Flex Spending Accounts
New York State Flex Spending Account (FSA) Pretax Benefit Plans
The Flex Spending Account (FSA) is a negotiated state employee benefit that saves you money by allowing you to pay for certain expenses with pretax dollars. Under this program, you may choose two benefits:
Please note: To comply with the requirements of the Affordable Care Act, new employees who enroll in the Health Care Spending Account during the plan year have a 60-day waiting period before their coverage begins. The Health Care Spending Account eligibility period for a new employee will begin on the 61st consecutive calendar day of employment.
The Dependent Care Advantage Account (DCAAccount) allows your family to set aside up to $5,000 in pretax salary for eligible child care, elder care, or disabled dependent care expenses that are necessary for you and your spouse (if you are married) to work.
For DCAAccount employer contribution rates, which are on a sliding scale (from $300 to $800) according to salary, please visit the New York State Flex Spending Account’s DCAA site. New York State has agreed to make the employer contribution for the Dependent Care Advantage Account available for 2017. The 2017 plan year employer contribution rates are:
- Your salary / Employer contribution:
- Under $30,000 / $800
- $30,001–$40,000 / $700
- $40,001–$50,000 / $600
- $50,001–$60,000 / $500
- $60,001–$70,000 / $400
- More than $70,000 / $300
Update on employer contributions for 2018 from the Office of Human Resources, Oct. 11, 2017:
Under previous NYS/UUP Agreements, UUP members who enrolled for a Dependent Care Advantage Account were also eligible for an employer contribution to their DCAAccount to assist with dependent care expenses. While we expect the employer contribution to be restored once a new Agreement between UUP and the State is ratified, the employer contribution has now “sunset” following the expiration of the 2011-2016 Agreement, and the State of New York has not agreed to provide an employer contribution while contract negotiations are still in process.
Although the DCAA employer contribution is not currently available, interested members are strongly encouraged to enroll in the DCAA without it. Enrolling with an employee contribution for 2018 will still result in significant savings on dependent care expenses. In addition, it is the best way to protect eligibility for an employer contribution when collective bargaining negotiations conclude and the employer contribution becomes available for 2018.
Members who enroll in DCCA may enroll for an employee contribution of any amount from $1 to $5,000. Once a new contract is ratified and an employer contribution becomes available, existing DCAAccounts will be credited with the employer contribution. When this occurs:
- Members who have enrolled with employee contributions of less than the value of the employer contribution will have their DCAAccount credited with the amount of their employer contribution and their employee contributions will be refunded back to them.
- Members who have enrolled with employee contributions of greater than the value of the employer contribution will have their DCAAccount credited with the amount of their employer contribution. The equivalent amount of employee contributions will be refunded back to them. The total value of their DCAAccount will not be increased.
Interested members should visit www.flexspend.ny.gov for additional information and to access online enrollment before the close of the open enrollment period at midnight on November 6, 2017.
For details on eligibility, maximum allowable contributions, and plan information, please visit the New York State Flex Spending Account site, www.flexspend.ny.gov.
Before participating in either plan, you should carefully consider what your eligible expenses might be. Reviewing your expenses from previous years can help. Once you have estimated the amount of your expenses, you may then determine how much to contribute. Under federal law, any money that you put into a pretax Flex Spending Account must be used for expenses incurred during the plan year in which it was contributed. Any funds that you do not claim for reimbursement are forfeited at the end of the plan year.
Please note: On October 31, 2013, the U.S. Department of the Treasury and the IRS announced a modification of the “use it or lose it” rule for health care flexible spending arrangements. The modification guidance permits employers to allow plan participants to carry over up to $500 of their unused health FSA balances remaining at the end of a plan year. The State of New York has not changed the Health Care Spending Account rules at this time; the old “use it or lose it” rule is still in effect. Employees should not assume that the changes will be adopted when calculating their annual election amounts.