I’m crushed! It’s now March and I had money left over in my account to use for medical expenses, but I didn’t spend all of it by December 2018. Your letter to Hain Quilliams in November said that all the money goes back to the District at the end of the year, but I’m receiving reminders to spend it before a “grace period” runs out by this Friday, March 15, 2019. Can I actually still spend 2018 money by the end of Friday and submit March 2019 reimbursements for 2018 FSA contributions?
Is there no hope for me?
-Natasha “Nata” Planner
Dear Ms. Planner,
These are some great questions, and your lack of planning hasn’t ended your chances. Fortunately, the program MiraCosta signed up for with NBS has some perks. NBS sent out an email on November 18, 2018 reminding everyone that the end of the year was coming, but that’s not quite the case for MCC.
Deadline for spending last year's FSA is mid-March (this week!)
While it is true that any unused money for a benefit year will be returned to the district, our agreement allows for a 75 day grace period, meaning that March 16 (or sometimes March 15 depending on the year), is the last day that you can incur expenses. Those expenses incurred between January 1, 2019 and this March date can be reimbursed from the prior year's account. To be safe, this article will assume March 15 as the date and avoid any leap year issues!
What’s the catch? Because of this, the account won’t have rollover funds. Any unused funds from the prior year will be returned to the district.
Deadline for submitting receipts for previous year is end of March
You can check on claim status or submit an online claim at the NBS website: https://www.nbsbenefits.com/ . It is important to note that although you have to spend the money by mid march, you have until the end of March to submit the receipts to NBS for the previous years eligible expenses.
So let’s say that based on your choices of medical coverage and voluntary benefits, you ended up with $50 per month going to the NBS account last year. That puts you at $600 for the plan year 2018. I’ll assume the same amount when you signed up during open enrollment, which would be $600 for the year 2019 as well.
So during 2018, you used $200 from January 1 to December 31, 2018, leaving $400 in the account. So…
If you submit nothing else by March 31, 2019, this $400 goes back to the district.
If you use $400 by March 15 and submit the claims by March 31, then $0 will go back to the district and you’ll still have $600 for the rest of 2019 (or part of the grace period).
You could use up to $1,000 (the $400 of previous year added to $600 from current year) by March 15 and submit claims by March 31, and you’re all done for both 2018 and 2019.
As you can see, if you are able to plan some medical expenses, this grace period could allow you to cover more of them than is possible with just the one-year amount. For those electing the PPO medical option, up to $75 per month could go into the NBS account, or $900/yr. With the election of Kaiser, you may have $2,600 to put into the account, and if you bring the grace period into play, you would be able to have enough between the two years to fully fund something like braces for you or your child.
FSA Contribution Limits
A few of you have contacted me about information that shows we should be able to put up to $2,700 each year into the cafeteria plan. From IRS Revenue Procedure 2018-57 page 17, the maximum amount for a Section 125 cafeteria plan is $2,700 per year. See the image from that document below:
While this is the maximum allowed by the IRS, any change to the amount creates some liability to the district and any changes need to be approved. For example, any benefited employee is able to use the full annual amount in January, even though the payments to NBS continue throughout the year. Should someone use all the benefits and then resign, the district would have to reimburse the additional funds at MCC expense. The MiraCosta maximum is $2,600 per year currently and was recently increased from $2,500.
If you were able to plan enough ahead and schedule what you need in the first 75 days of the year, you would have $5,200 available to cover the expenses. Most faculty are not in this boat, but still have some overlap from one year to the next.
Long story short: even though you’re not a planner, Nada, you still can access the 2018 money and use it to your benefit. Here’s to your health, Nada!