Human Resources

Flexible Spending Accounts (FSAs) are an IU-sponsored benefit that allows you to use pre-tax salary to pay for certain dependent care or healthcare expenses, depending on the type of account you elect.

Each year during IU Open Enrollment, you elect your annual contribution amount for the following year for one or both accounts. This amount is divided equally among your paychecks over the year. You do not pay taxes on this money, and it is put into an account for you to use for eligible healthcare or dependent care expenses, depending on the type of account you elect.

Healthcare FSA: If you enroll in the Healthcare FSA during Open Enrollment, your entire annual pledge is available for claim reimbursement starting January 1. For mid-year elections (e.g. new hires, life event changes) your entire annual pledge is typically available by the second payroll cycle after the election is made; however, the timing depends on when the election is made and on payroll deadlines.

Claims must be incurred between January 1 and December 31 (or your benefit enrollment period), and submitted for reimbursement by February 28 of the following year. Any amount above the annual carryover limit remaining in the account after this date is forfeited.

Dependent Care FSA: Dependent Care FSA funds are not front-loaded, which means that the funds are only available for reimbursement after they are deposited in your FSA through your payroll deductions.

Claims must be incurred between January 1 and March 15 of the following year (or your benefit enrollment period), and must be submitted for reimbursement by April 15. Any unused funds remaining in the account after this date are forfeited.

Claims can be submitted online, or by email, mail, or fax. Please do not send the same claim by multiple methods. The online claim submission process is not to be used for debit card substantiations.

Refer to the How to File An FSA Claim pdf for instructions. Multiple expenses can be listed on one claim form.

Required Documentation

Healthcare Expenses: Your claim must include supporting documentation in the form of a copy of the receipt for the service or purchase, a copy of a confirmed online bill payment, or a copy of a health claim EOB from the insurer. Each document must include the following:

• Name of provider
• Date of service/purchase
• Type of service/purchase
• Charge (amount) for each service/purchase

Dependent Care Expenses: Your claim must include supporting documentation in the form of a copy of the receipt for the service or a copy of a confirmed online bill payment from the provider. Each document must include the following:

• Provider information, including name, address, and Tax ID number or Social Security Number
• Name and age of the dependent who received care
• Date of service
• Charge (amount) for each service

Submit the FSA Claim Form and supporting documents directly to WEX using one of the following methods:

• Email: from your @iu.edu email account and enter [Secure Message] in the email subject line

• Fax: (888) 887-9961
• Mail:
  IU HSA/FSA
  P.O. Box 2905
  Fargo, ND  58108

Submitting Claims Online

When submitting a claim online, you must have a digital copy of any required supporting documentation to attach to each expense. To submit claims online:

1. Log in to www.benefit-info.com/iu/
2. Select File Claim/Reimburse Self.
3. Under Create Transaction, select your FSA account (for the Healthcare FSA, select “Medical”) from the drop-down menu.
4. Select Next and follow the prompts to submit your claim for reimbursement.

The amount you elect is deposited into your account(s) before federal income, Social Security and in most cases, state and local income taxes are withheld, so your deposits are completely tax-free. You are not taxed on reimbursements from these accounts either.

The monthly account administration fees are fully paid by the university. For the Healthcare FSA, two IU Benefit Cards are provided . Additional cards may be requested at no cost.

After you enroll in one or both accounts, an account will automatically be opened for you with our FSA vendor. Your annual pledge is taken evenly from your paychecks throughout the year on a pre-tax basis.

You can change your FSA contributions each year during the annual Open Enrollment period in the fall, with an effective date of January 1. Mid-year contribution changes can only be made if you experience an IRS-defined qualifying Life Event such as marriage or becoming a parent.

Yes, you can elect up to the annual maximum. Your pledge will be taken evenly through payroll deduction over the remaining pay periods in the year.

No. The Healthcare FSA and Dependent Care FSA are separate accounts, and the money you elect to deposit in one account must remain in that account.

