Dependent Care FSA FAQs

A Dependent Care FSA can help you put aside dollars, income tax-free, for the care of children under 13 or for dependent adults who can’t care of themselves. Your account is funded by payroll deductions before taxes. That money may help pay for a variety of services, including: day care, nursery school, preschool, after-school or senior day care. 

Liberty offers two types of flexible spending accounts: A Health Care FSA and a Dependent Care FSA.

• A Health Care FSA can cover medical, prescriptions, hearing, dental or vision expenses that you would otherwise pay for out-of-pocket. Common qualified expenses that a Health Care FSA will usually cover include the deductible, coinsurance or copayment amounts for your health plan, eyeglasses or contact lenses, dental work and orthodontia, medical equipment, hearing aids, and chiropractic care. Many over-the-counter drugs, such as cold and allergy medicines, and pain relievers and antacids, can also be reimbursed through a Health Care FSA with a doctor’s note/letter of medical necessity. For a list of eligible expenses please, see the IRS Publication 502. The full amout you elect to contributions in a Health Care FSA is available at the start of your plan year.
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• A Dependent Care FSA covers employment-related day care expenses for child or disabled dependent care. Eligible dependent care expenses must be for services that allow you to be able to work. Typical eligible expenses under this account include charges for day care, nursery school and elder care (though not if it is for medical care) for your legal tax dependents. The Dependent Care FSA funds are avilable as deductions are deposited in the account.

• Your contributions are before-tax or tax-deductible.*
• Tax-free withdrawals are made to pay your out-of-pocket expenses related to dependent care.
• Because of these tax advantages, the more you use your Dependent Care FSA, the more money you could save. The amount of savings will depend on your personal tax rate.

*Contributions are tax-deductible on your federal tax return. Some states do not recognize FSA contributions as a deduction. Consult a qualified tax adviser for advice.

The biggest advantage is having funds available tax-free to cover eligible dependent care expenses.  Every dollar you set aside in your account reduces how much you pay in income taxes. Plus, you can be reimbursed for eligible child care expenses that you are already paying for.

You are eligible for this benefit if you have a dependent (whose expenses are eligible) who requires care to enable you to work. In addition, you must meet one of the following eligibility criteria:

• You are unmarried.
• Your spouse works, is a full-time student, is actively seeking work or is disabled (incapable of self-care).
• You are divorced or legally separated and have custody of your child even though your former spouse may claim the child for income tax purposes. Your dependent care FSA can be used to pay for child care services provided the period the child resides with you.

Eligible dependent care expenses can be found in IRS Publication 502.

Due to frequent updates to the regulations governing FSAs and HSAs, this list does not guarantee reimbursement but, instead, is to be used as a guide for the submission of claims.

Recurring expenses are day care expenses for eligible dependents (see below) that are incurred so you and your spouse can work. To qualify, you and your spouse must be employed, or your spouse must be a full-time student.

If you’re married and you file a joint return, or you file a single or head-of-household return, the annual IRS limit is $5,000. If you’re married and file separate returns, you can each elect $2,500 for the calendar year.

Eligible dependents include:

• Children under age 13* who are claimed as a dependent for tax purposes
• Care of a disabled spouse or disabled dependent of any age

Ineligible expenses:

• Costs already claimed as a dependent care tax credit on your income tax return
• Nursing home, respite care or other residential care centers
• Services provided by one of your dependents
• Nighttime babysitting expenses that are not work related
• Expenses while absent for work for more than two weeks at a time
• Costs paid to your own dependents, under age 19, who are caring for your dependents
• Expenses paid for schooling for kindergarten or higher
• Overnight camps

* For the plan year ending 12/31/2020 only, participants may claim expenses through 12/31/2021 for dependents who turned 13 during the 2020 plan year.

Certain qualifying events allow employees to increase/decrease their election or begin/cease participation in a plan. Common qualifying events include marriage, divorce, birth, death or a change in the cost of dependent care.

The adjustment to the election must be consistent with the event. For example, an increase in the cost of day care would not allow you to decrease your election.

Please refer to your employer’s summary plan description for further guidance on qualifying status change events applicable to your plan.

• Funding. You will contribute a pre-determined amount to your account.  Your funds will be avilable as deductions are deposited in the account.
• Accessing funds. When you have eligible dependent care expenses, pay for them with your Optum Bank debit Mastercard®, or pay out-of-pocket and request reimbursement online. Remember to always keep your receipts.
• Requesting reimbursement/substantiating purchases. It’s quick and easy to request reimbursement for eligible expenses paid using personal funds, or to submit documentation for card purchases. Uploading required documents is easy with our online and mobile applications.  Please remember that credit card receipts, non-itemized cash register receipts and cancelled checks are not acceptable forms of documentation. Always request an itemized receipt or EOB from your health care provider or merchant.
• Claims processing. We will promptly process your request and reimburse you either by check or direct deposit if you sign up for that feature.
• Account management. Sign in to your online account or the mobile app to check your account balance, set up your family profile, add a bank account to enable faster reimbursements, or request a debit card in a dependent’s name.

Automatic dependent care enables participants to be automatically reimbursed for dependent care expenses by filling out one form instead of filing multiple claims throughout your plan year.

Automatic dependent care works in one of two ways:

If the cost of child care per month meets or exceeds your monthly payroll deduction, reimbursement will be issued as payroll deductions posted to your dependent care reimbursement account.

If the cost of day care is less than your monthly payroll deductions, reimbursement will be made once per month at the end of the month.

To set up automatic dependent care reimbursement, complete the FSA recurring dependent care request form.

The FSA Automatic Dependent Care Request Form needs to be completed each plan year. Changes can be made at any time by submitting an updated FSA Automatic Dependent Care Request Form.

