Flexible Spending Accounts (FSA)
Formerly known as Tax Saver Benefit (TSB)
Flexible Spending Accounts (FSAs) offer a convenient way for you to pay for IRS eligible healthcare and/or dependent care expenses with pre-tax dollars. When you enroll in an FSA, your contributions are made through pre-tax payroll deduction, meaning they and are not subject to federal, state, local or FICA taxes. This can mean substantial savings. IU-sponsored FSAs are administered by The Nyhart Company (“Nyhart”).
Full-time (75% FTE or more) appointed Academic and Staff employees (including IU Residents) are eligible to participate in each provision of the Tax Saver benefit plan:
- Pre-tax Premium Conversion
- Healthcare FSA
- Dependent (Day/Evening) Care FSA
Advantages of FSAs
FSAs allow you to reduce your out-of-pocket costs for certain dependent care and healthcare expenses by using "tax-exempt" dollars. FSA contributions are generally not taxed by federal, state, local or FICA, meaning those dollars usually paid in taxes end up on your paycheck instead.
You do not have to be enrolled in an Indiana University-sponsored healthcare plan to contribute to an FSA.
How much can you save? Take a look at this example.
The following is an example only and is based on an annual salary of $34,000. Tax savings will depend on one’s individual tax rate. Tax savings really do add up.
|Cost of eyeglasses|
|Contribution to TSB||
|Income taxes paid to take home $480||
|Amount you must earn to pay copays/coinsurance||
The 2022 annual contribution limit is $2,750 per person (i.e. IU spouses can each have their own Healthcare FSA with a $2,750 contribution per person). There is no minimum contribution requirement.
Dependent Day/Evening Care FSA
The contribution maximum is $5,000 per household. Spouses can each have their own Dependent Care FSA, but their combined elections cannot exceed $5,000. There is no minimum contribution.
Reimbursable dependent care expenses:
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 your other qualifying tax dependents, which allow you or your spouse to work. Eligible expenses include:
- Nursery school, pre-school, or similar programs for children below the level of kindergarten
- Before- or after-school care of a child in grade K or above
- Summer camp during working hours
- Household services to a household employee whose services include the care of a qualifying person
Reimbursable healthcare expenses:
- Deductibles, coinsurance, and copayments*
- Routine care/physical exams
- Transportation for medical services
- Weight-loss programs prescribed by a physician for a specific diagnosis
- Stop-smoking programs
- Hearing aids and related expenses
- Prescriptions, including birth control pills
- Dental care and orthodontia
- Disposable face masks (with note from doctor)
- Certain over-the-counter (OTC) medications
- Menstrual care products
- Personal protective equipment (PPE) for the primary purpose of preventing the spread of COVID-19 (e.g. face masks, hand sanitizer, and sanitizing wipes)
Review the full list of eligible healthcare expenses.
For employees enrolled in both the Health Savings Account and the Healthcare Flexible Spending Account, reimbursements from the Healthcare FSA are limited to dental and vision services, and other services only after the HDHP deductible is met.
Claim Filing Deadlines
Healthcare FSA: all claims must be incurred between January 1 (or the initial date of eligibility) and December 31. Claims must be submitted to Nyhart no later than February 28 of the following year.
Dependent Care FSA: all claims must be incurred between January 1 (or the initial date of eligibility) and March 15 of the following year. Claims must be submitted to Nyhart no later than April 15 of the following year. (See the Grace Period FAQ for details.)
If a deadline falls on the weekend, it is extended to the end of the following business day.
Can I enroll in both the Healthcare FSA and the HSA?
Yes; however, when you are enrolled in both accounts, 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 Nyhart, funds in your Healthcare FSA can be then used for medical and prescription expenses incurred from that date forward. The IU Benefit Card will automatically begin pulling all expenses from your FSA first, then from your HSA once FSA funds are exhausted. You also have the option to pay for expenses out-of-pocket, then submit a claim for reimbursement to Nyhart.
How do I login to my Nyhart account?
Follow these instructions to create your initial web or mobile app accounts.
How do I use the money in my Healthcare FSA?
First, you must authorize Nyhart to direct deposit reimbursements from your Healthcare FSA (paper reimbursement checks are not issued). You can submit your bank account information online by logging in to iu.nyhart.com, or by submitting a paper FSA Direct Deposit Authorization / Termination Form to Nyhart. All claims for reimbursement are held until your direct deposit authorization has been received by Nyhart.
Then, there are two ways to use the funds in your Healthcare FSA. You may:
- Pay out-of-pocket, then request reimbursement from Nyhart. Claims can be submitted by logging in to iu.nyhart.com or by submitting a paper FSA Claim Form to Nyhart. Both must include supporting documents.
- Use the IU Benefit Card to pay for your expenses at the time of service.
For each expense in a claim for reimbursement a supporting document must be included. Supporting Documents (claim substantiation) can be in the form of:
- A copy of a receipt for service or purchase
- A copy of a confirmed online bill payment
- A copy of health claim summaries (EOB) from an insurer
Each supporting document must include the following:
- Name of provider
- Date of service/purchase
- Type of service/purchase
- Charge (Amount) for each service/purchase
Be sure to retain a copy of the Claim and the supporting documentation.
What is the IU Benefit Card?
The IU Benefit Card is a debit-type Visa card that allows participants to pay for purchases and services from their Healthcare FSA, their Health Savings Account (HSA), or both. When you are enrolled in both the Healthcare FSA and the HSA, your IU Benefit Card is a “stacked card.” This means that when you use the card at a medical or pharmacy provider, the card will automatically draw from your HSA. When used at a dental or vision provider, the card will automatically draw from your FSA funds first, then from your HSA once the FSA funds have been exhausted.
See the IU Benefit Card Terms and Conditions for detailed information.
Note: The IU Benefit Card does not apply to Dependent Care FSA expenses.
What is the Dependent Care FSA?
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 your other qualifying tax dependents which allow you or your spouse to work.
Do unused FSA funds roll over from year-to-year?
Healthcare FSAs allow up to $550 of unused funds to be rolled over into a new account at the end of the plan year to be used for your eligible healthcare expenses in the following plan year.
If you have more than $550 remaining in your Healthcare FSA on December 31 :
- You have until February 28 of the following plan year to submit claims for reimbursement.
- Unused funds in the account in excess of $550 after February 28 are forfeited.
- Usual usage restrictions apply when enrolled in both the HSA and Healthcare FSA .
Dependent Care FSAs do not have a carryover provision. Claims for expenses incurred between January 1 and March 15 of the following year must be submitted by April 15. Any unused funds in the account after April 15 are forfeited.
IU Human Resources