The Health Care Spending Account (HCSA) and Dependent Care Assistance Program (DCAP) allow you to pay for certain eligible expenses with pre-tax money deducted from your paycheck on a calendar-year basis. Please note: funds not spent during the eligible period are lost. (See Period of Eligible Expenses below.) Each participant is encouraged to carefully calculate the amount he or she elects to contribute each year.
- FSA Election Worksheets and Eligible Expenses List
- Dependent Care FSA DCA Extended Eligible Expenses
- FSA Reimbursement Request Claim Form
- FSA Benefit Plan Enrollment Form
- Flex Spending Account (FSA) Participant Handbook
Health Care Spending Account
HCSA allows you to pay for $250 - $2,500 of annual eligible health care expenses on a pre-tax basis. Eligible expenses include most medical co-pays, eyeglasses and contact lenses not covered by your health or vision insurance, orthodontia and dental expenses not covered by your dental insurance and more. See resource #1 above.
As a participant in the HCSA you receive two debit cards, enabling you to pay eligible expenses directly rather than submitting a claim form. You must still retain receipts in case the HCSA/DCAP plan administrator requires a copy of the receipt or in case of audit by the IRS. You may purchase two additional cards at $5.00 per set. Debit cards cannot be used for DCAP expenses.
Dependent Care Assistance Program (DCAP)
DCAP allows you to pay for $1 - $5,000 of qualified dependent care expenses on a pre-tax basis. Eligible expenses may only be incurred for dependents under 13 years of age for care while you are working are and include day care day camp, after school programs, nursery school and more. Please note, you may either use the DCAP program or claim the child care tax credit when you file your taxes, not both. Additionally, if you have an older IRS dependent who lives with you at least 8 hours per day and requires someone to come into the house to assist with day-to-day living, you can claim these expenses through your DCAP. See resource #1 above.
How to Apply
Benefitted employees may apply to participate in the HCSA and/or DCAP when completing initial hiring paperwork or during annual open enrollment (October/November) any year for participation in the following calendar year. Employees must proactively re-enroll during annual open enrollment to continue participation in the following calendar year.
HCSA and DCAP Participation Fees
The monthly, pre-tax participation fee for one or both plans is $2.50.
Filing a Claim for Reimbursement
HCSA participants may use the debit card issued by the plan administrator to pay for eligible expenses directly or submit a claim form (see resource #3 above) to the plan administrator requesting reimbursement via check or direct deposit.
DCAP participants may request reimbursement of eligible expenses up to the amount contributed to the plan calendar-year-to-date by submitting a claim form (see resource #3 above) to the plan administrator.
Period of Eligible Expenses
Elections/contributions made in one plan (calendar) year may be spent through March 15 of the following calendar year as long as the expense is submitted for reimbursement by April 15 following the plan year. For example, participants may spend calendar/plan year 2017 contributions through March 15, 2018 as long as the expense is submitted to the plan administrator for reimbursement by April 15, 2018.
Impact of a Leave of Absence on HCSA and DCAP
Paid leave has no impact on HCSA; for DCAP the IRS regulations state that you must be at work in order to incur DCAP-eligible expenses. See resource #5 above.
Leaves Not Paid by the University
Health Care Spending Account: You may not incur expenses eligible for HCSA reimbursement during an unpaid leave. Bi-weekly deductions upon return to University payroll will be increased to meet your full annual election amount. See resource #5 above.
Alternatively you may:
- Arrange with UMass Human Resources to have a pre-tax deduction lump sum taken from your last check before your unpaid leave starts. The deduction must cover the period of leave during which no payroll deductions will be taken. With this option, your HCSA debit card remains active and you are able to continue using your HCSA funds and submit claims.
- Arrange with the plan administrator to pay your contributions and administration fees directly to them (post-tax) while on leave. This process must be requested directly of the plan administrator before your unpaid leave starts. Premiums may be paid by check or money order no later than the pay date on which the contribution would have been payroll-deducted. If payments are made timely your HCSA debit card remains active and you may continue to incur eligible expenses.
Dependent Care Assistance Program: IRS regulations state that you must be at work in order to incur DCAP-eligible expenses. Payroll deductions will resume upon return to work at an increased level in order to meet the annual election amount. See resource #5 above.
HCSA/DCAP: Can I change my election amount mid-year?
FSA Qualifying Events
You may enroll or change your calendar-year FSA election within 30 days of a qualifying event (see list below) by completing and submitting a HCSA/DCAP Change Form with proof of that qualifying event at the Human Resources Employee Service Center in room 325 Whitmore Administration Building (open M-F, 8:30am-5:00pm, closed holidays). Please note that the qualifying event must correspond with the change in election (i.e. marriage constitutes an increase in election; divorce constitutes a decrease in election) and supporting documentation must be provided at the time of enrollment or change of election.
Qualifying events include the following. If you are unsure whether an event qualifies as an IRS- qualified event please contact the FSA plan administrator.
- Change in legal marital status.
- Change in number of dependents.
- Change in employment status.
- Change in work schedule which changes eligibility for the program.
- Dependent satisfies or ceases to satisfy eligibility requirements.
- Judgment, decree or order pertaining to child or spouse.