Officers - Flexible Spending Accounts
Flexible Spending Accounts (FSAs) allow you to contribute pre-tax money to reimburse yourself for eligible healthcare and dependent day care expenses. You must enroll within 31 days of hire or a Qualified Life Status Change and you must also re-enroll each year during Benefits Open Enrollment to take advantage of FSAs.
What you need to know:
- You can use all unused 2020 FSA funds through December 31, 2021.
- The complete balance of unused Healthcare and Dependent Care FSA funds from 2020 rolled over into 2021.
- All unused 2021 Healthcare and Dependent Care FSA funds will roll forward into 2022.
- The 2021 Dependent Care FSA annual election amount has temporarily increased from $5,000 to $10,500.
- Dependent care FSA eligibility age has been temporarily raised from 13 to 14, for 2020 funds, for use in 2021.
- Prescriptions are no longer required for certain over-the-counter (OTC) drugs and medications, and menstrual care products are now considered qualified medical expenses.
FSAs allow you to set aside pre-tax money to reimburse yourself for eligible expenses. Since your FSA contributions reduce your gross taxable income, you pay lower taxes and take home more money.
If you elect an FSA, you contribute to it in equal installments each pay period throughout the calendar year. You cannot change your election amount during the calendar year unless you have a Qualified Life Status Change. Please refer to “Making Changes to Your Benefits” for more details.
Keep in Mind
If your medical expenses exceed 7.5% of your adjusted gross income and you itemize deductions, you may be better off deducting your expenses from your income tax. You may want to consult with a tax adviser or financial professional to determine which works best for you. Also, you may use the Dependent Care FSA, the federal tax credit or a combination of both for your eligible dependent care expenses.
Your choice will depend on your family income and the number of dependents you have in eligible day care programs. Generally, if your family’s adjusted gross income exceeds $40,000, you may save more in taxes using the Dependent Care FSA. Please consult your tax adviser for additional guidance.
A Healthcare FSA helps you pay for eligible healthcare expenses, including medical, prescription drug or dental copays and deductibles, as well as vision or hearing services. For a list of eligible expenses, please visit myuhc.com or www.irs.gov (Publication 502)
The current IRS limit for the Healthcare FSA is $2,750* You can elect between $120 and $2,750* in this account to cover out-of-pocket eligible healthcare expenses for yourself, your spouse and your children, even if you do not elect to cover them under a University medical plan. However, a dependent's expenses only qualify if he or she is claimed on your taxes. The full annual election amount is available for claim reimbursement as of your account's effective date.
If you are hired after January 1, you can elect to contribute the maximum contribution limit ($2,750*) provided you have not contributed during the year to an FSA with Columbia University. If you are married, your spouse may also contribute $2,750* to an FSA sponsored by his/her employer.
Note: If you have a balance of $550* or less rolled over from your Healthcare FSA from 2020, you will automatically be enrolled in a Healthcare FSA in 2021.
*IRS limits are subject to change.
A Dependent Care FSA helps you pay for eligible child or adult day care expenses for your dependents, such as licensed day care centers and nursery schools, before school or after-school programs and home attendants.
Note: for dependents’ health-related expenses, use the Healthcare FSA.
The Dependent Care FSA helps you pay the cost of dependent day care services for an adult or child because you work or attend school. If you are married, your spouse must also work or go to school while you are at work in order to qualify for this coverage. You can contribute up to $5,000* to a Dependent Care FSA.
If you are married, the IRS has several guidelines that might affect how much you can deposit:
- If your spouse also has a Dependent Care FSA at work and you file a joint tax return – your combined deposits cannot exceed $5,000*
- If you are married and file separate income taxes – the most you can contribute is $2,500*
- If your prior year W-2 earnings exceed $130,000* – Columbia Benefits may contact you to inform you whether your contributions must be capped as a result of mandatory IRS testing
You can be reimbursed for the cost of services provided for:
- Dependent children under the age of 13. If your child will turn 13 during the year, you can submit claims only for expenses incurred up to the child’s birthday. You may be eligible to disenroll from the Dependent Care FSA once your child reaches age 13 as part of a Change in Dependent Care Cost
- Other dependents, including a parent, spouse or spouse’s child who is physically or mentally unable to care for himself or herself and who qualifies as a tax dependent
Your reimbursement for dependent care cannot exceed the balance in your account at the time of your claim. If the money in your account is insufficient to pay your claim, the balance will be paid later as your pre-tax payroll contributions accumulate in your account. When you incur an eligible dependent care expense, you can use your Health Care Spending Card to pay for the expense at participating locations. The card will only accept expenses up to the balance in your account at the time of use.
Eligible Dependent Care Providers:
- Qualified child or adult day care centers
Summer day camps
- Nursery schools, pre-schools, before-school and after-school programs
- Person who cares for an elderly or disabled person that you claim as a dependent on your tax return
Note: You must be able to identify the name, address and Social Security Number (SSN) of the person who provides the dependent care. If you use a child or adult day care center, you must simply provide the Taxpayer Identification Number.
For additional information, see IRS Publication 503.
Eligible Officers can elect to receive up to a $4,000 contribution from Columbia to a Dependent Care FSA. If you elect this benefit during the year because of a Qualified Life Status Change, you will receive a prorated portion of the benefit.
