Flexible Healthcare & Dependent Care Spending Accounts
LSU has partnered with Diversified Benefit Services, Inc. (DBS) to offer employees Flexible Spending Accounts (FSA). This benefit provides you with the opportunity to set aside pre-tax dollars for out-of-pocket health care or dependent care expenses incurred by you and/or your eligible dependents. You must determine an annual target amount to be withheld from your paycheck. You should determine the amount to be withheld by forecasting your out-of-pocket health care and/or dependent care expenses for the entire Plan Year (January 1 through December 31). IRS regulations state that if all the money in the account is not used by the end of the Plan Year, the remaining balance must be forfeited (known as the “Use-it-or-Lose-it rule”).
Please note that due to the tax savings associated with the FSA, the IRS does not allow employees to be enrolled in both the FSA and the Pelican HSA 775 Health Plan. If you are enrolled in the Pelican HSA 775 plan, you are not eligible to participate in a healthcare spending account.
The monthly fee to participate in the FSA is $5.00/month ($6.67/month for 9-month employees), which includes participation in both the Healthcare Spending Account and the Dependent Care Spending Account, regardless of contributions made to either account(subject to minimum/maximum requirements).
|Type of Account||Minimum Contribution||Maximum Contribution|
|Healthcare Flexible Spending||$100||$2,750|
|Dependent Care Flexible Spending||$100||$5,000 (or $2,500 if married and filing taxes separately)|
NOTE: For 2021, Employees paid monthly will have 12 deductions in 2021.
Enrollment & Effective Date of Coverage
Timely Applicant: Enrolled within first 30 days of full-time employment, coverage will be effective the first of the month following the first full calendar month of employment.
*For example: Date of hire = August 20; Effective Date = October 1
*If not enrolled within the first 30 days of employment, enrollment may only occur during Annual Enrollment in October for an effective date of January 1 or due to a Qualifying Event.
Healthcare Flexible Spending Account
Eligible employees are allowed to enroll in increments of $100, up to $2,700 annually. Participants enrolled in the Healthcare FSA will be provided with a pre-loaded debit card with your annual target amount for your use throughout the Plan Year. Payroll deductions are made in equal payments throughout the year, but you have access to the full contribution at the beginning of the Plan Year. The deduction is made before taxes, thus making the spending account dollars tax-free. To access the money in your account, you can either use your FSA Debit Card at the time of service, you can file a paper claim requesting reimbursement for eligible, out-of-pocket expenses, or you can file a claim and upload supporting documents online at www.dbsbenefits.com. View a detailed list of health care expenses that may or may not qualify for reimbursement.
Dependent Care Flexible Spending Account
You may receive tax-exempt reimbursements for the care of certain individuals in your household, which includes your dependent children age 12 or younger and any other individuals who reside with you and who rely on your for at least half of their support or are physically or mentally unable to care for themselves. The IRS states that if you are married, both you and your spouse must be employed in order to utilize the Dependent Care FSA. You must file manual claims directly with DBS to be reimbursed. A debit card is not issued for the Dependent Care FSA.
Eligible Dependent Care Account expenses include:
- Day-care costs
- Schooling costs, not including food and clothing, for either private or public schools, for children not yet in kindergarten
- If expenses for food and clothing cannot be separated from the total cost of child care, then they are eligible expenses
- Before/after-school care
- Babysitting and licensed day-care center costs
- Housekeeping services in your home that include daycare
- Elder care if dependent is claimed on your tax return
- Costs of transportation, overnight camping, nursing care facilities, and the schooling costs of children in the first grade or above are generally ineligible expenses
How Much to Contribute?
You must determine an annual target amount (maximum limits apply) to be withheld by forecasting your out-of-pocket health care and/or dependent care expenses for the entire plan year (January 1 -December 31). If you enroll in the FSA, you will be provided with a Debit Card that is pre-loaded with your elected amount to use throughout the Plan Year. Dependent Care participants must file manual claims.
Your annual target is then deducted from your paycheck in equal installments. The deduction is made before taxes are computed, thus making the spending account dollars tax-free. There is no tax liability on the money put into either the health care or dependent care spending account or on the money reimbursed through these spending accounts.
Use this worksheet to estimate your out-of-pocket expenses. Remember that IRS regulations state that if all the money in the account is not used by the end of the Plan Year, the remaining balance must be forfeited (known as the “Use-it-or-Lose-it rule”).
How to Utilize the Contributions?
To access the money in your account, you can either use your FSA Debit Card at the time of service, or you can file a claim requesting reimbursement for eligible, out-of-pocket expenses. Please see Online Claims Filing Instructions for more information. Please be aware that reimbursement checks issued from DBS have a 180-day expiration date.
Reimbursements for Dependent Care expenses can be accessed by mailing/faxing claim forms to DBS, submitting claim information online or submitting via the DBS mobile phone application.
You can only make mid-year changes to these accounts if you experience a qualifying event as defined by the IRS.
Note: You must re-enroll in the Flexible Spending Account(s) each year during Annual Enrollment. Your FSA enrollment will not automatically carry over from year to year. If you choose not to re-enroll during annual enrollment, your account will automatically cancel on December 31.
Is there a Grace Period?
There will be a grace period immediately following the end of the Plan Year for both Health Care and Dependent Care Spending Accounts. This extension will provide participants additional time to incur expenses for reimbursement from the previous year’s account. The grace period will be available after the end of the Plan Year from January 1st through March 15th. All claims incurred during the grace period must be filed no later than April 15th.