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15.H Flexible Spending Accounts
Flexible Spending Accounts (FSAs) provide an option for paying some
health care and dependent care expenses with pretax dollars. Health
care
accounts
cover many medical, dental, and vision expenses; dependent care accounts
cover child care, elder care, and disabled care expenses. Faculty
may
participate in either or both types of accounts.
An external vendor administers the accounts. When enrolling, the faculty
member
allocates an annual amount to be deducted pretax over the remaining
pay periods from his/her paycheck and held in a fund on his/her behalf.
As qualifying health care or dependent care expenses occur, claims
should be mailed or faxed directly to the FSA vendor. Reimbursement
for eligible expenses
is made from the faculty member’s account(s) with pretax dollars.
Any amounts held in account(s) but not used to reimburse eligible
expenses
may be forfeited in accordance with the Internal Revenue Service
regulations in effect at that time. For this reason, the faculty member
might prefer to start
with a conservative amount, keep track of eligible expenses during
the year, and increase the amount the following year. Faculty members
can
enroll in a Flexible Spending Account (1) as a new hire at the University
within 60 days of date of hire, or (2) during Open Enrollment, which
occurs annually, usually in October. For details, see the Benefits Office website <www.umich.edu/~benefits/plans/reimburse/index.htm>.
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