The employee portion of the UA Medical and Dental insurance premiums may be paid with pre-tax dollars. In most situations, this will increase your take home pay, due to the reduction in payroll taxes. Your gross income amount reported on your W-2 will show this reduced taxable amount.
Health Care Reimbursement Account
Certain out-of-pocket health care expenses can be reimbursed with pre-tax dollars when you elect to contribute to the Health Care Reimbursement account. You may elect to contribute between $120 and $2500 annually. The amount that you elect to set-aside in this account will be held until you submit receipts for reimbursement.
Eligible expenses include any eligible out-of-pocket health care expenses (incurred during the eligible period of coverage) of the employee, spouse and dependents which are not reimbursed by an insurance plan, such as co-payments, deductibles, and coinsurance for all medical and dental plans.
Dependent Care Reimbursement Account
You may be reimbursed with pre-tax dollars for day care or after-school care expenses for a child under age 13 or an elderly person or a person with disabilities as long as they are claimed as a dependent for federal tax purposes. The amount that you elect to set-aside in this account will be held until you submit receipts for reimbursement. Expenses must be work-related. Both spouses must be employed. The annual maximum contribution is $5000.
It is important to estimate your needs for each purpose as accurately as possible and to anticipate any changes that may occur during the year, such as your pre-school child starting kindergarten in the fall.
Important general limitations about reimbursement accounts:
- There can be no transfer of funds between the accounts. For example, the dependent care fund cannot be used for reimbursement of health care expenses.
- Expenses must be incurred from the first day of the plan year, or participant’s eligibility date, through the end of the plan year, or the participant’s termination date, whichever comes first, regardless of when the expense is billed or paid.
- You must re-enroll in the reimbursement accounts during the designated enrollment period, prior to each plan year anniversary (usually in November & December).
- Any amounts not used by the end of the plan year are forfeited to the University.
- When your employment with the University ceases, you will have 60 days from your termination date to submit a request for reimbursement. You will only be able to submit eligible expenses incurred from the first day of the plan year (January 1st) or your effective date in the reimbursement Account(s), through your termination date.