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Flexible Spending Accounts (FSAs)

What is an FSA?

FSAs allow you to pay for many medical or dependent care expenses with pre-tax dollars!
To learn more about FSAs, try this site, or Wikipedia's overview, or any number of resources you can find with a basic Google search.

Why choose to participate in an FSA?

By paying for your medical or dependent care expenses with pre-tax dollars, you save on Federal, State, and Social Security taxes.  You can save $25 or more for every $100 you set aside.

Savings will vary for each participant depending on variable information such as marital status, number of exemptions, and marginal tax bracket. Consult with your tax advisor to determine your actual potential savings. Put More Money in Your Wallet

How does our FSA work?

This program is sponsored by the Arizona Board of Regents (ABOR) which oversees the three state universities. For a comprehensive plan description, click here.

You decide how much to contribute to the account for the entire plan year (January 1 - December 31). There are two accounts available to employees, the Health Care FSA and the Dependent Care FSA.  The annual maximum is $5,000 for either account and whatever amount you elect for 2012 is deducted from your paychecks pre-tax in equal amounts over the course of the 2012 plan year. Expenses MUST be incurred during the plan year to be eligible for reimbursement.  This is also a "use it or lose it" program - Any unused funds remaining in your account at year end will be forfeited.

Note: The IRS does NOT recognize a same sex domestic partner for tax purposes.  Expenses of a Qualified Domestic Partner do NOT generally qualify for the Health Care FSA unless they qualify as a dependent under the definition of a "qualifying relative." 

In order for an individual to be considered a “qualifying relative,” he or she must: Be a blood relative or share the same primary residence with the taxpayer if not a blood relative. Receive over half of his/her support from the taxpayer; Be a U.S. citizen or national or a resident of the United States, Canada or Mexico.

If you have a domestic partner who qualifies as a tax dependent, please notify ASIFlex in writing of your situation and your account will be reviewed for eligibility.

Frequently Asked Questions

Information About the Debit Card Option ($12/year, deducted from your annual pledge amount)

More information on FSAs

What's the difference between an FSA and an HSA?

Click here for an answer!

When am I eligible for FSA to begin?

FSA contributions and participation begins the first day of the pay period following any benefits waiting period.

If you are a current employee, and wish to enroll in an FSA, you must do so each year during open enrollment. The FSA will become active on January 1st of the next calendar year.

For current employees who experience a qualified life event (QLE), FSAs become effective the first day of the month following benefit change submissions. Thus, for changes in this benefit to take effect as quickly as possible, you are encouraged to submit your QLE-related benefit changes at the earliest possible opportunity following the QLE date. (See the Qualified Life Event page for more information)

Can I make changes to my pledged amount, or add or drop-out of the FSA program mid-year?

The IRS rules that allow mid-year changes in a Health Care FSA are much more restrictive that otherwise permitted for enrollment under a pre-tax health insurance plan or a Dependent Care FSA. While you may be allowed to make changes to other coverage options under some of the situations listed below, changes to your Health Care FSA are not permissible if:

  • You move inside or outside of an HMO service area and change your health insurance option.
  • Your annual earnings decrease due to a change in your appointment percentage or other job change, and you still remain eligible to participate in the University's Health Care FSA.
  • Your anticipated health/dental/visions costs increase or decrease due to unanticipated factors. Some examples include the following situations:
  • You funded your FSA with an expectation of having LASIK eye surgery and were advised you were not a good candidate for surgery.
  • You funded your FSA with an expectation of having extensive dental work done. Schedule issues by your dentist's office resulted in the needed work to be carried over several months, and all of the work could not be completed before the end of the plan year.
  • You funded your FSA with an expectation of having limited out-of-pocket expenses for the year. Midway through the year, your dependent required outpatient mental health treatment that was only partially covered by your health plan, resulting in significant out-of-pocket expenses.
  • You funded your FSA with an expectation of continued use of a particular prescription drug at a fixed co-pay, amount. Your physician determined it was necessary to change the medication to a drug with a higher co-pay, or your condition improved and you no longer needed to take the drug.

