FAQs: Spending Accounts

How much money can I set aside in my account?

The dependent care and healthcare spending account maximum is $5,000 per family per year. The maximum claim that can be submitted for reimbursement at any time is $5,000 and the minimum is $10.

How often will I be reimbursed?

All claims received by PAYFLEX before 11:59 pm (Eastern Standard Time) every Tuesday, will be processed and mailed Thursday. Claims may be mailed or faxed to PAYFLEX. The claim deadline is Monday when Wednesday or Thursday is a Federal holiday.

Will I be able to fax my claims on a college fax machine ?

Yes, the College is committed to allowing individuals use of fax machines to submit claims for flexible spending account expenses. Human Resources will also be glad to assist individuals in completing and faxing claims forms.

How will I be reimbursed?

Individuals with direct deposit for their paychecks will be continue to be reimbursed by PAYFLEX through direct deposit. The Human Resources department will provide all the banking information to PAYFLEX. Individuals still receiving a paycheck will be reimbursed by check from PAYFLEX and the check will be mailed to your home. We strongly encourage everyone to enroll in direct deposit as it is easier, quicker and a more secure way of receiving both your paycheck and reimbursements .

What happens to my account balance if I don't use all the money deposited for the current Plan Year?

The IRS "use it or lose it" rule states that you will forfeit any money left in your account after your grace period has expired. So, please remember to check you account balances through PAYFLEX's website. Individual account balances are updated after each reimbursement and privacy is assured through log on and password protection.

How long are medical notes kept on file?

Medical notes are kept on file for one minimum of one year. However, we do require an updated medical note each year.

Can I change my elections during the plan year?

Yes, but only if you have a change in status.

What happens if I terminate employment?

Dependent Care Accounts

Your deductions will cease when you leave the College. You may send in claims incurred before and after your termination date for qualified dependent care expenses in order to exhaust the positive cash balance. These expenses should be sent to PAYFLEX for processing by the end of the benefit's plan year.

Health Spending Accounts

Your deductions will cease when you terminate employment. If you have a positive cash balance, your FSA is a COBRA eligible benefit and you will have two options when you leave your employer:

  1. You may decline COBRA. You may continue to use funds for any expense incurred prior to your termination date.
  2. You may elect COBRA. This option requires you to pay the monthly deduction to your employer on an after tax basis. By doing this, you are entitled to send in claims for reimbursement for expenses incurred after your termination date until one of the following occurs:
    • The plan year ends
    • Funds are exhausted
    • You cease to continue the COBRA benefit

What records should I keep for tax purposes?

You should maintain the same record keeping procedure that you currently use for preparing year-end tax returns.

What do you mean by "incurred" expenses?

Expenses are considered incurred on the date medical or child care is rendered. Expenses must be incurred in the plan year for which you are requesting reimbursement.

What happens if I have a claim incurred during the Plan Year and I don't submit it before the last day of the Plan Year?

You have a grace period, usually 90 days after the end of your plan year, to submit claims in our office. Swarthmore's plan year runs from November 1st to Ocotber 31st and all claims must be submitted for a prior year by January 31st.

Will I be able to change the amount of money I set aside in my account(s) during the Plan Year?

The answer is no unless you change your elections in mid-year because of a change in status.

How will salary reductions affect my Social Security Retirement Benefits or Earned Income Tax Credits?

Your wages reported to the Social Security Administration will be reduced, and therefore your expected Social Security retirement may also be reduced. This reduction is minimal and if the tax savings are used for savings or retirement they will more than offset the loss. Individuals who can claim the Earned Income Tax Credit (EITC) should consider the impact their dependent care expenses would have on their EITC eligibility.

Can I move money from my dependent care account to my healthcare spending account?

No.

Can I use the dependent care account if my provider is not reporting the fees to the IRS?

No.

What type of Healthcare expenses are not covered?

Teeth whitening, health clubs, hair transplants, cosmetic surgery, and any expenses for which you receive benefits from another insurance plan. A full list of eligible expenses can be found on the PAYFLEX's website at http://www.payflex.com/

May I use this account to pay for my spouse's deductibles and co-payments if they are not covered by my group medical plan?

Yes. However, health insurance premiums deducted from your spouse's paycheck or COBRA premiums may not be reimbursed through your healthcare FSA.

If my child's 13th birthday is this year, may I use the dependent care FSA for the entire year.

No, only the expenses you incurred before your dependent child reached the age of 13 are eligible for reimbursement.

Are expenses for before school and/ after school care covered?

Yes. You must separate the cost of the before and after school care from the cost of the school if your child is under the age of 13.

Do I have to complete IRS form 2441 if I am using the dependent care FSA through my employer in lieu of the child care tax credit on my federal tax return?

Yes. Instead of completing Part 1 and Part 2, you would complete Part 1 and Part 3 of the form 2441.

Do FSA's comply with IRS regulations?

Yes. The plan is in compliance with Section 125 of the Internal Revenue Code and Regulations.