What Can Reimbursement Accounts Do for You?

Duke faculty and staff members can protect part of their salary from taxes and keep more money in their pockets by signing up for reimbursement accounts during open enrollment for health benefits in October.

Two reimbursement accounts are offered: one for health care costs; the other for dependent care expenses. These accounts allow participants to shelter some of their salary from taxes and use it to pay for certain products or services.

Not sure how to use this tax-free money? Take this quiz to learn the benefits of enrolling in health and dependent care reimbursement accounts. (Answers at bottom)

1. If you meet eligibility requirements, a dependent care reimbursement account can be used to pay for pre-school tuition and for many before-or after-school care programs or summer day camp expenses for children under age 13.

True or False?

 

2. Which item is not covered by a health care reimbursement account?

a) contact lenses and eyeglasses

b) toothpaste

c) mileage for travel to and from health treatment

d) hearing aids

e) mail-order prescriptions

f) co-pays and deductibles required by health insurance

g) over-the-counter cold medicine

 

 

3. If your spouse loses his/her job, which of the following is not permitted with the dependent care reimbursement account?

a) contacting Human Resources within 30 days to stop or reduce contributions

b) moving money in the account to your bank account

 

4. It pays to carefully calculate how much money to set aside and protect from taxes because the Internal Revenue Service has a "use it or lose it" rule for these accounts each year.

True or False?

 

5. You can enroll in a health care reimbursement account even if you don't have health insurance through Duke.

True or False?

 

6. The minimum amount you can deposit in a health care or dependent care reimbursement account each pay period is:

a) $5 for employees paid biweekly, and $10.83 for employees paid monthly

b) $20 for employees paid biweekly, and $50 for employees paid monthly

 

7. Using the Wage Works debit card provided with a healthcare reimbursement account means you don't have to save receipts.

True or False?

 

8. If you are married, to be eligible for your family to use a dependent care reimbursement account, your spouse must have a job, be looking for a job or be a full-time student.

True or False?

 

9. Adult day care expenses for relatives are eligible for reimbursement through your dependent care reimbursement account if:

a. the dependent lives with you

b. the dependent is claimed on your personal income taxes

c. the care is primarily custodial (not medical)

d. the care allows you (and your spouse, if married) to work

e. all of the above

 

10. How much is saved annually with reimbursement accounts depends on:

a) taxable income

b) amount of money deposited in accounts

c) how well you forecast expenses

d) all of the above

 

ANSWERS:

1. True; 2. b; 3. b. You cannot withdraw the money from the account except for eligible expenses; 4. True; 5. True; 6. a; 7. False. Always save receipts to verify expenses you claim are an eligible expense; 8. True. However, there are special exceptions if your spouse is disabled; 9. e; 10. d.