June> Special ANNUAL ENROLLMENT Edition for UT System Employees >IRS and Health Care Reimbursement Account & UT FLEX Dependent Day Care Reimbursement
UT FLEX Health Care & Dependent Day Care Reimbursement Account
Important: IRS Update Will Allow Maximum UT FLEX Health Care Reimbursement Account Elections to Remain $5,000 For Plan Year 2012-2013
A provision of the Affordable Care Act (healthcare reform) signed into law on March 23, 2010, reduced Health Care Reimbursement Account (HCRA) maximum elections to $2,500 per plan year, effective January 1, 2013. Since that time, the Office of Employee Benefits has been communicating the maximum election for UT FLEX HCRA participants would be reduced to $2,500 for the plan year beginning September 1, 2012.
The Internal Revenue Service (IRS) has recently issued a new guideline (IRS Notice 2012-40) which will have a positive effect for UT FLEX HCRA participants who wish to elect more than $2,500 for the 2012-2013 plan year (September 1, 2012-August 31, 2013). The new guideline states that the $2,500 limit does not apply for plan years that begin before 2013. Therefore, UT benefits eligible employees will be allowed to elect up to $5,000 during the July 2012 Annual Enrollment period, for an election effective date of September 1, 2012.
Please continue to watch for more communications regarding this latest development, as well as additional details regarding Annual Enrollment which begins on July 15, 2012.
UT FLEX Can Increase Your Spendable Income
Flexible spending accounts such as the UT FLEX* Health Care Reimbursement Account and the UT FLEX Dependent Day Care Reimbursement Account allow you to pay for certain out-of-pocket health care expenses and work-related day care expenses. You can pay these expenses with “pre-tax” dollars, which means you don’t pay federal income or Social Security taxes on this money.
UT FLEX Health Care Reimbursement Account (HCRA):
With the UT FLEX HCRA, you can set aside up to $5,000 in pre-tax dollars to pay for eligible health care expenses including:
- Deductibles, copayments, coinsurance,
- Prescription drugs, insulin and syringes,
- Dental exams, x-rays, fillings, crowns, orthodontia,
- Eye exams, prescription eyeglasses and prescription sunglasses,
- Contact lenses and cleaning solutions, and
- Hearing aids.
PayFlex Debit Card
Selecting the PayFlex Debit Card ($9 annual fee) with your HCRA gives you the advantages of:
- Improving your cash flow by having your entire annual election available on the debit card on the first day of the plan year (9/1/2012),
- You do not have to complete a claim form, and
- Purchases are automatically deducted from your available UT FLEX HCRA balance.
You can set aside pre-tax dollars (up to $5,000 per family per calendar year) to pay for eligible dependent day care expenses that allow you (and, if married, your spouse) to work, look for work, or go to school full time. Eligible expenses include:
- Summer day camp
- Before/after school care, and
- Preschool/nursery school for pre-kindergarten.
Find details about qualified dependents and eligible expenses at UTFLEX.com.
Need Help Determining How Much to Elect?
Use the savings calculator on UTFLEX.com to help you determine your annual election by itemizing your unreimbursed health and dependent day care expenses. Go to the UT FLEX website, click on the Savings Calculator tab, enter your annual estimated costs, and see the estimated savings!
Don’t forget—to participate in UT FLEX, you must make your election through the My UT Benefits online enrollment system during this year’s Annual Enrollment period (even if you are a current UT FLEX participant).
*There is an annual administrative fee of $12 for each UT FLEX account (HCRA and DCRA). The administrative fee is the first deduction from your UT FLEX account(s) and is prorated for mid-year elections.