You have two options to repay your FSA account:

• Option 1: You can mail a check to WEX with a note letting them know which FSA claim the funds should go towards. Mail to: IU HSA/FSA, P.O. Box 2905, Fargo, ND  58108-2905.
• Option 2: You can contact WEX Customer Service at 800-284-8412 and request to repay the funds online. WEX will deny the claim, or a portion of the claim, and request repayment from you, at which time you can log in to your account at www.benefit-info.com/iu/ and repay your account.

During an approved unpaid leave of absence, you can either continue to participate or terminate/suspend participation in your FSA(s) for the duration of your leave.

If you choose to continue participation, you will not be billed for your FSA contributions while on leave. You can continue to incur eligible expenses, and be reimbursed for those expenses, during your leave. Upon your return within the same tax year, your deductions will resume and automatically be adjusted to reach your initial election amount by the end of the year. For example, if you had an annual election of $1,200 and you had already contributed $500 prior to your leave ($100 per paycheck for 5 paychecks); then you went on leave and missed 2 paychecks; when you returned from leave the remaining balance of $700 would be deducted over the remaining 5 paychecks ($140 per paycheck).

If you choose to suspend /terminate participation, you cannot continue to incur eligible expenses, therefore you will not be reimbursed for any expenses incurred during your leave. Upon your return within the same tax year, you can elect to reinstate your participation at either the same annual election amount as you had prior to your leave or you may reduce your election amount so that your deductions continue at the original per pay period deduction amount. Electing other amounts is not allowed.

When you leave your job at IU, you’re no longer eligible to incur qualifying healthcare or dependent care expenses as of the date of your termination. You have until the standard filing deadlines listed below to submit claims for reimbursement for any expenses.

Healthcare FSA: For the Healthcare FSA, you have the option to elect COBRA continuation coverage on a month-to-month basis following your separation from IU. This will give you additional time to incur eligible expenses and spend down your FSA funds. You can extend your coverage through December 31 of the year you terminate IU employment, and have until February 28 of the following year to file claims for reimbursement. The IU Benefit Card (debit card) for the Healthcare FSA is shut off once you leave the university.

Dependent Care FSA: There is no option to continue coverage for your Dependent Care FSA. Qualified expenses must be incurred prior to your separation from IU, and claims for reimbursement must be submitted by April 15 of the following year.

Your contributions to your FSA stop. Your survivors have up to the claims deadline to file claims for eligible expenses incurred before your death.

Pre-tax premium conversion allows the exclusion of medical, dental, and Supplemental Accidental Death & Dismemberment (AD&D) premiums from your taxable income.

Because your premiums receive preferential tax treatment under this plan, IRS regulations state that your health plan election is in effect for the entire plan year and cannot be changed until the next Open Enrollment period except under special circumstances defined by IRC Section 125 and by HIPAA special enrollment provisions. These special circumstances are called IRS-defined Qualifying Life Events (or “Life Events”) by this plan.

• You have 30 days from a Life Event to request a change to your benefit elections in writing.
• After 30 days, you must wait until the next Open Enrollment period to make changes with an effective date of the following January 1.

Mid-year changes can be made by submitting a Life Event change online by logging in to the Employee Center.

The grace period applies to Dependent Care FSAs only and allows you to continue to incur expenses for an additional period of time following the end of the plan year (January 1 through March 15 of the following year, or your benefit enrollment period). This gives account holders additional time to spend down their previous year’s balance. Any funds remaining after the March 15 claims deadline are forfeited.

The carryover applies to Healthcare FSAs only and allows a specific amount of funds to transfer into a new account to be used for the following year. Funds exceeding the carryover limit after the claims deadline are forfeited.

Monthly paid employees receive their December paycheck in January. Biweekly paid employees may be paid for December hours in January, depending on the termination date. These checks are paid in the new tax year and will pick up the elections for the FSA that you made during Open Enrollment. If you do not want a FSA deduction taken in the new year, please waive coverage during Open Enrollment.

If an FSA deduction is taken on your January paycheck and you are not eligible for it, IU will close your FSA(s) with WEX (assuming no claims have been paid out), and a refund will be issued for the deduction on an off-cycle paycheck.

