Flexible Spending Accounts

• May be used by benefits-eligible employees not enrolled in the Basic Health plan option
• Helps offset out-of-pocket health care expenses, such as copayments, deductibles, coinsurance, and certain over-the-counter medications
• Full amount of annual contributions available after your first paycheck of 2024

• Available for Basic Health participants
• Helps offset out-of-pocket dental and vision care expenses; may be used in combination with a health savings account
• Full amount of annual contributions available after your first paycheck of 2024

• Funds available after they have been put into your account (meaning the amount increases as additional contributions come from your paychecks)
• May be more beneficial than the federal dependent care tax credit for most individuals whose adjusted gross income is greater than $25,000 (consult a tax professional for an assessment of your personal situation)

For example, setting aside $5,000 in a Dependent Daycare Reimbursement account enables you to spend the whole $5,000 on daycare. Receiving the $5,000 in pay would leave roughly $3,500 after taxes for daycare expenses.

In general, to be eligible for FSAs (including Dependent Daycare Reimbursement Accounts), you must be a full- or part-time benefited UVA employee, and regularly scheduled to work at least 20 hours/week. To be eligible for FSAs, you must be:

• Faculty
• Classified Staff
• Medical Center Team Member
• Postdoctoral Research Associate
• Senior Professional Research Staff
• University Staff
• Housestaff

Mandatory Direct Deposit: For all paper claims, direct deposit is required. If you are a new enrollee, you must provide direct information on your personal Fidelity account for reimbursement of all non-NetBenefits Access Card transactions. 

UVA offers two types of FSA: Full and Limited. Your UVA Health Plan option determines which type of FSA you are eligible for.

• Choice or Value Health participants may enroll in the Full FSA, which can be used for eligible medical, dental, and vision expenses.
• Basic Health participants may enroll in the Limited FSA, which can be used for eligible dental and vision expenses. They can also enroll in a Health Savings Account, which can be used for eligible medical, dental, and vision expenses.
• Benefited employees who work at least 20 hours/week and who waive UVA coverage may enroll in the full FSA, which can be used for eligible medical, dental and vision expenses.

To be eligible for a Dependent Daycare Reimbursement Account, your dependents must meet one of the following criteria:

• Are under age 13 at the time of service and are claimed as dependents on your taxes.
• Are unable to care for themselves, such as adult children with disabilities or elders. (These dependents are eligible regardless of age.)

All dependents must live with you for more than half the year for you in order to use funds from a Dependent Daycare Reimbursement Account for their care.

Note: A Dependent Daycare Reimbursement Account may be more beneficial, in terms of a tax benefit, than the federal dependent care tax credit for most individuals with an adjusted gross income > $25,000. Consult a tax professional for an assessment of your personal situation.

For both limited and full FSAs, the following annual contribution information is the same:

Minimum: $120

Maximum: $2,500

The following are the annual contribution limits:

Minimum: $120

Maximum: $5,000 (household limit)

When choosing how much to contribute, try to anticipate dependent eligibility changes. For example, if your child will be turning 13 mid-year, plan your contributions accordingly so you don’t over-contribute for a full year of care.

UVA’s FSAs and health savings accounts (HSAs) are managed by Fidelity.

Full FSA

The Full FSA contribution amount you choose for the year is available as soon as the account is open and after your first paycheck of the year. The flexibility to spend planned FSA contributions before they accrue can be helpful. Payroll deductions for the FSA would continue through the remainder of the year.

For example, if you choose to put $500 in a limited health care FSA for the year, you would be able to use that full $500 for eligible dental and vision expenses after the first paycheck of the year. 

FSAs opened during the year for new hires and qualified life events are effective the first of the month after the enrollment is processed. The full contribution amount you choose for the remainder of the year is available after your first benefits-deduction paycheck of the month in which coverage is effective.

