation is required.  The use of the card may not eliminate all of the paperwork. 

  • Certain situations will allow FSA debit card transactions to be electronically substantiated (no follow-up documentation will be required) if they:
    • Match a co-payment or any combination of co-payments up to five times the highest, for the health insurance plan that you have elected through ASU,
    • Occur at retail outlets that have implemented the FSA Inventory Control System, or
    • Are recurring expenses for the exact amount at the same provider and have been substantiated once via a paper claim.
  • If a transaction cannot be electronically substantiated, you will receive a request from ASIFlex to provide supporting documentation.  Failure to provide supporting documentation as requested by ASIFlex may result in the suspension of your Benny card. 

Will I be charged any fees to use the debit card?
Yes.  A one-time annual fee of $12 will be subtracted directly from your Healthcare FSA account.  Participants who enroll for the card after January 1 will be charged a prorated fee of $1 per month for the remainder of the calendar year.  Participants who become ineligible to participate during the plan year will not be eligible for any prorated reimbursement of the fee. 

IMPORTANT NOTE:  The information provided in this FAQ is not binding and is subject to change at any time.  If there is any conflict between the information contained in this FAQ and the plan document, the plan document will override this information.  Read applicable ASU Policies and Benefit Plan Documents for complete information.

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