WEX
P.O. Box 2905
Fargo, ND  58108-2905
Phone: 800-284-8412
Fax: 888-887-9961

www.benefit-info.com/iu/

IU Human Resources
hr.iu.edu/benefits

Eligible employees may contribute up to $3,050 for 2024. There is no minimum contribution.

First, you must authorize WEX to direct deposit reimbursements from your Healthcare FSA (paper reimbursement checks are not issued for FSA reimbursements). You can submit your bank account information online by logging in to www.benefit-info.com/iu/, or by submitting a paper Direct Deposit Authorization / Termination Form to WEX. All claims for reimbursement are held until your direct deposit authorization has been received by WEX.

Then, there are two ways to use the funds in your Healthcare FSA. You may:

• Use the IU Benefit Card to pay for your expenses at the time of service.
• Pay out-of-pocket, then request reimbursement from WEX. Claims can be submitted by logging in to www.benefit-info.com/iu/ or by submitting a paper FSA Claim Form to WEX. Both must include supporting documentation in the form of a copy of the receipt for the service or purchase, a copy of a confirmed online bill payment, or a copy of a health claim EOB from the insurer. Each document must include the following:
  • Name of provider
  • Date of service/purchase
  • Type of service/purchase
  • Charge (amount) for each service/purchase

While some online websites allow you to purchase Healthcare FSA eligible items, not all of those merchants accept the IU Benefit Card for payment. If the card is not accepted, you can purchase your items out-of-pocket then submit a claim to reimburse yourself from your FSA.

To be considered an eligible expense for the Healthcare FSA , the product or service must be:

• Medically necessary
• For you, your lawful spouse, or anyone you can claim as a qualifying child or qualifying relative on your tax return, or for an eligible child age 25 or younger
• Not reimbursed or is only partially reimbursed elsewhere, such as through an insurance plan

Additionally:

• Expenses reimbursed through your Healthcare FSA cannot also be claimed on your tax return, and vice versa

• If both you and your spouse are eligible for a Healthcare FSA, you can each contribute up to the maximum in separate accounts

Yes, you can use your Healthcare FSA funds to pay for qualified health expenses for you, your spouse, and your children (up to age 26) without tax penalty, even if they aren’t covered on your IU medical plan.

As a reminder, parents can now keep children on their health plans through age 25 – even those who are married and living away from home. You can use your FSA funds to pay for healthcare expenses for these children; however, if you have a Health Savings Account (HSA), those funds can only be used for family members who qualify as true tax dependents.

Eligible healthcare expenses under the Healthcare FSA are also qualified to be taken as itemized deductions on your federal tax return. However, both methods cannot be used for the same expenses, so you must decide which method best meets your needs.

The advantages of an FSA depend on your income, exemptions, deductions, and health care expenses. Generally, each pre-tax dollar you contribute to an FSA lowers your taxable income, so you end up reducing your federal income tax and FICA tax liabilities. In most cases, you’ll also pay lower state and local income taxes.

A major difference between the FSA and the federal tax credit is that FSAs allow you to pay for eligible expenses tax-free starting with the first dollar of the expense. Alternatively, you can only claim a federal tax deduction if your out-of-pocket health care expenses exceed 7.5% of your adjusted gross income.

Another option is to use a combination of the Healthcare FSA and the federal income tax deduction. It’s important to remember that expenses reimbursed from you from your Healthcare FSA cannot also be used for the purposes of claiming a federal income tax credit. Any reimbursements you receive through your FSA will reduce the amount you can claim under the federal tax credit.

Consider the following when determining your annual Healthcare FSA pledge:

• Don’t put money in your account for anything but predictable expenses. Any money left in your account above the carryover limit will be forfeited.

• Do you receive regular medical care or use medication daily?
• Are you planning to purchase eyeglasses, orthodontia, or other eligible expenses?

Logging in to your Anthem, CVS Caremark, or Cigna Dental account can be helpful in reviewing past healthcare expenses. Remember that your election must stay in place for the entire year. The only time you can change your contribution mid-year is if you experience an IRS-defined qualifying life event such as marriage or having a baby.

