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University Business Policies and Procedures Manual |
3650
FLEXIBLE SPENDING ACCOUNTS PROGRAM
Effective Date: January 1, 1990
Revised: 01/01/93, 08/23/99, 05/22/06, 01/01/12
Subject to Change Without
Notice
Authorized by Regents' Policy 6.3 "Privileges and
Benefits"
Process
Owner: Vice President for Human Resources
1. General
The University has a Flexible Spending Accounts (FSA) Program which allows eligible employees to set aside a portion of their annual salary to pay qualified unreimbursed medical expenses and qualified dependent care expenses incurred during the year before taxes are calculated. Described herein are policies pertaining to the FSA Program. The FSA Plans booklet explains the Program in more detail and is available from the Employee Benefits Office of the University Division of Human Resources. The Employee Benefits Office is located at the UNM Human Resources Service Center.
2. Authority
The FSA Program is a fringe benefit authorized by the Internal Revenue Code and regulated by the Internal Revenue Service (IRS). IRS regulations define which expenses qualify for reimbursement under this plan. Nothing in this policy shall impose or limit requirements which may be otherwise imposed by law. Exceptions to the regulations governing this Program cannot be granted by the University. Tax law changes may affect this Program.
3. Flexible Spending Accounts
Employees can participate in the FSA Program by setting aside part of their pay on a before-tax basis to:
- Set up
a Medical
Reimbursement Account to pay certain qualified medical, dental,
prescription, vision, and hearing care expenses for eligible employees or
their eligible dependents that are not covered by insurance plans. IRS
identifies qualifying medical expenses in Publication 502, which is
available from any IRS office. Examples of qualified medical expenses are
listed in the FSA Plans booklet.
- Set up a Dependent
Care Spending Account to reimburse the employee for dependent care
at a licensed facility, services from unrelated individuals, care at
dependent care centers, and other qualified dependent care expenses.
The money an employee sets aside for the FSA Program will be subtracted from his or her gross pay before income and Social Security taxes are calculated, thus reducing taxable income. Employees choose how much to contribute. The annual contribution amount chosen is equally divided into pay-period deductions. To be reimbursed for eligible expenses, the employee must submit claims to the University's FSA administrator.
Since individual circumstances vary, participation in an FSA Program does not always mean tax savings. Employees must decide for themselves if the Program is advantageous to them. The Employee Benefits Office can assist an employee in evaluating the benefit of participation.
3.1. Plan Year
The plan year for the FSA Program begins on January 1 and ends on December 31. Continued participation requires active enrollment each year.
4. Eligibility
The following employees are eligible to participate:
- Regular staff employees at .50 or greater FTE.
- Faculty at .50 or greater FTE, for at least one (1)
academic year.
- Post Doctoral Fellows at .50 or greater FTE for at least
one (1) academic year.
5. Enrollment
Employees may enroll and re-enroll in the Program during the open enrollment
period. New eligible employees
may enroll in the Program no later than sixty (60) days following the date of
employment.
6. Related Links
Forms can be found on the HR
website forms page.
Comments may be sent to UBPPM@UNM.edu
http://www.unm.edu/~ubppm