Tax Saver Benefit (TSB)
NEW TSB Dependent Care Grace Period
A 2 ½ month grace period has been implemented for TSB Dependent Care accounts. Employees with a 2020 TSB Dependent Care account now have until March 15, 2021, to incur expenses and spend down their balance. Check out these frequently-asked-questions for details.
The Tax Saver Benefit (TSB) plan is designed to save tax dollars when you pay for IRS eligible expenses. When you elect to set aside salary contributions into one or both of the TSB accounts, healthcare or dependent care, the contributions are not subject to federal, state, local or FICA taxes. This can mean substantial savings. The TSB accounts are administered by the Nyhart Company.
Full-time (75% FTE or more) 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 Spending Account
- Dependent (Day/Evening) Care Spending Account
Advantages of the TSB Account
This Plan allows you to reduce out-of-pocket costs for dependent care expenses and certain health expenses by using "tax-exempt" dollars. TSB dollars are generally not taxed by federal, state, local or FICA. Dollars usually paid in taxes end up in the employee's paycheck under the TSB plan.
You do not have to be enrolled in an Indiana University-sponsored health care plan to take advantage of these tax savings.
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 2021 annual contribution limit is $2,750 per person (i.e. IU spouses can each have their own TSB Healthcare account with a $2,750 contribution). There is no minimum contribution requirement.
TSB Dependent Day/Evening Care
The contribution maximum is $5,000 per household. Spouses can elect TSB Dependent Care, but their combined elections cannot exceed $5,000. There is no minimum contribution.
Reimbursable dependent care expenses:
- Nursery school, pre-school, or similar program for children below the level of kindergarten
- Expenses for before- or after-school care of a child in grade K or above
- Summer camp (for children under age 13) 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) items and medicines **
- Menstrual care products **
*For employees enrolled in both the Health Savings Account and the TSB Healthcare Spending Account, reimbursements from the TSB Healthcare account are limited to dental and vision services, and other services only after the HDHP deductible is met.
**It may take time for vendors to update their systems to recognize these items as eligible expenses. Until then, these items can be purchased out-of-pocket then submitted for reimbursement through your TSB Healthcare Spending account.
Claim Filing Deadlines
For TSB Healthcare accounts, 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.
For TSB Dependent Care accounts, 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. (This is a new plan feature beginning with the 2020 plan 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 TSB Healthcare Account and the HSA?
Yes; however, when you are enrolled in both accounts, your TSB 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 TSB 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 TSB first, then from your HSA once TSB 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 and/or mobile app accounts.
How do I use the money in my TSB Healthcare account?
First, you must authorize Nyhart to direct deposit reimbursements from your TSB Healthcare account (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 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 your TSB Healthcare Spending account. 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 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 TSB Healthcare Account, their Health Savings Account, or both. When you are enrolled in both the TSB Healthcare and HSA, your IU Benefits Card will be a “stacked card.” This means that when you use the card at a medical or pharmacy provider, the card will automatically draw from the HSA account. When used at a dental or vision provider, the card will automatically draw from TSB funds first, then the HSA once TSB funds have been exhausted.
See the IU Benefit Card Terms and Conditions for detailed information.
Note: The IU Benefit Card does not apply to the TSB Dependent Care Spending Account expenses.
What is the TSB Dependent (Day/Evening) Care account?
This account allows you to set aside tax-free money that is later used to reimburse yourself for day/evening care expenses of a child (under age 13), or other qualifying tax dependents, in order to allow the employee and spouse to work.
Can I carryover unused TSB account funds from year-to-year?
The TSB Healthcare Spending Account has a carryover provision at the end of each plan year. Plan participants are able to carryover up to $550 of unused TSB Healthcare Spending Account funds into a new account in the following plan year.
When employees have more than $550 remaining in their TSB Healthcare account on December 31st:
- Employees have until February 28th of the following plan year to submit claims for reimbursement.
- Any unused funds in the account after February 28th in excess of $550 will automatically be forfeited.
- Usual usage restrictions apply when enrolled in both the HSA and TSB Healthcare Spending accounts.
The TSB Dependent Care Spending Account does not have a carryover provision. Employees can incur expenses from January 1 through March 15 of the following plan year, and claims must be submitted by April 15. Any unused funds in the account after April 15th are forfeited.
IU Human Resources