Unused balances up to $610 (2024) will automatically roll over into a new account to be used in the following plan year. Carryover provisions are as follows:

• Expenses for a plan year can only be incurred from January 1 through December 31 (or your benefit enrollment period).
• Unused funds up to $610 (2024) remaining in your Healthcare FSA on December 31 will carry over into a new account for the next plan year.
• Carryover funds will be available for use on January 1 of the following plan year and can be used for healthcare expenses incurred during that next plan year (regardless of whether or not you re-enroll in the plan).

If you have more than $610 (2024) remaining in your Healthcare FSA on December 31:

• You have until February 28 of the following plan year to submit receipts and claims for reimbursement from your account.
• Any unused funds in the account after February 28 in excess of $610 (2024) will be forfeited.
• Any claims or receipts submitted for the prior plan year will first be applied against any unused balance above the $610 (2024) carryover amount.
• Usual usage restrictions apply when enrolled in both the HSA and Healthcare FSA.

Yes. When you have both an HSA and a Healthcare FSA:

• Your FSA funds can only be used for dental and vision expenses until your annual HDHP deductible is met. Once you meet your deductible, and provide proof of meeting your deductible to WEX, you can begin using your Healthcare FSA funds for medical and prescription expenses from that date forward.
• You receive an IU Benefit Card to use for both accounts. This debit-type VISA card is “stacked” meaning funds will automatically be drawn from your HSA when used at medical or pharmacy providers, and from your FSA when used at dental and vision providers. Once you have provided proof of meeting your annual HDHP deductible to WEX, the card will automatically begin pulling all expenses from your FSA first, then from your HSA once your FSA funds are exhausted. You also have the option to pay for expenses out-of-pocket, then submit claims for reimbursement to WEX.

Remember to adjust for this limitation when calculating your HSA and Healthcare FSA pledges for the year.

No. If your spouse is enrolled in the Healthcare FSA through IU or an HRA/FSA through another employer that is unrestricted (and the account could be used to cover your HDHP deductible), you are not eligible to make tax-free contributions to an HSA.

Anthem tracks your deductible. You can review the progress towards your deductible using the Explanation of Benefits (EOB) statements mailed to your home, or by logging in to anthem.com or the Sydney Health app.

Once you meet your annual HDHP deductible, and provide proof of meeting it to WEX, your IU Benefit Card will automatically draw all expenses from your Healthcare FSA first, then from your HSA once your FSA funds are exhausted. You also have the option to pay for expenses out-of-pocket, then submit claims for reimbursement to WEX.

The IU Benefit Card is a debit-type Visa card, issued by The Bancorp Bank, a national financial services company that allows participants to pay for purchases and services from their Healthcare FSA and Health Savings Account (HSA).

The card does not change any of the plan rules for eligible expenses. Expenses must be IRS-eligible healthcare expenses. See the IU Benefit Card Terms and Conditions for detailed information.

Note: The IU Benefit Card cannot be used for Dependent Care FSA expenses.

Yes.  Employees will receive two cards per family. You can obtain additional debit cards for use by other family members at no cost. Additional cards can be ordered using the form on the WEX Web page (www.benefit-info.com/iu/) or by calling WEX at 1-800-284-8412. When giving cards to family members, remember the employee is responsible for substantiating purchases on all cards, as requested by WEX.

The IU Benefit card is effective for three years and participants can continue to use the card for that period as long as they enroll in either the Healthcare FSA or HSA each year. New cards are automatically reissued as they expire. The card does not apply to Dependent Care FSAs.

The primary advantage is that you can pay for healthcare services directly from your Healthcare FSA, and you do not have to wait to be reimbursed. However, you may still be required to substantiate some purchases with receipts, so the card does not completely eliminate the need to keep and submit receipts when requested.

If you enroll in the Healthcare FSA during Open Enrollment, your card(s) will be mailed to you by the end of December. For mid-year enrollments (e.g. new hires, life event changes), cards will be mailed approximately 2-3 weeks after the election is made. Each employee will receive two cards per family. The card will be issued and sent by The Bancorp Bank in a plain envelope (it will not be identified as WEX or Indiana University), so watch your mail carefully.

