2014 and 2015 Standard Health Care Flexible Spending Account (FSA)
Each Purdue employee may contribute up to $2,500 for the calendar year to a health care FSA. The annual amount you choose to contribute is taken in equal installments from your regularly-scheduled pays on a pre-tax basis. If you are paid on an academic year (AY) schedule, your FSA deductions will be taken only from your September through April pays. You will not have an FSA deduction taken from any summer earnings you may have.
You may use the standard health care FSA for health care expenses that are not covered by any medical insurance plan. This includes your out-of-pocket expenses related to your medical plan's deductible, coinsurance, or copayment arrangements.
You may request reimbursement for your own eligible expenses as well as your spouse's, if you file a joint tax return. In addition, qualified medical expenses incurred by the following persons are eligible:
- All dependents you claim on your tax return.
- Any person you could have claimed as a dependent on your return except that:
- The person filed a joint return,
- The person had gross income of $3,700 or more, or
- You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return.
- Your child under age 27 at the end of your tax year.
You do not need to be covered by a Purdue medical plan to participate in a standard health care FSA. Participants in the Purdue Health Plan Plus HSA 1, Purdue Health Plan Plus HSA 2 or any other employer's high deductible health plan are not eligible for a standard health care FSA, but may in enroll in a limited purpose health care FSA.
Due to Health Care Reform legislation, most over the counter (OTC) medicines require a doctor's prescription for reimbursement. The following are not eligible for reimbursement from your FSA:
- Amounts paid for health insurance premiums
- Amounts paid for long-term care coverage or expenses
- Amounts covered under another health plan
See what's eligible and what's not eligible on a standard health care FSA.
You may only submit FSA claims that you incur while you are participating in the FSA plan. For example, if you retire or separate from Purdue and end your FSA participation on June 30, claims for services through that date are eligible, but claims for service beginning July 1 are ineligible. Note: You have until the claim filing deadline (March 31) to file your claim reimbursement for dates of service prior to your separation date.
The FSA may be continued under COBRA, if the balance remaining in the account at the time of separation exceeds deductions taken from pay.
Verifying medical necessity
Expenses must be medically necessary to qualify for reimbursement. Because some health care services and products, for example, massage therapy and weight loss programs, may be for both medical and non-medical reasons, PayFlex may request that your doctor confirm that the expense is a recommended treatment and is a direct result of a specific, diagnosed medical condition.
If PayFlex requests confirmation, your doctor may complete PayFlex's Letter of Medical Necessity form or may submit the same information on his or her signed letterhead. When PayFlex receives the confirmation, PayFlex will note the information on your FSA for future claims.
IRS limitations on flexible spending accounts
- Expenses reimbursed from an FSA cannot be claimed as a medical expense on your tax return.
- Only expenses actually incurred during the calendar year are eligible for reimbursement. Expenses incurred before or after the eligibility period are not eligible, regardless of when you paid for the expenses. FSAs may not reimburse for future or projected expenses.
- If you do not use all the pre-tax dollars in your flexible spending account, you forfeit the amount left over. That's an Internal Revenue Service requirement.
PayFlex processes all FSA claims for Purdue University. Your claims will be processed through one of the following methods.
- Debit Card: Standard health care FSA participants receive a debit card that they may use at the place of service to pay for eligible expenses. The card number may also be used when paying for eligible expenses that are billed to you. Most charges for medical services and prescriptions will be substantiated automatically. Retain your receipts in case PayFlex asks you to provide substantiation for the charge or in case you are audited by the IRS.
If you use your debit card to pay for dental, vision, over the counter medicines, or medical services not covered by one of Purdue's medical plans, you will need to fax your receipt to PayFlex at 888-879-1454.
PayFlex sends out letters on a quarterly basis requesting needed substantiation. If you don’t provide required documentation to prove your debit card purchase was for an eligible FSA expense, the amount of the transaction will be added to your W-2 as taxable income, in keeping with instructions from the IRS.
- Reimbursement when debit card is not used: For claims that are not handled with the debit card, you may file your claim for reimbursement by faxing a copy of the completed PayFlex Health Care FSA Claim Form and your receipt to PayFlex at 866-932-2567 or mail your documentation to the address on the claim form. If prescribed by a doctor, include a copy of the doctor's prescription along with your receipt in your reimbursement submission.
- You will have until March 31 of the following calendar year to turn in claims against your FSA.
- Retain your receipts in case PayFlex asks you to provide substantiation for the charge or in case you are audited by the IRS.
- Claim form
- Tips for using your debit card
- Lists of what's eligible and what's not eligible on a standard health care FSA
- PayFlex website
- Health Care Flexible Spending Account (FSA) Worksheet: Calculate the amount you’ll need to contribute to your FSA.