Eligible categories: Administrative, Executive, Faculty, Research, Professional, Regular, and Hourly Staff.

The University of the Virgin Islands offers full-time employees the option of participating in its Cafeteria Plan. A cafeteria plan is a benefit program under which each employee has the opportunity to choose the particular eligible benefits he or she desires and pay for them on a pre-tax basis. This means that the employee premiums for eligible benefits are deducted from the employee's salary before taxes (Federal and FICA) are calculated. As a result, an employee's taxable income is lowered.

Selections must be made prior to the beginning of each plan year (January 1) or when employment begins. Benefits elected under the Cafeteria Plan remain in effect for the entire plan year and can only be changed if there is a change in family status (i.e. marriage, divorce, death of a spouse or child, birth or adoption of a child, or termination of employment.) The University's Cafeteria Plan features two options:

  • Pre-Tax Deductions or Premium Only Plan
  • Flexible Spending Accounts

Pre-tax deductions: The premiums for the following benefits can be deducted on a pre-tax basis: up to $50,000 in Group Term Life Insurance, Group Health Insurance, Medical Air Services Association, and all Supplemental Health Insurance policies offered through the American Family Life Assurance Company.

FLEXIBLE SPENDING ACCOUNTS

This program allows for participants to redirect a portion of their salary into two specific types of expenses:

  • Dependent Care and Unreimbursed Medical

Contributions are made through payroll deduction on a pre-tax basis. By redirecting a part of their salary into a Flexible Spending Account, the employee's taxable income will be calculated after the elected amounts are deducted from their pay. The funds are retained by UVI until employees file a claim for a qualified reimbursement.

The following rules apply to both Dependent Care and Unreimbursed Medical Spending Accounts:

  • IRS rules prohibit the modification and/or revocation of elections prior to the beginning of the next plan year unless there is a qualifying change in family status (i.e. marriage, divorce, death of a spouse or child, birth or adoption of a child, termination or commencement of employment, etc.).
  • IRS rules do not allow unused monies in your accounts to be returned to you at the end of the plan year. Remaining amounts at the end of the plan are forfeited to the employer.

DEPENDENT CARE

Using a Dependent Care Flexible Spending Account allows you to obtain reimbursement for qualified expenses related to the care of children age 12 and under and/or elderly or incapacitated dependents with pre-tax dollars.

Obtaining reimbursements through an IRS Section 129 Dependent care account allows you to receive payments on a tax-deferred basis as you incur the expense rather than waiting until tax filing time each year.

You may contribute up to $5,000 each calendar year on a pre-tax basis to pay for eligible Dependent care expenses. If you are married but filing separate income tax returns, the most you can contribute is $2,500 annually.

You must complete a new salary redirection agreement each year to continue participating in the plan.

For more information, contact your Benefits Representative (desserie.smith@uvi.edu).

OBTAINING A REIMBURSEMENT FROM YOUR DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT

To obtain a reimbursement from your Dependent Care Flexible Spending Account, proper documentation must be attached to a completed Request for Reimbursement form.

You may only receive a reimbursement for (the lesser of):

  1. the actual amount of the incurred expense
  2. the amount reduced from your salary at the time a request is submitted, or
  3. the total aggregate amount of your plan year election (statutory limits apply)

Services performed must be within the plan year and all expenses must have been "incurred" prior to reimbursement. The IRS defines "incurred" as "when the dependent care is provided and not when the participant is formally billed or charged for or pays for the dependent care." This means that advanced payments of dependent care expenses cannot be reimbursed until after the date the care is provided.

You must attach a receipt from the service provider that includes the following:

  • Name of dependent receiving care
  • Date (s) care was provided (must match reimbursement form)
  • Name of service provider
  • Social Security or tax identification number of the provider
  • Amount of the charge

Please complete the appropriate section of the Request for Reimbursement form with the corresponding information from the receipt.

ELIGIBLE DEPENDENT CARE EXPENSES

Dependent care expenses must meet all of the following conditions to be eligible dependent care expenses under the Dependent Care plan:

  1. The expenses must be incurred for services rendered after the cafeteria plan start date to receive Dependent Care expense reimbursement, and during the cafeteria plan year to which your election applies.
  2. Each individual for whom you incur the expenses must be:
    1. a dependent age 12 or under for whom you are entitled to receive a personal tax exemption as a dependent, or
    2. a spouse or other tax dependent who is physically or mentally incapable of caring for himself or herself
  3. The expenses must be incurred for the care of a dependent (as described above) or for related household services and incurred to enable you to be gainfully employed.
  4. If the expenses are incurred for services outside your household and such expenses are incurred for the care of a dependent who is age 13 or older, such dependent must regularly spend at least eight hours per day in your home. Charges for overnight stays are not eligible.
  5. If the expenses are incurred for services provided by a dependent care center (i.e., a facility that provides care for more than six individuals not residing at the facility), the center must comply with all applicable state and local laws and regulations.
  6. The expenses must not be paid or payable to any of your children who are under age 19 at the end of the year in which the expenses are incurred or to an individual for whom you or your spouse is entitled to receive a personal tax exemption as a dependent.
  7. Annual reimbursement must not exceed the least of the following limits:
    1. $5,000
    2. $2,500, if you are married but you and your spouse file separate tax returns
  8. You must supply the taxpayer identification number for each dependent care service provider to the IRS on your annual tax return.
  9. Expenses related to overnight camps and activities are not normally considered to be eligible for reimbursement under the plan.

