Duke Reimbursement Accounts offer you a chance to use part of the money you would normally pay in taxes to pay health care and dependent day care expenses. If you choose to participate, you elect an amount for the University to deposit from your paycheck-before federal, state and Social Security taxes are withheld-to your Dependent Day Care and/or Health Care Reimbursement Accounts.
As a result, you pay no taxes on the money you put in your accounts. This may also mean you pay less tax overall. So you see, participating in this program can actually stretch your income.
This is how the plan works:
You have until April 15 to submit claims for expenses incurred in the prior plan year. HealthEquity will honor the postmark date on your claims envelope. Prior year claims postmarked after April 15 are not eligible for reimbursement.
Remember, the cost of a service is incurred when it is received. All expenses are reimbursed based on the date that the service is received, not based on when you are billed or when you pay for the service.
Deciding How Much to Deposit
You should consider the amount of expenses you anticipate during the plan year. By planning carefully, you can benefit from tax savings with little risk of forfeiting any money left in your account at December 31, as required by IRC regulations. Note: you can carry over up to $570 (unlimited carryover for the 2021 plan year) of unused funds into the next plan year for the Health Care Reimbursement Account only. You must be an Active employee in a benefits-eligible work status on December 31 in order to be eligible for the carryover provision. See the FAQ below for more information.
The maximum you can contribute to your Health Care Reimbursement Account during the plan year (January 1 - December 1) is $2,850 ($2,750 for the 2021 plan year) and the maximum for the Dependent Care Account is $5,000. The minimum you can contribute to both accounts is $5.00 per pay period for employees paid biweekly, and $10.83 for employees paid monthly.
As required by tax laws, the money in your Health Care Reimbursement Account can only be used to pay you back for medical and dental expenses. Similarly, your Dependent Care Reimbursement Account can only be used to pay you back for eligible day care expenses. In other words, shifting money between the two accounts is not allowed.
- Benefits Payroll Deduction Schedule (for biweekly Employees)
The "Use-it-or-lose-it" Rule
Although Duke's Reimbursement Accounts offer you the opportunity to pay expenses tax free, IRS rules state that any deposits not used for expenses incurred during the plan year will be forfeited. This is known as the "use-it-or-lose-it" rule.
Note: you can carry over up to $570 (unlimited carryover for the 2021 plan year) of unused funds into the next plan year for the Health Care Reimbursement Account only.
How do I qualify for the carryover?
You must be an Active employee in a benefits-eligible work status on December 31 in order to be eligible for the carryover provision.
How much can I carryover?
Each participating employee can carryover up to $570 (unlimited carryover for the 2021 plan year) per plan year.
Is there a minimum or a maximum amount allowed for carryover?
Duke can choose to allow a carryover of any amount up to $570 (unlimited carryover for the 2021 plan year) per participating employee per plan year. Duke allows the maximum amount of $570 (unlimited carryover for the 2021 plan year).
When will the remaining prior plan year funds carryover into the new plan year?
They will be available on the first day of the new plan year.
Is the carryover option for Health Care Reimbursement Accounts only or Dependent Care Reimbursement Accounts only or both?
The carryover option is for Health Care Reimbursement Accounts only and is not available for Dependent Care Reimbursement Accounts.
Does the carryover amount count against the $2,850 maximum contribution limit applicable to each plan year?
No. You can still choose to contribute as much as $2,850 ($2,750 for the 2021 plan year) even if you carry over $570 (unlimited carryover for the 2021 plan year) from the previous plan year.
When are carryover funds available for me?
The carryover amount is available to you on the first day of the new plan. The carryover amount is simultaneously available to pay prior year expenses and current year expenses during the prior year plan run-out period (Jan. 1 - April 15th). Note: Due to the COVID-19 pandemic, the run-out period for filing 2020 health care claims has been extended to April 15, 2022.
If I incur expenses in the current plan year during the run-out period (Jan. 1 - April 15th), which account will be used first-the current plan or the carryover amount from the prior plan?
The current plan year balance will be used first and funds from the carryover plan will be used after the current plan year balance is exhausted.
If I have a carryover balance but I quit my job before I have used my funds, is that money then forfeited?
If year-to-date contributions exceed claims and there is a remaining balance, you would have to make a COBRA election to access the available balance for the remainder of the plan year. Additionally, a COBRA election allows you access to any carryover funds for the next plan year. If you do not elect COBRA, then expenses can only be submitted up to the termination date.
To be eligible to carryover funds, do I have to actively re-enroll for a Health Care Reimbursement Account in the new year?
No. If you do not actively elect a Health Care Reimbursement Account for the new plan year but you still have funds available for carryover, you will be automatically re-enrolled in the plan. You will see in your HealthEquity online account an annual election amount of $0, but you will have access to your carryover balance.
Is there a timeframe every year for my carryover funds to be used?
No. The carryover funds can be used at any time for expenses incurred in the new plan year (in addition to the elected payroll deductions). If any funds remain at the end of the current plan year, up to $570 (unlimited carryover for the 2021 plan year) is carried over into the subsequent year, indefinitely.
Can I use my HealthEquity Health Care Card with my carryover funds?
No, you cannot use your health care card with your carryover funds, unless you have exhausted your current year balance. Your health care card can only be used to access current plan year balances. You must submit a paper claim prior to April 15th to access prior year balances.
What happens if I have carryover funds and use my healthcare card for an expense that exceeds the amount of my current plan year balance? Will I have to submit a paper claim for the amount that exceeds my current plan year balance or will the card transaction automatically pull from my carryover funds?
The card will pull from your remaining current year balance and any amount that exceeds your carryover balance will automatically be pulled from your carryover balance.
If I have a $0 current year balance, but I have carryover funds, can I use my card to access the carryover funds?
Yes. If there is a $0 current year balance, the card can be used to access carryover funds for current year expenses.