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New IU Tobacco-free Wellness Program

Tobacco use is the number one cause of preventable disease and death in the United States. Quitting tobacco use has immediate and long-term health benefits not only to users, but to others through the elimination of second-hand smoke. As an incentive for the non-use of tobacco and to promote a healthy life, the university is implementing the IU Tobacco-free Wellness Program which includes these two distinguishable plans:

  • Tobacco Cessation Plan
  • Wellness Health Reimbursement Arrangement (HRA) Plan

Tobacco Cessation Plan

Medical benefits will be enhanced to cover the cost of a Tobacco Cessation Plan with Free & Clear, Inc. Quit for Life™ cessation program, effective November 1, 2007. The benefit will be available to all full-time Academic and Staff employees and their family members 18 or older even if they are not enrolled in an IU-sponsored medical plan. The plan will be fully paid by the university. To enroll, individuals may call 866-784-8454 (1-866-QUIT-4-LIFE) after November 1 or visit

Free & Clear’s Quit for Life™ program includes an individualized cessation plan. The program offers an assigned Quit Coach, phone counseling sessions designed to set and reach a quit date, nicotine replacement therapy as needed, and one year of follow-up phone and Web assistance to help participants stay “quit.”

Wellness HRA Plan

A Wellness HRA Plan is being established for employees who are eligible for an IU-sponsored medical plan. To participate, employees must sign an affidavit—Section 7 of the Open Enrollment 2008 packet—each year indicating that they do not use tobacco products and will not during the upcoming year. For each of these employees, the university will contribute $10 a month to an HRA account set up in her or his name.

Employees who are not tobacco-free at the time of Open Enrollment may still enroll (during Open Enrollment only) in the Wellness HRA by agreeing to the following:

  • Complete the Quit for Life™ tobacco cessation program by June 1, 2008 and
  • Complete the follow-up survey six months from the quit date.

IU contributions will be discontinued at any time an employee has failed to honor the affidavit.

HRA Plan Account

The Wellness HRA is an employer-paid account set up under Internal Revenue Service regulations that allow preferential tax treatment for contributions. The account is funded entirely by the university. Neither IU contributions to nor reimbursements from an HRA are considered taxable income to the employee.

Contributions of $10 per month will be made for those employees who sign the affidavit. Reimbursements from the Wellness HRA will be allowed for IRS-approved medical expenses incurred by the employee, such as deductibles, copays, non-covered medical expenses, and over-the-counter medications.

The HRA will be administered by Nyhart. Employees who participate in the Wellness HRA will receive additional information about the plan after enrolling.

Account Balances and Claims

Unused year-end account balances up to a $240 maximum will carry over into the next year. Terminating employees—and employees whose participation in the plan ends due to transferring to an ineligible position—will be able to use their balance through the end of the calendar year in which they terminate or transfer. Employees who are part of a reduction in force will have additional time to use their balance.

Claims will only be paid from the HRA account for the amount of contributions accumulated at the time of the claim. Claims can be submitted online, by fax, or by mail to Nyhart.

See also:

For Employees Enrolled in both the Wellness HRA and TSB Plans

Nyhart will reimburse claims using Tax Saver Benefit (TSB) funds first since they do not roll over. Employees will be able to view their HRA and TSB accounts side by side on the Nyhart Web site at

Tax Saver Benefit (TSB) Plan

The TSB plan is designed to save tax dollars when a participant pays for certain IRS-eligible expenses. When salary contributions are made into one or both TSB expense reimbursement accounts, the contributions are not subject to federal, state, local, or FICA taxes. This results in substantial savings to the employee. Full-time employees may elect to participate in either or both of these accounts:

  • Health Care Reimbursement Account - for health care expenses incurred by the employee or the employee’s eligible tax dependents (if expenses are not eligible for health plan reimbursement)
  • Dependent Care Reimbursement Account - for child or elder day care (not health care) expenses that allow the employee to work

How TSB Saves Money

An employee who pledges $1,000 to a TSB reimbursement account will have her/his salary automatically reduced each pay period (approximately $83 for monthly paid employees or $41 for biweekly paid employees). Yet, the entire $1,000 is available for reimbursement at any time—as early as the first day of the plan year—before the $1,000 has been deducted from the salary. In addition, the $1,000 is not taxed; therefore, based on a 25 percent tax rate, the employee saves $250.

Account Balances and Claims

Each year, employees can use any remaining health reimbursement (not dependent care) account balances to pay for qualified expenses incurred in January and February of the following year. Expenses incurred during the grace period are always reimbursed from the previous year’s balance.

The TSB expense reimbursement accounts are administered by The Nyhart Company. The deadline for submitting claims to Nyhart is April 15.

TSB Debit Card

During October, all employees who currently have a Tax Saver Benefit (TSB) debit card will receive a new one. The card will have a new look and reflect a banking change from Key Bank to M&I Bank; however, the TSB plan and access to TSB funds remain unchanged. The new debit card replaces any previous TSB debit cards. Participants may begin using the new card as soon as it arrives in the mail. Initial use of the new card will permanently deactivate the old one. Please destroy the old debit card. TSB debit cards have a three-year expiration date. If there are questions, please contact Nyhart at (800) 284-8412.

Employees who do not currently have a card can request one between December 17 and December 31, 2007. Detailed information about the card option is at and will also appear in the Open Enrollment packet mailed in early November.

Employees enrolled in the Wellness HRA will be able use the TSB debit card to pay for IRS-approved medical expenses; however, Nyhart will reimburse claims using TSB funds first.



Page updated: 8 October 2007