It is an option offered to State employees under the State's FlexElect Program and governed by the Internal Revenue Code (IRC) Section 125. Expenses for child care, elder care, and care for a disabled dependent are reimbursable if the care is necessary for you to work or look for work. This is funded by monthly pre tax payroll deductions from your paycheck. The money you contribute to a dependent care reimbursement account is not taxable, which means you'll pay fewer taxes than you would if this money is counted as taxable income.

If you're married, your spouse must also work or be looking for work, unless he or she is a full-time student or physically or mentally incapable of caring for himself or herself.

• at least $20 per month, and
• no more than $5,000 per year per household ($2,500 for a married individual filing a separate tax return).

Expenses for your children, elder care, and care for a disabled dependent are reimbursable if the care is necessary for you to work or look for work. Your child must be a dependent under the age of 13 when the child care is provided. (There is no age limit if your child is disabled.)

You're eligible to enroll in a DCRA if you have a permanent position that is half-time or more. If you have a temporary position, you're eligible if you have a mandatory right of return to a permanent position that is half-time or more. If you're a Permanent-Intermittent employee, you're not eligible to enroll in the DCRA.

You can enroll in a DCRA within 60 days of becoming "newly eligible" or during the annual fall open enrollment period. The open enrollment period is normally held each year during the month of September through mid-October.

You're newly eligible if:

• you're a new State employee hired after the open enrollment period;
• you were on an approved leave of absence during the entire open enrollment period;
• you experience a change in status described in the FlexElect Program Handbook that permits you to enroll as newly eligible; or
• your time base/employee designation changes from one that was ineligible to one that is eligible, or you change from a Permanent-Intermittent position to a permanent position with a time base of half-time or more.

You need to complete the STD. 701R Reimbursement Account Enrollment Authorization (Adobe Acrobat). The STD. 701R is available in the FlexElect Program Handbook, from your Personnel Office, and also on this website.

If you're newly eligible and want to enroll in a DCRA, you must submit the enrollment form to your Personnel Office within 60 days of becoming newly eligible. Correctly completed forms received at the State Controller's Office by the 10th of the month are effective the 1st of the following month. If you enroll during the annual open enrollment period, then your effective date is the first of the following year, on January 1st.

If you enroll in the DCRA, a $2.50 fee is deducted from your after-tax salary each month.

An expense is incurred on the date the service is provided, not when billed or paid.

1. Fill out DPA 352 FlexElect Reimbursement Claim Form. (You'll receive a supply of claim forms in the mail before the plan year starts, with a complete set of instructions.)
2. Attach a statement signed by your provider or have your provider sign in the space provided on the claim form. If you attach a statement, it must show the provider's name, beginning and ending dates of the dependent care service that was provided, the amount, and the provider's tax I.D. or Social Security Number.
3. Mail your completed Claim Form and required documentation to Fringe Benefits Management Company (FBMC), the record-keeper for FlexElect.

You may submit claims as often as you like. If you pay your provider in advance, such as paying a daycare provider on the first of the month for that month's daycare, you may prefer to submit your claims every week or two rather than waiting until the end of the month. There are three payment cycles for processing valid reimbursement claims:

• If FBMC receives your claim by the 1st of the month, your reimbursement check will be issued between the 14th and 16th of that month.
• If FBMC receives your claim by the 10th of the month, your reimbursement check will be issued between the 24th and 26th of that month.
• If FBMC receives your claim by the 20th of the month, your reimbursement check will be issued between the 3rd and 5th of the next month.

Once you enroll in the DCRA, you can't cancel or change your enrollment during the plan year unless you experience a change in status, called a "permitting event" (e.g., birth of child, divorce, loss of employment, change in provider). There is a complete list of the "permitting events" in the FlexElect Program Handbook.

No. Depending on your income level, amount of dependent care expenses, and other factors, you may find that a reimbursement account provides a lesser tax advantage than claiming the tax credit on your federal tax return. Before enrolling in a reimbursement account, you may wish to consult a tax advisor if you're not certain which method works best for you.

The IRS allows payment for medical care expenses incurred up to two and one-half months after the end of the plan year. In other words, you may use money deducted in 2007 to pay for medical care expenses incurred up to March 15, 2008. You still have until June 30, 2008 to claim expenses incurred up to March 15, 2008 and any unused amount at the time will be forfeited pursuant to IRS rules.

If you need more information, check with your Personnel Office to obtain a copy of the FlexElect Program Handbook.

If you are enrolled in a FlexElect account for the 2007 Plan Year and you have questions about your account, call 1-800-342-8017 to speak with a customer service representative from Fringe Benefits Management Company (FBMC), the new record keeper. You also can e-mail FBMC at webcustomerservice@fbmc-benefits.com, visit their web site at www.fbmc-benefits.com, or access their 24-hour automated phone system at 1-800-845-3262.

Current as of February 23, 2007