To be eligible for this benefit, you must meet all of the eligibility criteria below:
- Be a full-time, benefits-eligible Officer with an Annual Benefits Salary of less than or equal to $130,000*
- Have a dependent child under the age of five and not yet attending kindergarten who:
- Has been verified by the Columbia Benefits Service Center as an eligible dependent; and
- Meets the IRS definition of a tax dependent
- Elect to participate in the Child Care Benefit as a new hire, during the annual Open Enrollment period or if you experience a Qualified Life Status Change.
There is a limit of a single benefit per family regardless of the number of eligible children, and regardless of whether both parents are eligible employees.
If you receive the Child Care Benefit, you can also contribute personal pre-tax payroll contributions to your Dependent Care FSA. The total contributions between the Dependent Care FSA and the Child Care Benefit cannot exceed the $5,000* annual maximum.
*IRS limits are subject to change.
- Do I need to be in a specific medical plan to participate?
- No, you can be enrolled in any of the University’s medical plans, or have coverage from another source.
- Yes, you must be enrolled in the University’s HDHP medical plan to participate.
- Is there an IRS maximum annual
Those 55 and older can contribute an additional $1,000* annually.
- When will my annual election be available?
- The full annual election amount is available for claim reimbursement as of your account’s effective date.
- HSA funds are sent as soon as administratively possible after each payroll to Optum Bank.
- Will my savings roll over each year?
Up to $550 for Healthcare FSA*
- Will I earn interest on my savings?
- Are withdrawals for eligible expenses
- Will I get a debit card?
- Do I keep the money if I leave the University?
Option to continue Healthcare FSA only through COBRA
- Can I also have an FSA?
Dependent Care FSA only
* IRS limits are subject to change.
Important IRS Note
The IRS does not permit you to elect both a Healthcare FSA and an HSA. If your spouse has one of the two—for example, through another employer—you cannot elect another type of tax-savings account.
If you have a balance of $550* or less rolled over from your Healthcare FSA from 2020, you will automatically be enrolled in a Healthcare FSA in 2021. However, if you would like to contribute the maximum allowable amount in 2021, you must enroll in the Healthcare FSA during Open Enrollment.
*IRS limits are subject to change.
After you elect an FSA, UHC will mail you two Health Care Spending Cards in your name. These cards are linked to the Healthcare and Dependent Care FSA accounts you elect.
When you incur an eligible healthcare or dependent care expense, such as prescription drugs or office visit copays, you can use your Health Care Spending Card to pay for the expense at participating locations.
If you do not use your card at the time of purchase, keep your receipt(s). You may need to submit an out-of-network medical claim to UHC so you can 1) be reimbursed for the out-of-pocket expense from your FSA; and/or 2) to substantiate your expenses with UHC if you are manually filing a claim.
If you are enrolled in a University-provided medical and/or dental plan, you will be automatically reimbursed for most medical, prescription, vision and dental out-of-pocket expenses. This convenient automated feature processes claims—and then automatically sends Healthcare FSA participants reimbursement checks for their out-of-pocket costs if those claims were submitted to the Columbia University health plans.
Opting out of automatic reimbursement
If you prefer to manage your FSA funds and choose which expenses are reimbursed, you can opt out of the claim auto-rollover at any time by logging in to www.myuhc.com. If you opt out, you will need to file reimbursement claims online or manually with UHC. Note: You must opt out of the claim auto-rollover each year.
IRS regulations do not allow you to use FSA funds for expenses incurred by or on behalf of same-sex domestic partners, or their children, unless they qualify as your legal tax dependents.
The IRS has strict rules regarding FSAs. It is important to estimate your expenses carefully, incur your expenses by December 31 and make sure that your claims for the calendar year are received by UHC, the FSA administrator, no later than March 31 of the following year. A balance of up to $550* in your Healthcare FSA can be rolled over to the next plan year if you do not enroll in an HSA. However, any money left in your Dependent Care FSA will be forfeited.
*IRS limits are subject to change.
If you are covered under a Columbia-provided medical plan:
- Go to myuhc.com and click on “Register Now.” Your UHC ID card includes information you will need to register. Or, you can register using your Social Security Number and date of birth.
- Click on “View Account Balances,” then select “Flexible Spending Account(s).”
Don’t Have a Health Plan with UHC?
You do not need to be a member of a Columbia health plan to participate in an FSA. To manage your FSA expenses, you can register using your Social Security Number as your member ID and date of birth. Under group/policy number, enter “902784.”
Select from hundreds of health products at the Optum Store. Regardless of medical plan enrollment, you may use your Flexible Spending Account (FSA) and Health Savings Account (HSA) benefit.
The online store carries over-the-counter medications and physical health products, including:
- Cold, allergy and sinus
- Feminine care and family planning
- Baby and childcare
- Diagnostic test kits
- High-tech health devices
Have questions? FAQs have you covered.
Important Note on Leaving the University
If you leave the University or become ineligible for benefits, you can only be reimbursed for expenses incurred prior to your employment end date or the date you become ineligible for benefits. Any remaining funds would be forfeited.