Once you receive your cards, you must activate them by calling the phone number listed on the sticker on the front of the card. The phone number is also included in the mailer. If you have questions regarding the activation process or need assistance, contact WEX at the phone number listed on the back of the card.

You can obtain additional debit cards at no cost by submitting an Additional Debit Card Request Form directly to WEX or by calling WEX at 1-800-284-8412. When giving cards to family members, remember that you (the employee) are responsible for substantiating purchases on all cards, as requested by WEX.

Debit card. This card is attached to a deposit account (your HSA) and not to a credit account, but may be used at any healthcare provider that accepts VISA.

The card can be run as debit or credit. If you wish to run the card as debit, you must set up a PIN first. The card cannot be used at an ATM or to get cash back after a purchase.

Yes. Participants enrolled in the HSA and Healthcare FSA will receive an IU Benefit Card to use for both accounts. This debit-type VISA card is “stacked” meaning funds will automatically be drawn from your HSA when used at medical or pharmacy providers, and from your FSA when used at dental and vision providers. Once you have provided proof of meeting your annual HDHP deductible to WEX, the card will automatically begin pulling all expenses from your FSA first, then from your HSA once your FSA funds are exhausted. You also have the option to pay for expenses out-of-pocket, then submit claims for reimbursement to WEX.

The IU Benefit Card can be used to pay for IRS-defined eligible healthcare expenses.

IMPORTANT: If you are enrolled in both the Health Savings Account and the Healthcare HSA, special rules apply to the IU Benefit Card. See Section C. Healthcare FSA and HSA of this FAQ for details.

The IU Benefit Card cannot differentiate between IRS-eligible expenses and non-eligible expenses unless the merchant has installed an IRS-approved inventory system. The IRS requires that the employer take steps to verify that the IU Benefit Card is being used only for eligible expenses. Intentional misuse of the card is subject to IRS penalties. Submitting claims for review and storage also helps to protect the plan and employees, should they be audited by the IRS.

Failure to provide receipts when requested will result in a denial of the charge. You will be responsible for covering that expense out-of-pocket and returning those funds to your FSA account. Failure to turn in receipts or return funds will result in your IU Benefit Card being deactivated.

WEX will send you an email request (or a request through U.S. mail if you do not provide an e-mail address) for substantiation of your expense each time you use your card at an office or merchant that does not have an IRS-approved inventory system. Submitting documentation (e.g. receipts) for these purchases is required and must be done within two weeks. One reminder will be sent. If purchases are not substantiated within 30 days, your card will be deactivated until you provide the requested documentation. If you cannot provide receipts, you will be asked to send WEX a check to repay the unsubstantiated reimbursements from your account.

Your FSA should only be used for eligible health expenses, but mistakes can happen. If this happens, you should take steps immediately to reimburse your account. If WEX notices the error first, repayment will be requested and your card will be deactivated if your account is not reimbursed. An example of an ineligible expense might be a dental bill paid in January for services provided in December of the prior year. Please note that WEX makes reasonable efforts to verify the eligibility of expenses; however, you (the employee) are ultimately responsible to the IRS for misuse of the card.

If you cannot substantiate your purchases, WEX will ask you to reimburse your account. Your card will be deactivated if you do not reimburse the account.

Yes. Healthcare FSA funds can be used for over-the-counter (OTC) medicines without a prescription. If you have specific questions about which items are eligible, contact WEX at 1-800-284-8412 or .

No. You cannot use FSA funds to pay for health insurance premiums.

You must pay the excess amount out-of-pocket.

Yes. However, receipts submitted to WEX for substantiation of card purchases and receipts for reimbursement of claims must be clearly differentiated.

• Receipts for reimbursement must be accompanied by a FSA Claim Form.
• To submit receipts to substantiate card purchases, wait to receive an e-mail (or U.S. mail) request from WEX, then submit the receipts with a copy of the request. Do not use a claim form to substantiate card purchases. Doing so may result in the purchase amounts being deducted twice from your account.

