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 plan-year basis. Please note: funds not spent during the eligible period are lost. Each participant is encouraged to carefully calculate the amount he or she elects to contribute each year.
Lists of eligible expenses, enrollment information and the Flexible Spending Account (FSA) Participant Handbook are available on the MA Group Insurance Commission's (GIC) website, linked above and from the GIC's website.
Health Care Spending Account
HCSA allows you to pay for $250 - $2,550 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.
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.
How to Apply
GIC-eligible employees may apply to participate in the HCSA and/or DCAP when completing initial hiring paperwork or during annual open enrollment any year for participation in the following plan year & are provided enrollment information at each of these times. Employees may also submit an enrollment form at the Human Resources Employee Service Center with proof of a mid-plan-year qualifying event. A list of qualifying events is available on the plan administrator's FAQs webpage. Employees must proactively re-enroll during annual open enrollment to continue participation in the following plan 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 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 the plan administrator.
Period of Eligible Expenses
Elections/contributions made in one plan year may be used during the first 2.5 months of the following plan year as long as the expense is submitted for reimbursement by the annual deadline.
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. Please reference the Flexible Spending Account (FSA) Participant Handbook for details and options to pre-pay contributions to avoid an interruption of FSA benefit(s).
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. Please reference the Flexible Spending Account (FSA) Participant Handbook for details and options to pre-pay contributions to avoid an interruption of FSA benefit(s).
HCSA/DCAP: Can I change my election amount mid-year?
FSA Qualifying Events
You may enroll or change your plan-year FSA election within 30 days of a qualifying event by completing and submitting a HCSA/DCAP Change Form with proof of that qualifying event at the Human Resources Employee Service Center. 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.
A list of qualifying events is available on the plan administrator's FAQs webpage.