Tax Saver Benefit (TSB)
The Tax Saver Benefit (TSB) plan is designed to save tax dollars when you pay for IRS eligible expenses. When you elect to set aside salary contributions into one or both of the TSB accounts, heathcare or dependent care, the contributions are not subject to federal, state, local or FICA taxes. This can mean substantial savings. The TSB accounts are administered by the Nyhart Company.
Full-time (75% FTE or more) Academic (including IU Residents) and Staff employees are eligible to participate in each provision of the Tax Saver benefit plan:
- Pre-tax Premium Conversion
- Healthcare Reimbursement Account
- Dependent (Day/Evening) Care Reimbursement Account
Advantages of the TSB Account
This Plan allows you to reduce out-of-pocket costs for dependent care expenses and certain health expenses by using "tax-exempt" dollars. TSB dollars are generally not taxed by federal, state, local or FICA. Dollars usually paid in taxes end up in the employee's paycheck under the TSB plan.
You do not have to be enrolled in an Indiana University-sponsored health care plan to take advantage of these tax savings.
How much can you save? Take a look at this example.
The following is an example only and is based on an annual salary of $34,000. Tax savings will depend on one’s individual tax rate. Tax savings really do add up.
|Cost of eyeglasses|
|Contribution to TSB||
|Income taxes paid to take home $480||
|Amount you must earn to pay copays/coinsurance||
The 2018 annual contribution maximum is $2,600 for per year per person (i.e. spouses can each have a TSB Healthcare account with $2,600). There is no minimum contribution requirement.
TSB Dependent Day/Evening Care
The contribution maximum is $5,000 per household. Spouses can elect TSB Dependent Care, but their combined elections cannot exceed $5,000. There is no minimum contribution.
Eligible Health Care Expenses
Examples of IRS-allowed expenses:
- Deductibles, coinsurance, and copayments*
- Routine care/physical exams
- 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
*For employees enrolled in both the Health Savings Account and the TSB Healthcare Reimbursement Account, reimbursements from the TSB Healthcare account are limited to dental and vision services, and other services only after the HDHP deductible is met.
Claim Filing Deadlines
For the TSB Healthcare Reimbursement Account, all claims must be incurred between January 1 and December 31 (or eligibility period) and must be submitted to Nyhart no later than February 28 following the end of the plan year.
For the TSB Dependent Care Reimbursement Account, all claims must be incurred between January 1 and December 31 (or eligibility period) and must be submitted to Nyhart no later than April 15 following the end of the plan year.
Should the deadline fall during a weekend, then the deadline will be extended until the end of the next business day.
Can I enroll in both the TSB Healthcare Account and the HSA?
Yes; however, when you are enrolled in both accounts, your TSB funds can only be used for dental and vision expenses until the HDHP deductible has been met for the year. Once the deductible is met for the year, the funds in the TSB can be then used for medical and prescription expenses incurred from that date forward.
How do I use the money in my TSB Healthcare account?
First, in order to receive a reimbursement from the TSB Healthcare Account, a Direct Deposit Form (PDF) must be completed and turned in to Nyhart. No hard-copy reimbursement checks will be issued.
Then, there are two ways to use your TSB Healthcare Reimbursement account. You may:
- Email, mail, or fax the claim form (PDF) and supporting documents or submit claims online to Nyhart, the plan administrator, in order to receive reimbursement for expenses you have already paid; or
- Use the IU Benefit Card to pay for your expenses at the time of service.
For each expense in a claim for reimbursement a supporting document must be included. Supporting Documents (claim substantiation) can be in the form of:
- A copy of a receipt for service or purchase
- A copy of a confirmed online bill payment
- A copy of health claim summaries (EOB) from an insurer
Each supporting document must include the following:
- Name of provider
- Date of service/purchase
- Type of service/purchase
- Charge (Amount) for each service/purchase
Be sure to retain a copy of the Claim and the supporting documentation.
What is the IU Benefit Card?
The IU Benefit Card is a debit-type Visa card that allows participants to pay for purchases and services from their TSB Healthcare Account, their Health Savings Account, or both. When you are enrolled in both the TSB Healthcare and HSA, your IU Benefits Card will be a “stacked card.” This means that when you use the card at a medical or pharmacy provider, the card will automatically draw from the HSA account. When used at a dental or vision provider, the card will automatically draw from TSB funds first, then the HSA once TSB funds have been exhausted.
See the IU Benefit Card Terms and Conditions (PDF) for detailed information.
Note: The IU Benefit Card does not apply to the TSB Dependent Care Reimbursement Account expenses.
What is the TSB Dependent (Day/Evening) Care account?
This account allows you to set aside tax-free money that is later used to reimburse yourself for day/evening care expenses of a child (under age 13), or other qualifying tax dependents, in order to allow the employee and spouse to work.
Can I carryover unused TSB account funds from year-to-year?
The TSB Healthcare Reimbursement Account has a carryover provision at the end of each plan year. Plan participants are able to carryover up to $500 of unused TSB Healthcare Reimbursement Account funds into a new account in the following plan year.
When employees have more than $500 remaining in their TSB Healthcare account on December 31st:
- Employees have until February 28th of the following plan year to submit claims for reimbursement.
- Any unused funds in the account after February 28th in excess of $500 will automatically be forfeit.
- Usual usage restrictions apply when enrolled in both the HSA and TSB Healthcare Reimbursement accounts.
The TSB Dependent Care Reimbursement Account does NOT have a carryover provision. Any unused funds in the account after April 15th will be forfeit.
IU Human Resources