You can use your IU Benefit Card to pay the bill by writing your card number on the invoice and mailing it in, or by providing the card information to your provider over the phone or online. You can also use the card for mail order pharmacy service.

Remember, expenses must be incurred during the plan year (January 1 – December 31, or your benefit enrollment period) and all claims and receipts must be submitted to WEX no later than February 28 of the following year.

If you lose your IU Benefit Card, contact WEX immediately to have your cards deactivated and new cards issued at no cost. Remember, no PIN is required to use the card, so you must report lost or stolen cards immediately.

Here are some things to consider:

• The card can be used inadvertently for ineligible items causing request for repayment of your account.
• Using the card can make it easier to forget that receipts must be retained in order to substantiate claims as required.
• Certain unsubstantiated purchases must be repaid or the card is deactivated.
• Cards can be lost or stolen which requires reporting, cancellation, and reissue.
• Most, but not all, providers accept the card.
• If you sometimes use the card and other times pay out-of-pocket, keeping track of different payment and substantiation methods may be hard to manage.
• If you are in the habit of saving receipts over the year and submitting them all at one time, the card may require multiple submissions.
• When using the card at a merchant location, you must separate eligible expenses and pay for them separately from ineligible purchases. For example, if you purchase eligible over-the-counter medications along with groceries, those purchases must be separated so the card is only used for eligible expenses.
• The card may not be accepted at the main checkout counter of some grocery stores, discount stores, or pharmacies. Eligible over-the-counter items may have to be purchased separately at the pharmacy counter.

This account allows you to set aside tax-free money to reimburse yourself for day/evening care expenses for your children under age 13, or other qualifying tax dependents, which allow you and your spouse to work, look for work, or attend school full time.

You can contribute up to $5,000 annually ($2,500 for married employees who file their income taxes separately). However, the maximum allowable expense cannot exceed the amount of earned income of the lesser-paid of the employee or spouse. There is no minimum contribution.

When parents are divorced, separated, or living apart, only the custodial parent is permitted to utilize the Dependent Care FSA for eligible day/evening care expenses.

IRS guidelines state that even if you cannot claim your child as a dependent, they are treated as a qualifying person if:

• The child was under age 13 or was not physically or mentally able to care for themselves;
• The child received over half of their support during the calendar year from one or both parents who are divorced or legally separated under a divorce or separate maintenance decree, or are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year;
• The child was in the custody of one or both parents for more than half the year; and
• You were the child’s custodial parent.

The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year. When the number of nights with each parent is the same, the parent with the higher adjusted gross income is treated as the custodial parent.  

The noncustodial parent cannot utilize the Dependent Care FSA for the child even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. 

For additional information, see IRS Publication 503 – Child and Dependent Care Expenses, or consult with your tax advisor.

Generally, expenses are eligible for the following dependents: children under age 13; totally disabled dependents; or dependents otherwise eligible for federal income tax purposes, if all the following conditions are met:

• The employee is unmarried; or if married, both the employee and spouse work, or the spouse is a full-time student or totally disabled; and
• The dependent care expense is incurred during the plan year to enable the employee and spouse to work, look for work, or attend school full time; and

• The expenses are paid to someone who is not also the employee's dependent for federal income tax purposes and the caregiver reports the income for tax purposes; and
• If divorced, the employee or spouse is the custodial parent; and
• The services are not provided free of charge or for a period of time when the employee or spouse is providing the care, i.e., on vacation or leave; and
• If provided by a day care facility, the facility meets all state and local regulations; and
• If for elder care, the elder dependent lives in the employee's home at least 8 hours per day; and
• The charges will not be claimed as a Federal Child and Dependent Care Credit against federal income taxes.

Maybe. These expenses are eligible for reimbursement only after care has started. If the expense crosses tax years, it may not be eligible for reimbursement. A forfeited deposit is not an eligible expense if care is not provided.

Holding a spot in a daycare center – For example, your child is born in February, but care is not needed until August. However, the daycare center is requiring that you pay the weekly fees from March through July to hold a spot. These expenses are considered eligible for reimbursement from your Dependent Care FSA, but only after care has started.  If the expense crosses tax years, it may not be eligible for reimbursement

Perhaps. Your child’s charges are eligible if they are at least 19 years old and not your dependent for tax purposes.

