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Home > Benefits > Tax Saver Benefit > TSB Questions & Answers

TSB Questions and Answers

What is the IU Tax Saver Benefit (TSB) Plan?

The TSB plan is an IU-sponsored benefit that allows you to use pre-tax salary to pay for certain health expenses that are not covered by insurance or for dependent (day) care expenses, depending on the type of account you elect. Each year during IU Open Enrollment, you tell the university how much money to withhold from your paycheck during the tax year. This amount is divided equally among the paychecks you receive for the year. You do not pay taxes on this money, and it is put into an account for you to use for eligible health expenses or for dependent care expenses, depending on the type of account you elect.

When are my TSB funds available for use?

In the case of TSB funds, your entire yearly pledge amount is available for claim reimbursement on January 1. 

 

What is the TSB Card option?

There are two ways to use your TSB - Health Care Reimbursement Flex account. You may:

  • Email, mail, fax, or submit claims online to Nyhart, the plan administrator, in order to receive reimbursement for expenses you have already paid; or
  • Use the IU TSB Card to pay for your expenses.

When using the TSB Card:

  • You use the card to pay at the time of service, keeping your receipts.
  • Nyhart may send you a request (e-mail or U.S. mail) for certain receipts.
  • You mail or fax your receipts with a copy of Nyhart's request.

Will I automatically receive a TSB Card if I elect the TSB – Health Care account during Open Enrollment?

No. While some employees may find the card desirable, others may not. For this reason, a card is not automatically issued. You should read the information in these pages, and then decide whether to request a card.

What is the advantage of the TSB Card?

The primary advantage is that you can pay for health services directly from your TSB account at the time you are billed, and you do not have to wait to be reimbursed. However, you may still be required to substantiate some purchases with receipts, so the card does not completely eliminate the need to keep and submit receipts when requested.  (The card cannot be used for dependent care expenses.)

 

How do I get a TSB Card?

When enrolling online you will have the option to request a card

When can I request the TSB Card?

Requests for the card can be made during a one-time annual period during Open Enrollment. Cards cannot be obtained after this request period, except for newly hired employees making a new election.

When will I receive the TSB Card?

If you request a card during Open Enrollment, your card will be mailed to you by the end of January. The card will be issued and sent by Bankcorp Bank. It will be in a plain envelope and will not be identified as a Nyhart or Indiana University mailing. You will need to watch your mail carefully for the card. Each employee will receive one card per family.

May I request more than one TSB Card?

Employees may obtain additional debit cards, for use by family members, by paying an additional bank fee. Cards can be ordered using the form at http://iutsb.nyhart.com or by calling Nyhart at 1-800-284-8412. When giving cards to family members, remember the employee is responsible for substantiating purchases on all cards, as requested by Nyhart.

What expenses can I pay with the TSB Card?

The card does not change any of the TSB plan rules for eligible expenses. The expenses must be IRS-eligible health expenses incurred by you, your spouse, or dependent during the tax year and not covered by insurance.* Examples of eligible expenses may include: deductibles, office visit co-pays, prescription co-pays, co-insurance costs, vision exams, eye glasses, contacts, saline solution, dental care, orthodontia, and certain over-the-counter items. A more complete list of eligible expenses is available on the University Human Resource Services' benefits Web page. If you have questions about whether an item is eligible, you may contact Nyhart at 1-800-284-8412.

*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.

Where can I use the TSB Card?

The TSB Card is a debit/VISA card. Always select the credit option rather than debit when using the card, as there is no PIN needed to use the card. You may use the card at any physician's office, medical facility, pharmacy, or other merchant that will accept the card. Effective January 1, 2008, the TSB Card can only be used at businesses that have registered with credit card vendors as a healthcare-related business, or that have implemented an IRS-approved inventory system for restricting TSB debit card use to eligible items.  This means that:

  • You may continue to use your TSB Card at health-related businesses such as hospitals, physician and dental offices, and vision providers;
  • The card may no longer be accepted at the main checkout counter of some grocery stores, discount stores, or pharmacies; and
  • You may no longer need to send Nyhart receipts for substantiation for purchases at stores that have the new inventory system.

For questions about where you may use the card, check with the business or contact Nyhart at 1-800-284-8412.

Why do I have to substantiate my TSB Card purchases with receipts?

The TSB Card cannot differentiate between IRS-eligible expenses and non-eligible expenses unless the merchant has installed an IRS-approved inventory system. The IRS requires that the employer take steps to verify that the TSB Card is being used only for eligible expenses. Intentional misuse of the card is subject to IRS penalties. Submitting claims for review and storage also helps to protect the plan and employees, should they be audited by the IRS.