Maybe. If you have two or more qualified dependents and pay more than $5,000 per calendar year in daycare expenses, you can take the remaining amount and apply it toward the tax credit maximum. Based on your family’s income level, you’ll receive a credit for a percentage of that amount. For example, if your family’s income is $33,000 a year, you have two dependents, and you spent $7,000 in childcare expenses, you would be eligible to take an additional tax credit of $250 ($1,000 x 25 percent tax credit percentage based on income level).

Your Optum Bank debit Mastercard® can be used at health care–related merchants, such as hospitals and vision, dental and doctor’s offices. It can also be used at drugstores, pharmacies and grocery stores that have implemented the IIAS (Inventory Information Approval System) or certified 90% of their gross sales are FSA eligible.

As always, save itemized receipts, bills or statements any time the payment card is utilized.

The Optum Bank debit Mastercard® may also be used at daycare providers that accept Mastercard® or Visa® and have a valid merchant category code signifying they are a daycare provider. The Optum Bank debit Mastercard® may not be used if you pre-pay daycare expenses, since the IRS requires the expense must be incurred before reimbursement can be made from your dependent care spending account.

If you do not use your Optum Bank debit Mastercard®, you may file claims for reimbursement in two ways:

• File an online claim. First, sign in to your account. Click on the "file claim link" on your home page and walk through the steps to enter the details of the claim. Once you have filed your claim, you must agree to the terms and conditions and click the Submit button. To complete the reimbursement process, send your confirmation page along with your supporting documentation to us. Or do the same process on the App.
• File your claim using the FSA reimbursement request form. Follow the provided instructions to complete this form. Claims and copies of your supporting documentation can be submitted via email, fax or mail.

Email:	optumclaims@prod.sourcehov.com
Fax number:	1-855-244-5016
Mail:	Optum Bank
	PO Box 30516
	Salt Lake City, UT 84130

Federal regulations require Optum to obtain itemized receipts for transactions that are not automatically substantiated at the point of sale.

Card transactions can be automatically substantiated without additional paperwork if they are:

• Copayment amounts tied to your health plan. These amounts need to be communicated to Optum by your employer.
• Transactions that match the provider and dollar amount exactly for previously approved transactions (e.g., orthodontia claims, maintenance prescription drugs) and were noted by you as recurring on the request for substantiation notification.
• Purchases made at merchants using the Inventory Information Approval System (IIAS).
• If the claim file received by the insurance carries does match the debit card purchase.  

In the event a charge does not meet these four criteria, Optum will send three requests for documentation approximately 60 days from the date of the transaction of the debit card.

Should a charge remain unsubstantiated 60 days from the date of the first documentation request, the benefits payment card will be placed in a temporary hold status. The payment card will be reactivated as soon as the necessary documentation has been received to substantiate the expense.

Documentation for medical FSA expenses required by the IRS includes a third-party receipt containing the following information:

• Date(s) of service
• Itemized list of purchases
• Name of the merchant or health care professional
• Dollar amount(s) (after insurance, if applicable)

Documentation for Dependent Care FSA expenses required by the IRS includes a third-party receipt containing the following information:

• Date(s) of service
• Dollar amount
• Name of daycare provider

In the event the provider is unable to provide a receipt with this information, he or she may simply sign the FSA reimbursement request form or the confirmation page (if the claim was filed online). To download the form, and visit the Forms tab.

Commonly submitted documentation that results in denials includes:

• Statements only indicating a paid amount, balance forward or previous balance
• Credit card receipts only reflecting a payment
• Bills for dependent care/medical expenses where services have not yet been incurred

When submitting a receipt for a copayment amount, please be sure the copayment description is on the receipt. In some cases, you will need to ask for a receipt at the point of service. If “copayment” is not clearly identified, have the provider write “copayment” on the receipt and sign it.

To ensure efficient processing, include the proper form or letter along with your documentation.

This can be submitted via email, fax or mail.

Email:	accountholderservices@optum.com
Fax number:	1-855-244-5016
Mail:	Optum Bank
	PO Box 30516 Salt Lake City, UT 84130

Participation in the Dependent Care FSA ends if you terminate employment. This means only expenses incurred prior to the date your participation in the plan ends are eligible for reimbursement. 

The “run-out” is a specified period of time after the end of the plan year, or following your termination in the plan, in which you may continue to submit claims incurred during your period of coverage. This is not a period when you are able to continue to incur new expenses, but rather it allows you time to gather and submit expenses before your funds are forfeited.

Liberty has a run-out period, which means Dependent Care FSA participants have until March 31st of the following plan year to submit claims incurred for the previous plan year.

A service or expense must be incurred before it is eligible for reimbursement. A Dependent Care FSA expense is considered “incurred” when the service is performed, not when you pay for the service. In addition, the service must be performed during your participation in the plan. Services or expenses incurred before or after your plan participation dates do not qualify for reimbursement.

Please follow these steps to access your account online:

1. Go to the home page at optumbank.com/liberty.
2. If you are an existing account holder, click the "sign in" button found on the top left side of the page.
3. If you are a new account holder, select the option to Register for site access.
4. If you forgot your username, click the “Forgot username” link.
5. If you forgot your password, click the “Forgot/Change Password” link.

Due to HIPAA regulations, Optum cannot disclose your personal health information (PHI) to any unauthorized representatives.

To authorize an individual or entity to discuss your account detail, complete the authorized release form. 

1. "Sign in" to your account online to access the authorized release form. 
2. Click on "Help & Tools" from the main menu bar.
3.  Select "Forms and documents."
4. Select "Authorization for Release of Personal Information." Complete this form to authorize the release of personal, individually identifiable information on your account to others.

To order additional cards for your spouse and eligible dependents, sign in to your account. In the “I want to” section, click “Manage debit cards.”