If your parent lives in your home, is listed as your dependent for tax purposes, and relies on you for support, you can use the Dependent Care FSA for their day care expenses.

No. According to IRS rules this account is to pay for the care of your children living with you and only when paying for such care enables you—not your ex-spouse—to work, look for work, or attend school full time.

Expenses can be incurred between January 1 through March 15 of the following year (or your benefit enrollment period).

All dependent care expenses must be paid out-of-pocket and then submitted to WEX for reimbursement. Claims can be submitted online by logging into www.benefit-info.com/iu/ or by submitting a FSA Claim Form by email, fax, or mail to WEX. Claims must be submitted by April 15 of the following plan year.

A Direct Deposit Authorization must be on file with WEX as reimbursements are only made through direct deposit to your checking or savings account. You can submit your bank account information online by logging into www.benefit-info.com/iu/, or by submitting a Direct Deposit Authorization / Termination Form to WEX. All claims for reimbursement will be held until your direct deposit authorization has been received by WEX.

Reimbursements will only be made once the service has been fully incurred, even if your provider requires advance payment. For example: assume a daycare provider requires payment before January 1 for services rendered between January 1 and 31. According to the IRS, reimbursement from your FSA cannot be made until the services have been rendered (incurred), so you would have to pay up front for the cost then request reimbursement after January 31.

The IU Benefit Card is NOT available for use with this account.

The grace period allows you to continue to incur dependent care expenses for an additional 2.5 months (until March 15) following the end of the plan year. This means you have a total of 14.5 months each year (January 1 – March 15 of the following year) to incur eligible dependent care expenses.

All Dependent Care FSA claims must be submitted to WEX by April 15 of the following year. Any unused funds will be forfeited under IRS regulations.

Claims incurred during the grace period will be processed from your prior year balance first. Once those funds are exhausted or the claims deadline is reached (whichever is first), claims will be processed from your current year balance (if applicable). Any unused funds remaining after the claims deadline are forfeited. You are responsible for ensuring that claims are filed under the appropriate plan year.

No, the claims filing deadline for Dependent Care FSAs remains April 15. Claims can be submitted online, by email, by fax or by mail to WEX. Any unused funds remaining after the claims deadline are forfeited and, per IRS rules, cannot be returned to the employee.

The grace period does not affect your taxes or tax reporting requirements. Dependent Care FSA deductions that are taken from your paycheck will still be reported on your W-2 (box 10) for the same year it comes out of your paycheck.

Generally, the Dependent Care FSA is more advantageous. With federal itemization, the tax credit permits exemption only on expenses up to $3,000 for one dependent, or $6,000 for two or more dependents. The exclusion is only on federal income tax (FICA, state and local income taxes must still be paid), and the benefit is received only after filing tax forms at the end of the year.

With the Dependent Care FSA, tax exemption is allowed for 100% of expenses up to $5,000 ($2,500 for married employees filing income taxes separately). This method reduces federal, FICA, state, and local income taxes, and the tax benefits are received on each paycheck throughout the year.

For additional information see IRS Publication 503 or speak to your tax advisor.

For the Dependent Care FSA, your annual pledge is divided over the number of pay periods in the year, then deposited to your FSA with each paycheck. As you pay for dependent care expenses throughout the year, you can reimburse yourself for those expenses from the funds available in your Dependent Care FSA.

Even if your FSA balance is less than your claim, you can still file the claim. If approved, you will be reimbursed as funds become available in your account. For example, if you submit a claim for $500 and your account balance is only $200, WEX will reimburse the $200 available in your account, and your  balance will be reflected as negative $300. As additional funds are deposited with each paycheck, WEX will automatically reimburse you for the remaining amount.

Claims must be incurred between January 1 and March 15 of the following year, or your benefit enrollment period. Dependent Care FSA claims must be submitted to WEX by April 15 of the following year. Any unused funds will be forfeited after that date.