When do I have to submit my receipts? What will happen if I do not submit them?

Nyhart will send you an e-mail request for receipts (U.S. mail if you do not provide an e-mail address) each time you use your card at an office or merchant that does not have an IRS-approved inventory system.  Substantiation of these purchases is required. You will have two weeks to submit receipts. One reminder will be sent. If purchases are not substantiated within 30 days, your card will be deactivated. It will be reactivated as soon as you submit receipts. If you cannot provide receipts, you will be asked to send Nyhart a check to repay the unsubstantiated reimbursements from your account.

What happens if my receipts show that I accidentally used the card for an ineligible expense?

Your TSB account should only be used for eligible health expenses, but mistakes can happen. You should not be overly concerned if the card is used for ineligible expenses; however, you should take steps immediately to reimburse your account when you become aware of the problem. If Nyhart notices the error first, repayment will be requested and your card will be deactivated if your account is not reimbursed. An example of an ineligible expense might be a dental bill paid in January for services provided in December of the prior year. Please note that Nyhart makes reasonable efforts to verify the eligibility of expenses; however, the employee is ultimately responsible to the IRS for misuse of the card.

What if I lose the receipts for my purchases?

If you cannot substantiate your purchases, Nyhart will ask you to reimburse your account. Your card will be deactivated if you do not reimburse the account.

Can I use my card to pay for over-the-counter medicines that my doctor has suggested?

No, not unless you have a physician's prescription for the medicine. Due to a change in IRS regulations, TSB funds can no longer be used for over-the-counter medicines unless purchased with a physician's prescription beginning January 1, 2011. A partial list of eligible over-the-counter items is available at iutsb.nyhart.com. If you have questions about what items are eligible, contact Nyhart at 1-800-284-8412. 

May I use my TSB Card to pay for health insurance premiums?

No. You cannot use monies from your TSB account to pay for health insurance premiums.

What if my card purchase is for an amount greater than my account balance?

You will need to pay the excess amount out-of-pocket.

If I request a TSB Card, can I still pay for purchases and submit receipts for reimbursement by check or electronic fund transfer?

Yes. However, receipts submitted to Nyhart for substantiation of card purchases and receipts for reimbursement claims must be clearly differentiated. Receipts for reimbursement must be accompanied by a claim form available from the UHRS Web page. To submit receipts to substantiate card purchases, wait to receive an e-mail (or U.S. mail) request from Nyhart, then submit the receipts with a copy of the request. Do not use a claim form to substantiate card purchases. Doing so may result in the purchase amounts being deducted twice from your account.

What if I don't owe anything at my doctor's office, but get a bill later?

You can still use the card to pay the bill by writing your card number on the invoice and mailing it in, or by providing the card information over the phone. You may also use the card for mail order pharmacy service.

What happens if I lose my card?

If you lose the card, contact Nyhart immediately.  Nyhart will deactivate your card once they are notified. There may be a modest charge for replacing lost cards. Remember, no PIN is required to use the card, so you must report lost or stolen cards immediately.

Are there disadvantages to using the TSB Card?

Here are some things to consider:

  • The card can be used inadvertently for ineligible items causing request for repayment of your account.
  • Using the card can make it easier to forget that receipts must be retained in order to substantiate claims as required.
  • Certain unsubstantiated purchases must be repaid or the card is deactivated.
  • Cards can be lost or stolen which requires reporting, cancellation, and reissue.
  • Most, but not all, providers accept the card.
  • If you sometimes use the card and at other times pay out-of-pocket, keeping track of different payment and substantiation methods may be bothersome.
  • If you are in the habit of saving receipts over the year and submitting them all at one time, the card may require multiple submissions.
  • When using the card at a merchant location, you must separate eligible expenses and pay for them separately from ineligible purchases. For example, if you purchase eligible over-the-counter medicines along with groceries, these purchases must be separated so the card is only used for eligible expenses. Also, please remember that the card may no longer be accepted at the main checkout counter of some grocery stores, discount stores, or pharmacies.  Eligible over-the-counter items may have to be purchased separately at the pharmacy counter.

Who do I contact with questions?

The Nyhart Company:
www.nyhart.com
Phone: (800) 284-8412
Fax: (888) 887-9961
Email:

University Human Resource Services:
hr.iu.edu/benefits

Page updated: 15 October 2012
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