Tax Saver Benefit (TSB)

On this page: Eligibility | Plan Provisions | TSB Dos and Don'ts | Contributions | Enrollment and Coverage Period

Eligibility

All Full-time appointed employees of Indiana University can elect participation in the Tax Saver Benefit Plan.

Plan Provisions

The Tax Saver Benefit Plan allows eligible Indiana University employees to reduce out-of-pocket costs for eligible health and dependent care expenses by using "tax-exempt" dollars. TSB dollars are never taxed by federal, state, local or FICA. Dollars usually paid in taxes end up in the employee's paycheck under the TSB plan. Employees do not have to be enrolled in an Indiana University-sponsored health care plan to take advantage of these tax savings.

Pre-Tax Premiums

Eligible employees automatically receive preferential tax treatment for their premiums upon enrollment in medical, dental and/or Personal Accident Insurance plans.

Health Care Expense Reimbursement Flex Plan Account*

• Any medical, dental or vision expense allowed by the IRS. Generally expenses must be incurred during the tax year or the two-month grace period (January and February) following the end of the plan year and submitted for reimbursement by April 15 of the following year.
  
• Maximum of $2,500 per year per person
  
• Examples of IRS-allowed expenses*
  • Deductibles, co-insurance and co-payments
  • Routine care/physical exams
  • Certain over-the-counter items
  • Transportation for medical services
  • Weight-loss programs prescribed by a physician for a specific diagnosis
  • Stop-smoking programs
  • Hearing aids and related expenses
  • Prescriptions, including birth control pills
  • Dental care and orthodontia
  • Acupuncture

  *For HDHP PPO & Health Savings Account participants, reimbursements are limited to dental and vision services, and other services only after the HDHP deductible is met.

• Examples of expenses not allowed by the IRS:
  • Over-the-counter medicines purchased without a physician's prescription
  • Individual or group medical premiums
  • Expenses covered by an insurance or government program
  • Cosmetic procedures
  • Retin-A (unless for medical diagnosis), Rogaine and any other medicines prescribed for cosmetic purposes
  • Expenses related to long-term care (personal and custodial care)

Dependent "Day" Care Expense Reimbursement Flex Plan Account *

• Necessary expenses for day/evening care for dependents to allow employee and/or spouse to work during the plan year.
• Includes cost of care for:
  • children under age 13
  • other qualifying persons who need care due to mental or physical disabilities (older children, spouse, or older adults living in employee's home)
• Maximum of $5,000 per year, or
• Maximum of $2,500 per year if married and filing separately
• Examples of expenses not allowed by the IRS:
  • Kindergarten
  • Overnight camp
  • Expenses paid but not yet incurred
• Claims must be submitted by April 15 following the end of the plan year.

*Notes for Expense Reimbursement Accounts

• Employee must enroll in Expense Reimbursement Accounts each November during Open Enrollment to be eligible for benefits the following year. Employees will not be enrolled in reimbursement accounts without taking specific action for enrollment each year.
• The employee's annual pledge amount is available for reimbursement from the first day of the plan year (money can be "withdrawn" faster than "deposited")
• It is recommended that employees estimate conservatively: according to IRS regulations, any amount left over at the end of the year in a reimbursement account may not be returned to the employee nor moved between accounts.

TSB Dos and Don'ts

• Do list the annual amount you want to contribute; don’t list the per-paycheck amount.
• Do estimate pledges based on expenses anticipated during the tax year (January 1 through December 31); don’t estimate on an academic year.
• Do list the amount of health expenses for you and your tax dependents in the Health Care Reimbursement Account section; don't include health expenses in the Dependent Care Account. Dependent care is for "day care" expenses, not health expenses.
• Do estimate your expenses conservatively; don't include expenses that you are unsure will be incurred.

Plan Contributions

Indiana University covers the administrative costs of the TSB Plan.

Enrollment Provisions and Coverage Period

The TSB Plan is offered on a tax year basis, and elections for participation in reimbursement accounts expire automatically at the end of each calendar year. The employee determines the annual pre-tax contribution, which is then deducted from salary and deposited directly into the respective TSB reimbursement account in the employee's name. The annual election is divided equally by the number of regular pay periods remaining in the year.

Continuing employees must enroll each year during the Open Enrollment period in November for participation the following year in a reimbursement account.

New employees eligible for participation must complete the appropriate section of benefit enrollment within 30 days of the date of hire. Enrollment is not allowed during November and December for the current year.

Employees may change or stop the salary reduction agreement for participation in the Plan only when an IRS-defined change-in-status event is experienced.

• A Change of Status event is a significant family or employment change, such as: marriage, divorce, death of a dependent, birth of a child, spouse's termination or commencement of employment, and termination or commencement of leave-without-pay.
• Changes must be consistent with the event and must be requested in writing within 30 days of the date of the event. Forms should be submitted to the campus Human Resource office. Start this process by visiting the Benefits Change Connection.