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Kristi Gibson, a human resources business partner, enrolled in a Flexible Spending Account (FSA) offered to eligible Yale staff and faculty members because of the money she would save. “The biggest advantage is the savings we get by using pre-tax dollars, without a doubt,” she said. “I use the dependent care FSA to help with the cost of after-school child care and summer camps for my daughters. I have enrolled in the benefit for the last five years, and it was great through their time in day care as well.”

When staff and faculty annually enroll in Yale’s Flexible Spending Account (FSA) during the annual benefits enrollment period (it does not automatically roll over), the amount they decide to contribute for out-of-pocket expenses is not taxed. For example, if a person’s salary is $85,000, and they put $5,000 in the dependent-care FSA, their taxable income for that particular year would be $80,000.

FSA forward

Learn more

Find annual enrollment dates and enroll in an FSA.

The university’s FSA has two components: one for health care (medical, dental, vision) and one for dependent care, which includes children up to the age of 13 or spouses and parents who need help caring for themselves. Staff and faculty may contribute up to $3,300 to the Health Care Expense Reimbursement Account and up to $5,000 to the Dependent Care Expense Reimbursement Account. Staff can contribute to one or both. Contributing to one does not disqualify a staff member from contributing to the other.

Both the health care reimbursement and dependent care reimbursement are on a “use it or lose it” basis, so if staff and faculty do not submit for reimbursement for all the pre-tax money they contributed to either reimbursement account, the remaining dollars will be lost.

Regular reimbursements

Staff and faculty elect how much to put aside, not to exceed the federal maximum, to pay health care and/or dependent care expenses during Yale’s annual benefits enrollment period. The amount they choose is divided over 12 months and is equally and automatically drawn pre-tax from the employees’ paychecks monthly or weekly, depending on pay status.

HealthEquity manages the FSA reimbursement process, and staff and faculty should use Workday to find HealthEquity. “The site is very easy to navigate,” added Gibson, “and the process itself — uploading supporting documents and submitting the request — is simple. You also get email updates about your transactions.”

Due diligence

Accurate forecasting of expenses for the year ahead is key to Yale’s FSA benefit. Regular prescriptions for the whole family, dental costs after insurance, or eyeglass and contact lens expenses can usually be predicted for the health-care FSA. Day care or spousal/parental care with an expected yearly uptick in cost may also be a routine calculation.

More 411 on the FSA

Grace Period Extension: Allows participants with remaining FSA account balances at the end of the calendar year additional time (until March 15 of the following year) to incur claims and pay for out-of-pocket expenses with the prior year’s funds for reimbursement. The deadline for submitting the receipts is April 30.

Monitor balances and submitted claims: Account balances and submitted claims appear on the HealthEquity homepage. To view in Workday click on the “Benefits and Pay” hub and select “Flexible Spending Account.”

Automatic transfer of claims option: When staff and faculty enroll in the health-care FSA, they can choose Automatic Health Plan Claims (AHPC) reimbursement, which authorizes Yale to allow medical and dental carriers to submit co-pays, deductible, and coinsurance information directly to HealthEquity for reimbursement from the Health Care Expense Reimbursement Account. This feature does not automatically activate each year; you must manually enable it to participate. Find instructions and more information.

FSA and Child Subsidy Program: Employees who participate in the university’s Child Subsidy Program can also elect a Dependent Care FSA (if eligible); contributing to an FSA (pre-tax dollars) does not prohibit an employee from participating in the Child Subsidy Program (post-tax dollars), and conversely, participating in the Child Subsidy Program does not mean you cannot set aside pre-tax funds in a Dependent Care Expense Reimbursement Account.

Aetna Smart Care Plan and Health Savings Account (HSA): When staff and faculty enroll in the Aetna Smart Care Plan (high-deductible health plan) with an HSA and elect a Health Care FSA, the FSA becomes a Limited Purpose Flexible Spending Account, meaning it has more restricted usage (i.e. dental and vision claims). Employees must first use funds from their HSA before accessing the FSA. This rule also applies to employees whose spouses are enrolled in a high-deductible health plan that provides coverage for both.

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