Things to consider before making flex credit allocations
The deadline for allocating your flex credits according to how you wish to use them is December 7, 2021. In considering the use of this valuable benefit, the UWOFA Pension & Benefits Committee would like to offer the following reminders and suggestions:
1. Consider what your professional or health needs might be for the upcoming year. Are you planning on attending a conference or replacing some technology? Do you need a new pair of glasses? Do you anticipate a family member requiring braces?
2. Use income tax benefits strategically. If you pay for a professional license/dues (e.g. professional engineers, nurses, law and similar) as a requirement of your work, these costs are tax deductible and perhaps not the best use of your professional expense reimbursement (PER) dollars. However, a membership to an academic society or organization, which is not tax deductible, would be a very legitimate cost to recover through your PER;
3. Use of your health care spending account (HCSA) may be affected if you have a partner with benefits. Coordination of benefits will likely change (reduce) the extent to which you would rely on the HCSA.
Below are some things to consider when planning how to allocate your flex credits.
Professional Expense Reimbursement (PER) – this account can be used for your work including, but not limited to:
- Books, journal subscriptions
- Membership fees, association dues (see note 2 above)
- Conference registration and associated travel expenses (COVID travel restrictions permitting)
- Technology expenses. This includes home internet charges, for example, which must be allocated between business and personal use. Only business use of internet is eligible for reimbursement. Click here for an example of how to determine business use
- Supplies and related expenses for scholarly work
- PER has been expanded to include home office furniture as an eligible expense for 2021. However, according to Western’s Financial Services webpage, “CRA has not provided guidance whether this would be considered a non-taxable benefit for the 2021 year and may not change their administrative position. As a result, any office furniture reimbursements in 2021 may give rise to a taxable benefit to be reported on employee’s 2021 T4.” Office furniture expenses incurred in 2021 must be submitted and approved before Dec. 31, 2021. Members can claim a maximum of $500 for office furniture or their PER balance, whichever is less
- Wearable technology (i.e. Apple watches and headphones), which are only eligible in rare circumstances. Email email@example.com if you are uncertain about claiming a piece of wearable technology
Health Care Spending Account (HCSA) – this account can cover the costs that the Western benefits program does not. Examples of coverage include:
- The remaining 15% of prescription drug costs (some medications [e.g. insulin] are very expensive and the additional costs can be recovered with the HCSA)
- The additional costs for health care practitioners above the $15 covered by benefits. This can be substantial for practitioners such as chiropractors, massage therapists, physical therapists and other practitioners
- A pair of prescription glasses is covered at $150 per year. The benefit accumulates to a maximum of two years ($300). The remainder can be covered by your HCSA
- Regular dental services are covered to 85% so the remaining 15% can be covered by the HCSA
- Restorative dentistry or major dental work is covered at 80% so the remaining 20% can be covered by the HCSA
- Only the initial orthodontic consultation fee is covered by your benefits so the cost of orthodontics can be covered by the HCSA
Wellness Spending Account – this account is a taxable benefit. However, it does cover many areas that are beneficial to you.
- Fitness such as gym memberships, sporting equipment
- Dental (whitening strips, toothbrushes, mouth guards)
- Health (natural products, vitamins, heating pads)
- Counseling (grief, addiction, weight loss programs)
- Professional (lawyer fees, paralegal fees, accounting)
- Personal development (personal interest courses such as cooking classes or meditation classes)
- Renovations (air conditioners, air purifiers)
- Environmental (composters, energy saving appliances, green home initiatives)
Flex credits have a shelf life
Remember that the flex credits you allocate have a finite shelf life. Funds in your professional expense reimbursement account normally expire at the end of the Collective Agreement, which for faculty members is June 30, 2022. However, the employer has agreed to extend the deadline for faculty members to December 31, 2022. The following four points may be helpful for faculty members as you consider how much to allocate between your PER, HCSA, and Wellness Spending accounts (for librarians & archivists, there is no change from previous years):
- The deadline for incurring expenses to be claimed using your current PER balance: December 31, 2022;
- The deadline for claiming 2022 expenses on your current PER balance: March 31, 2023;
- The deadline for incurring expenses to be claimed using the amount allocated to PER from the new allocation for 2022: to be determined in 2022 collective bargaining (if past practice is repeated, these funds can be carried over up to the end of the next collective agreement);
- The deadline for claiming the previous year’s expenses on the amount allocated to PER from the new allocation for 2022: to be determined in 2022 collective bargaining (please see note in previous bullet point).
If you allocate a certain amount to your health care spending account or your wellness spending account for 2022 and you’re unable to use the funds in 2022, the unused portion will be added to your 2023 allocation and forfeited if it is not spent by December 31, 2023.
For more information about these three accounts (professional expense reimbursement, health care spending account, and the wellness spending account) and about your flex credits, visit the university’s flex credit page and choose UWOFA 2022 or UWOFA – Librarians and Archivists 2022. This is a very useful resource!
Ready to allocate?
If you are ready to allocate your flex credits please click “log in to My Human Resources”. Select the “Allocate Flex Credits” tile and click on “Flex Credit Allocation” from the menu on the left. Select the “Make changes to your elections” button from the bottom and choose, in $100 increments, the amounts you wish to allocate to each of your HCSA, PER and WSA. If you do not allocate your flex credits, they will all be allocated to your PER by default.
We hope this information is helpful as you consider the most beneficial use of these credits for your professional work, health and well-being. Remember, the deadline is December 7, 2021!
UWOFA Pension & Benefits Committee