UNREIMBURSED MEDICAL

The Unreimbursed Medical account allows participants to obtain reimbursements for expenses that are not paid or covered by the insurance plan.

To be eligible for reimbursement, medical expenses must:

  • Be incurred by you or an eligible dependent during the plan year
  • Not be reimbursable from any other source
  • Constitute a deductible medical expense as described in IRS Publications 502
  • Must be listed as an eligible expense
  • Must be submitted along with a receipt from the medical service provider

UVI allows you to set aside up to $2,000 annually for unreimbursed medical expenses.

You must complete a new salary redirection agreement each year to continue participating in the plan.

For more information, contact your Benefits Representative (desserie.smith@uvi.edu).

OBTAINING A REIMBURSEMENT FROM YOUR UNREIMBURSED MEDICAL FLEXIBLE SPENDING ACCOUNT

To obtain a reimbursement from your Unreimbursed Medical Flexible Spending Account, proper documentation must be attached to a completed Request for Reimbursement form.

If the expense is covered and/or paid by another health plan, you must first submit the expense to your insurance carrier. You will receive an Explanation of Benefits (EOB) from the carrier indicating any payments made to you or on your behalf by the insurance carrier. This EOB must be attached to a completed Request for Reimbursement form. List all expense items separately on the form.

If the expense is not covered by any other health plan, you must attach a receipt for the expense to a completed Request for Reimbursement form. Each expense must be listed separately on the Request for Reimbursement form. An Explanation of Benefits (EOB) or receipt will be an acceptable form of documentation if it contains:

  • Date services were provided
  • Name of person receiving services
  • Name of person providing services
  • Nature of services provided
  • Amount charged for service
  • Amount paid by other health plan (if applicable)

All expenses must be deductible medical expenses under IRS Code Section 213. (In some instances, additional information may be required to establish deductibility under IRS Code Section 213). Your signature on the Request for Reimbursement form certifies that the expenses submitted are deductible medical expenses and cannot be reimbursed from any other source or used as a deduction on personal income taxes.

Services must be performed within the cafeteria plan year and all expenses must have been "incurred" prior to reimbursement. The IRS defines "incurred" as "when the medical care that gives rise to the expense is performed, not when you are formally billed, charged for, or pay for the care."

EXAMPLES OF ELIGIBLE REIMBURSEMENT ACCOUNT EXPENSES (HEALTH CARE)

  • Ambulance hire
  • Artificial limbs and breasts (only if reconstructive)
  • Braille books and magazines
  • Crutches
  • Drugs (legal, prescription only or insulin)
  • Elastic hose, medically prescribed
  • Eye glasses / contact lenses
  • Fees for: Acupuncture, Anesthetis, Chiropodist, Chiropractor, Clinic, Dentist, Examination, Gynecologist, Hospital, Laboratory, Nurse, Obstetrician, Ophthalmologist, Optometrist, Oral surgery, Orthodontics, Osteopath, Pediatrician, Physician, Physiotherapist, Podiatrist, Psychiatrist, Psychoanalyst, Psychologist, Sanitarium, Surgeon, Surgery, Therapy, X-ray
  • Hearing devices
  • Insurance co-payments and deductibles
  • Membership in cooperative health association
  • Needles, syringes and other diabetic-related supplies
  • Nursing care
  • Oxygen equipment
  • Rental of medical or healing equipment (including maintenance)
  • Seeing-eye dog and hearing-assisting cat
  • Support or corrective devices
  • Telephone for deaf
  • Medically prescribe therapy treatments

EXAMPLES OF INELIGIBLE EXPENSES

SECTION 105-UNREIMBURSED MEDICAL EXPENSE PLANS

The following expenses are not eligible for reimbursement under a Section 105 Unreimbursed Medical Expense Program. The Internal Revenue Service has indicated that a "Medical Necessity" test is being applied to determine the eligibility for reimbursement.

Retin-A, Exercise programs and health spa membership, Smoking cessation programs, Weight loss programs (even if prescribed by a physician), Elective cosmetic surgery, Contact lens solutions, Medical insurance premiums, Nonprescription drugs, Health club dues, Dancing lessons, Swimming lessons, Rogaine, Household help, Maternity clothing, Trips, Marriage counseling, Over-the-counter medical supplies & pharmaceuticals (including vitamins and drugs available without a prescription), Mileage, Swimming pools, saunas, or exercise equipment

This list is intended to be representative of the types of expenses which may not be reimbursed. It is not intended to be complete, as other expenses may also be unreimbursable under federal tax law.