Carnegie Mellon University

Health Care Flexible Spending Accounts

Carnegie Mellon offers a Health Care Flexible Spending Account (HCFSA) to help you lower your health care expenses by paying with tax-free money. With the HCFSA, you put aside money from your pay on a pre-tax basis to cover anticipated health care expenses for yourself or your eligible dependents. 

Eligibility

  • You must be full-time benefits eligible (37.5 scheduled hours per week) to opt in to the HCFSA. Members of the Campus Police Association must be scheduled to work 40 hours per week to be eligible.
  • The HCFSA is offered to domestic employees, as well as expatriates with U.S. sourced income.
  • Participation in our insurance plans is not required to participate in the HCFSA.
  • Per IRS regulations, those enrolled in a Health Savings Account cannot contribute to an HCFSA. If you opt ot enroll in a High Deductible PPO with HSA plan, you can contribute to a Limited Purpose Flexible Spending Account.

Contributing to an HCFSA

  • You may contribute up to $3,050/year. (Minimum contribution is $60/year.)
  • Contributions will be deducted in equal amounts each pay period.
  • You must make a new election each year to participate. Elections do not rollover from year to year.

Eligible Expenses

  • Qualified health care expenses [pdf] not otherwise covered by medical, prescription, dental or vision insurance may be reimbursed. Examples include copays, coinsurance, and deductible expenses and some procedures not covered by your insurance plan.
  • Expenses incurred by you and your IRS-qualified dependents may be covered by the HCFSA. (Note: most domestic partners do not meet the IRS dependent definition.)
  • Expenses must be incurred during the plan year (calendar year plus 2½-month grace period), while you are contributing.
    • If you initiate a reimbursement account mid-year, you can only use the contributions to reimburse yourself for expenses incurred AFTER you enrolled.
    • If you increase the amount of your contributions due to a life change, you can only use the additional contributions to reimburse yourself for expenses incurred AFTER the event.
    • If you stop contributing to the account, you can only use the funds to reimburse claims incurred during your participation. To use HCFSA funds for expenses incurred AFTER your participation ends due to a loss of benefits-eligibility, you must enroll through COBRA. However, you will be using post-tax funds after your eligibility ends, and therefore will lose the tax advantages of the HCFSA from that time on.

Tax Implications

You can save up to 25% on the money you spend on eligible expenses by contributing to spending accounts on a pre-tax basis. However, you should be aware of the other financial implications of using these accounts:

  • Impact on Social Security: When you reduce your taxable income for Social Security purposes, you may also reduce by a small amount what you may claim in Social Security benefits at retirement.
  • Earned Income Tax Credit: Paying for benefits on a pre-tax basis may put employees who are eligible for the Earned Income Tax Credit [pdf] at a disadvantage when they file for federal income tax credits.