These are but a few examples, but they share one common theme the IRS has ruled on: The employee's intent when signing up for a Health Care FSA is not relevant. The Health Care FSA remains available to reimburse out-of-pocket medical expenses and a mid-year change is not allowed under these circumstances. Please keep this in mind when deciding how much to contribute to a Health Care FSA. You forfeit any contributions you cannot claim.

The table below lists permissible events that allow you to make a mid-year change in your Health Care FSA and the corresponding election change that may be made. You must contact the HR/Payroll Service Center within 30 days of the event and be prepared to provide documentation of the change upon request.

Change in Status Event Changes You May Make to Your Health Care FSA
Change in Your Legal Marital Status
(marriage; death of spouse; divorce; or annulment)
  • If you marry, you may increase your election when a family member is added; or decrease your election if: (i) you, your spouse or dependents become eligible under your new spouse's employers' health care FSA plan; and (ii) your spouse is a participant in his or her employer's plan, and (iii) coverage for the affected individual becomes effective or is increased under the other employer's plan.
  • If you cease to be married, you may decrease your election for your former spouse who loses eligibility. You may enroll in or increase your own election only if you have lost coverage under your former spouse's health care FSA plan.
Change in Number of Your Tax Dependents
(birth; death; adoption; or placement for adoption)
  • If you gain a dependent, you may enroll in or increase your election for the newly acquired dependent.
  • If you lose a dependent, you may decrease your election for the dependent who loses eligibility.

Changes in Employment Status that affect eligibility of the employee, the employee's spouse, or the employee's dependent (termination or commencement of employment; strike or lockout; commencement of or return from an unpaid leave of absence)
  • If you terminate employment or go on an unpaid leave of absence, you may change your election amount or terminate coverage if some other qualifying change in eligibility occurred during that leave.
  • If you return from unpaid leave of absence, you may start an account or change your election amount if some other qualifying change in eligibility occurred during the leave.
  • If your spouse terminates employment, or goes on an unpaid leave of absence, you may enroll in or increase your election if your spouse or dependent loses eligibility for participation in their employer's health plan.
  • If your spouse or dependent commence employment or returns from an unpaid leave that triggers a gain in eligibility under his or her employer's plan, you may decrease your election if your spouse or dependent gains eligibility and enrolls in his or her employer's health plan.
  • For employees enrolled in a Health Care FSA, an increase in hours does not allow you to change your Health Care FSA.
Dependent satisfies or ceases to satisfy eligibility requirements (gain or loss of dependent status as defined by IRC Section 152)
  • If your dependent gains eligibility, you may enroll in or increase your election to take into account the expenses of the affected dependent.
  • If your dependent ceases to be eligible, you may decrease your election to take into account the ineligibility of the expenses of the affected dependent.
Certain Judgments, decrees, or court orders

If a judgment, decree, or court order from a divorce, legal separation, annulment, or change in legal custody requires that accident or health coverage for your dependent child (including a dependent foster child) be provided by:

  • you, you may change your Health Care FSA election to provide the child with corresponding coverage.
  • your spouse, former spouse, or other individual, you may change your Health Care FSA election to decrease corresponding coverage for the child if the other individual actually provides the coverage.
Eligibility for Medicare and Medicaid

If you, your spouse, or your dependent:

  • are enrolled in the University's medical benefit plan, and become entitled to and enroll in Medicare or Medicaid (other than coverage solely for pediatric vaccines), then for that individual you may decrease your Health Care FSA election, if the Medicare/Medicaid coverage is more comprehensive -- or increase it if the NAU coverage was more comprehensive.
  • lose eligibility for Medicare or Medicaid, then for that individual you may increase your election -- or decrease it where the University's plan is more comprehensive.

 

Plan Adminstrator - ASI

ASI is the plan administrator of the FSA's. For specific questions about your FSA, please contact ASI.

Much more information on eligible expenses, claim forms, required documentation, and more is available on the ASI web site.

Phone: (800) 659-3035
Email: asi@asiflex.com

What if I leave NAU in the middle of the plan year, and want to continue with my FSA?

See this information on FSA COBRA Continuation of Coverage

 
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