Dependent Daycare Reimbursement Account

Dependent Daycare Reimbursement Account funds are available after they have been deposited in your account by payroll deductions each paycheck. It takes a few bank days after payday for payroll-deducted funds to show in your account.

These funds must be used by the end of the calendar year. However, UVA has a grace period of 2 1/2 months. This allows you to spend FSA money through March 15 of the following year. After the grace period ends, you will lose any remaining money in your FSA account. 

Mandatory Direct Deposit: For all paper claims, direct deposit is required. If you are a new enrollee, you must provide direct deposit information to Fidelity for reimbursement of all non-NetBenefit Card transactions. You can enter your direct deposit information on your personal Fidelity account. 

Failing to coordinate your FSA contribution amount with that of your spouse is not a qualified life event. You will not be able to change your election if you discover that your combined Dependent Daycare contributions exceed the IRS maximum. The resulting overcontribution can be addressed when filing your tax return.

Be sure your spouse does not open a Full Healthcare FSA during the same calendar year in which you are enrolled in the UVA HSA Program. If this or any other coordination issue between you and your spouse or other family members occurs, you will not be able to cancel or reverse your elections or make retroactive changes to your contributions or deductions to remedy any tax problems that might result.

• When you open an FSA/Limited FSA, you will receive your prepaid benefits card, the NetBenefits Access Card, in the mail to your home address. If you have more than one type of account such as a Health Savings Account (HSA), this one NetBenefits Access Card will draw from either of your accounts, and it automatically decides which account to draw from based on the purchase. (Participants in the Dependent Daycare Reimbursement Account will not use a NetBenfits Access Card for payment and will need to submit dependent daycare receipts for reimbursements to Fidelity.)
• If you have concerns about not receiving your card or questions about how to use your card, please contact Fidelity for more information by calling 833.299.5089.

An eligible expense is any healthcare expense approved by the IRS for reimbursement through an FSA. Reimbursements are only issued for eligible expenses incurred by the employee, their spouse or their eligible dependents. Expenses that occur before the beginning of the FSA plan year are not eligible.

Flexible Spending Account Eligible Expenses

The Limited FSA allows dental, vision and preventative care expenses to be paid for on a tax-free basis. The expenses are limited so that an employee can be enrolled in a Health Savings Account at the same time. Reimbursements are only issued for eligible expenses incurred by the employee, their spouse or their eligible dependents. Expenses that occur before the beginning of the FSA plan year are not eligible.

The Dependent Daycare FSA allows certain out-of-pocket daycare costs to be paid on a pre-tax basis. Services must be provided while the employee and their spouse are at work, looking for work or attending classes as a full-time student. Expenses that occur before the beginning of the FSA plan year are not eligible.

Fidelity NetBenefits Flexible Spending Account and Reimbursement Account services guide

Basic Health participants may have a limited FSA for eligible dental and vision expenses. For medical services and prescription costs, you must use HSA funds. Basic Health participants may not have a full health care FSA. Fidelity also administers UVA’s FSAs, so you can use the information above to log in to see your FSA information as well as HSA details.

For FSAs, the full contribution amount you choose for the year is available as soon as the account is open. For example, if you choose to put $500 in a limited health care FSA for the year, you would be able to use that full $500 for eligible dental and vision expenses after the first paycheck of the year. Payroll deductions for the FSA would continue through the remainder of the year.

What happens to the money in my account(s) if I terminate employment or enrollment in the FSA Program during the plan year?

