Dependent Care Flexible Spending Account
Employees may use a Dependent Care Flexible Spending account (Dependent Care FSA) to be reimbursed for employment-related dependent care expenses for eligible dependents that allow the employee and his or her spouse to be gainfully employed. The plan is subject to federal Revenue Code requirements and Internal Revenue Service regulations.
(2) Employees enrolled in a Dependent Care FSA contribute a pre-tax amount from each months salary during the plan year. Employees receive reimbursement from the account during the plan year for incurred qualified Dependent Care expenses by submitting a claim.
(3) FSA plans are annual plans, eligible employees must enroll for each plan year to participate. The enrollment does not roll over from one plan year to the next. All plan year FSA enrollments terminate December 31. The period of coverage is the 12 months during the plan year.
(4) An employees failure to take an enrollment action is not considered an employee enrollment error. An enrollment action means that the employee during the allowable enrollment times must take an action to enroll, add to, save an active enrollment, or change benefit plan enrollment elections.
(5) The eligible employee is responsible for identifying enrollment errors and maintaining a valid and accurate Dependent Care flexible spending enrollment. The employee has 30 days from date of their first paycheck with their Dependent Care FSA enrollment to request a correction. The exception is open enrollment see OAR101-020-0037 (c).
(6) PEBB must review enrollment errors reported by the employee. Corrections, if allowable, must be consistent with the IRS regulations that govern flexible spending accounts.
(7) An employees pretax contribution under a Dependent Care FSA in a calendar year is (not exhaustive list):
(a) $5,000 if the employee is married and filing a joint return or if the employee is single parent.
(b) $2,500 if the employee is married but files separately.
(c) When a spouses employer also has a dependent care FSA plan, the $5000 limit applies to the total amount of pre-tax dependent care assistance that the employee and his or her spouse, as a couple, can receive in any tax year from all employer-sponsored plans.
(d) The limit is not affected by the number of qualified persons an employee has.
(8) To qualify as employment-related dependent care expenses, the expenses must be incurred in order to enable the employee (and the employees spouse) to be gainfully employed. The dependent care must have been for qualifying individuals. In general (not exhaustive) a qualifying individual is a tax dependent who is:
(a) A dependent of the taxpayer (i.e., a qualifying child) who has not attained age 13; or
(b) A dependent of the taxpayer (i.e., a qualifying child or a qualifying relative) who is physically or mentally incapable of caring for himself or herself; and has the same principal place of residence as the taxpayer for more than half of the year; or
(c) The spouse of the taxpayer if the spouse is physically or mentally incapable of caring for himself or herself and has the same principal place of residence as the taxpayer for more than half the year.
(9) The annual contribution to the account cannot exceed the allowable federal annual maximum.
(a) The employees monthly contribution is the annual contribution election amount pro-rated per each month of the plan year.
(b) PEBB requires a minimum monthly contribution amount.
(c) An employee may make only one FSA contribution each month of the plan year.
(d) An employee may not change their contribution unless they experience a qualified mid-year plan change event that allows the change.
(e) Some OUS employees may have fewer months (9 or 10) of contribution during the plan year. Employees that receive less than 12 months of paychecks during the plan year must indicate during enrollment the months in which they will not receive a paycheck. For employees who receive less than 12 paychecks in a plan year, the electronic system and the paper enrollment form provide check boxes to indicate the months in which no contribution will be made.
(10) Claims are reimbursed for qualified expenses incurred while the Dependent Care FSA coverage was actively in force. Active participation ends the last day of the month that a contribution is received for that month.
(a) The amount of reimbursement available to a participant at any time during the period of coverage is restricted to the amount previously contributed by the participant, less any amounts reimbursed.
(b) A reimbursement exception is made for eligible expenses incurred in the month following the employees end of participation or loss of plan eligibility, if the month is in the current plan year (not during the grace period) and the employee submits a claim within 90 days after the plan participation end date.
(11) A grace period for qualified claim and reimbursement extends through March 15 of each new plan year. During the grace period, FSA participants may incur claims against any remaining previous plan year FSA funds up to March 15 in the new plan year. The qualified claim submission deadline for previous plan year account fund reimbursements is March 31 of the new plan year.
(12) FSAs are use it or lose it accounts. Any previous plan year funds remaining in the account beyond March 31 of the new plan year forfeit to PEBB plan administration.
(13) Refunds of account funds without a timely claim and reimbursement submission process are not permitted. Fund transfers between the account types are not permitted.
(14) The Dependent Care FSA contributions can continue during a protected leave such as FMLA/OFLA, CBIW, or Active Military Duty; however, in general, most claims incurred during the leave will not be eligible for reimbursement.
(a) Employees may revoke the FSA account enrollment during the approved protected leave.
(b) Employees taking a LWOP and not in a protected leave will have their Dependent Care FSA revoked during the leave.
(c) Employees canceling the Dependent Care FSA when going on a leave can reenroll in the plan when they return to work.
(15) Final contribution at termination of employment or leave.
(a) An OSPS employee will not have a contribution taken from their final paycheck.
“Example: Anns last day of work is September 16. Her final check will not have a contribution taken. Anns participation ends September 30.
(b) An OUS employee who meets the 80-hour work rule will have a contribution taken from their final paycheck, in accordance with OAR 101-020-0002.”
“Example 1: Anns last day of work is June 6. She has less than 80 hours of work for the month. Anns final check will not have a contribution taken. Anns participation ends May 31.”
“Example 2: Anns last day of work is June 20. She has more than 80 hours of work for the month. Anns final check will have a contribution taken. Anns participation ends June 30.”
(16) An eligible employee who separates from the employer and returns to work in a benefit eligible position within 12 months is not reinstated in the Dependent Care FSA. They may enroll within 30 days of their new benefit eligible date.