• For a dependent daycare FSA, if there is a balance in your account when your employment or enrollment ends, your benefit termination date is the last day of the month in which you terminate enrollment or employment. You can file claims for eligible daycare expenses incurred before your benefit termination date. You must file these claims before April 30th of the following calendar year. If you do not have any eligible expenses to be reimbursed, the balance in your account is forfeited.
• For a healthcare FSA, if there is a balance in your account when your employment or enrollment ends, your benefit termination date is the last day of the month in which you terminate enrollment or employment. You can file claims for eligible health care expenses incurred before your benefit termination date. You must file these claims before April 30th of the following calendar year. If you do not have any eligible expenses to be reimbursed, the balance in your account is forfeited.
• For a healthcare FSA, you may also elect to continue participation in the FSA Program until the end of the plan year as a COBRA participant.
  • You will be responsible for paying your current election, an account administrative fee, and the COBRA administrative fee of 2% on a monthly basis.
  • This monthly payment will be due on or before the first of each month through the end of the current plan year.
  • You will receive enrollment information from Fidelity if you are eligible for enrollment in a COBRA healthcare FSA.

All active, benefits-eligible employees enrolled in Basic Health are able to have a Health Savings Account (HSA). Funds in your HSA can be used for eligible health care, dental, and vision expenses. Funds in these accounts roll over each year and are yours to keep for future health care costs.

If you are enrolled in a Health Savings Account, you are not eligible for a Full Healthcare Flexible Spending Account, but you can enroll in a Limited and/or Dependent Daycare Flexible Spending Account to maximize your savings.

A Flexible Spending Account (FSA), makes it possible for you to pay for certain expenses on a pre-tax basis, which makes your money go farther.

Here are resources to help you learn more:

• Fidelity NetBenefits Flexible Spending Account and Reimbursement Account services guide
• HSA webpage

A grace period provides you with an extra 2 1/2 months to spend last year's money. UVA offers a brief grace period into the following year, so you will have until March 15th to incur expenses. The deadline to submit claims is April 30th. 

The Full Flexible Spending Account, Limited Flexible Spending Account, and Dependent Daycare Reimbursement Account do have grace periods to spend the money beyond year's end if you are enrolled in the FSA or DCA program on December 31st of the plan year. 

The expenses must be used for eligible services and the expense must be incurred during the calendar year for which the account was opened or during the 2 1/2 month grace period from January 1st to March 15th of the following calendar year. The grace period is designed to give you an opportunity to incur expenses and use all the funds in your account if you contributed more than was actually needed for the calendar year. 

If you are switching from Value Health or Choice Health to Basic Health and you have an FSA, then you will be closing your FSA. You will need to have a balance of $0.00 in your FSA by January 1, 2024 to open your HSA. Otherwise:

• Your HSA cannot be opened, and you will not be able to make employee contributions until April 1, 2024
• Deposited funds will become available for use on the third bank day after payday
• You will not be able to use money in your account to cover any expenses incurred prior to April 1, 2024

What happens when a claim is rejected at the end of the year when switching from FSA to HSA? 

If you have filed claims using your remaining FSA funds within the plans calendar year, there are times when some or all of a claim can be rejected. If rejected, the FSA contributions used for the claim are refunded to the account balance. Please provide yourself with enough time to submit and process claims before the end of the plans calendar year to prevent falling into the Grace Period.

Although there may be few exceptions, generally, employees can access their Fidelity portal and mobile app while abroad.

You can only make changes to your Healthcare and/or Dependent Care FSA during Open Enrollment or a QLE (must follow event type):

• Marriage, divorce, or annulment
• Birth or adoption/placement for adoption
• Loss of dependent eligibility
• Death of spouse or child
• Change in worksite (DCA QLE)

Examples:

• The employee experiences the birth or adoption of a child, and elects to increase their Healthcare and Dependent Care FSA
• The employee’s job location is changed, and childcare is no longer needed. The employee can stop their Dependent Care FSA

No.  The dependent care flexible spending arrangement is not for healthcare expenses.  Its purpose is to allow employees to exempt up to $5000.00 per household, from taxes, for the specific use of dependent day care expenses while working.  Expenditures may cover childcare costs for child dependents under 13 or for qualifying dependent adults residing with the employee.  Other restrictions apply regarding employee eligibility, expense eligibility, and compensation eligibility from dependent care FSA funds.