Enrollment

The Health Care Spending Account (HCSA) and Dependent Care Assistance Program (DCAP) enrollment is on an annual basis from January to December. Open enrollment will take place in the fall of each year and employees must re-enroll each year. The HCSA, DCAP and program fee deductions are taken from the employee’s pay on a pre-tax basis, reducing their federal and state income taxes. Employees can elect a pre-tax deduction of a minimum to a maximum amount noted on the HCSA/DCAP GIC Flexible Benefit Plan Enrollment Form and on the GIC website. Employees are allowed to enroll in HCSA/DCAP during open enrollment, as a new hire or with a change in status. All updates, including forms, brochures, new policies and minimum/maximum contributions for each plan year are available on the GIC website.

ELIGIBILITY AND EFFECTIVE DATES

HCSA: Active state employees who work half-time or more and are eligible for health benefits with the GIC are eligible for HCSA. Enrollment in a GIC benefit plan is not required. The coverage effective date is the same as for health benefits (see the first section of this manual).

DCAP: Active state employees who work half-time or more and have employment-related expenses for a dependent child under the age of 13 and/or a disabled adult dependent are eligible for DCAP. Employees can enroll in DCAP effective as of the date of hire.

OPEN ENROLLMENT PROCEDURES

            A. EXISTING ENROLLEES

      1. During open enrollment, current enrollees should re-enroll online at www.benstrat.com.  The employee must print, sign and date the online confirmation page and give it to the payroll office.
      2. Enter the HCSA/DCAP/HCSAF deductions into HR/CMS or the UMASS payroll system. For instructions see the HR/CMS job aid for general deductions or contact the HR/CMS help desk.
      3. File a copy of the application in the employee’s personnel file. Do not send forms to the GIC or to the HCSA/DCAP carrier.

            B. NEW ENROLLEES

      1. Instruct the employee to complete, sign and date the HCSA/DCAP GIC Flexible Benefit Plan Enrollment Form. See the Direct Deposit Instructions on form.
      2. Complete the Payroll Coordinator section of the form. Indicate your Department ID# (ABC/1000).
      3. Enter the HCSA/DCAP/HCSAF deductions into HR/CMS or the UMASS payroll system. For instructions see the HR/CMS job aid for general deductions or contact the HR/CMS help desk.
      4. Send the original or a copy of the completed and signed form to the HCSA/DCAP carrier by mail or fax. Note: Failure to send a form to the HCSA/DCAP carrier will result in an employee not receiving reimbursement for an eligible HCSA and/or DCAP expense.
      5. File a copy of the application in the employee’s personnel file. Do not send forms to the GIC.

NEW HIRE PROCEDURES

    1. Instruct the employee to complete, sign and date the HCSA/DCAP GIC Flexible Benefit Plan Enrollment Form. See the Direct Deposit Instructions on form.
    2. Complete the Payroll Coordinator section of the form. Indicate your Department ID# (ABC/1000).
    3. Enter the HCSA/DCAP/HCSAF deductions into HR/CMS or the UMASS payroll system. For instructions see the HR/CMS job aid for general deductions or contact the HR/CMS help desk.
    4. Send the original or a copy of the completed and signed form to the HCSA/DCAP carrier by mail or fax. Note: Failure to send a form to the HCSA/DCAP carrier will result in an employee not receiving reimbursement for an eligible HCSA and/or DCAP expense.
    5. File a copy of the application in the employee’s personnel file. Do not send forms to the GIC.

CHANGE IN STATUS

Employees may during the year enroll in HCSA/DCAP, change their contribution, or terminate their election if there is a change in status according to IRS guidelines listed below. Change of election due to a status change must be made within 30 days of the qualifying event. If you are unsure whether an event qualifies as an IRS-qualified event, contact the HCSA/DCAP carrier:

  • 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.

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).

To process these changes:

    1. Instruct the employee to complete, sign and date the HCSA/DCAP GIC Flexible Benefit Plan Enrollment Form. See the direct deposit instructions on the form.
    2. Complete the Payroll Coordinator section of the form. Indicate your Department ID# (ABC/1000).
    3. Obtain from the employee a document establishing a change in status.
    4. Acceptable proof includes a marriage or birth certificate or a letter from an employer stating that coverage has been terminated.
    5. Enter the HCSA/DCAP/HCSAF deductions into HR/CMS or UMASS payroll system. For instructions see the HR/CMS job aid for general deductions or contact the HR/CMS help desk.
    6. Send the original or a copy of the completed and signed form to the HCSA/DCAP carrier by mail or fax. Note: Failure to send a form to the HCSA/DCAP carrier will result in an employee not receiving reimbursement for an eligible HCSA and/or DCAP expense.
    7. File a copy of the application in the employee’s personnel file. Do not send forms to the GIC.

TERMINATION OF EMPLOYMENT

If an employee leaves state service during the Plan Year whether he/she resigns, retires or involuntarily separates, participation in HCSA and DCAP will terminate as of midnight the day of termination.

HCSA: The employee will be able to submit claims for eligible health care expenses incurred on or before the last day of active employment. In order for the employee to use the HCSA account after terminating state service, the employee may elect to contribute to the HCSA account under COBRA by making direct payments on an after-tax basis.

DCAP: The employee may file claims for eligible dependent care expenses against the account balance until the account is exhausted. They will not be reimbursed in excess of what they have contributed to the plan at that time. Claims can be filed with dates of service through the end of the Plan Year.

HCSA/DCAP carrier must receive all completed claims by April 15.

To process a termination of employment:

    1. Inactivate the HCSA/DCAP/HCSAF deductions in HR/CMS or the UMASS payroll system.
    2. HCSA/COBRA: Give the employee the Health Care Spending Account Continuation Coverage Under COBRA General Notice and Election Form and the COBRA Acknowledgement Form for you and the employee to sign and date.
    3. File the COBRA Acknowledgement Form in the employee’s personnel file. (Do not send the form to the GIC or the HCSA/DCAP carrier.)
    4. The employee must send the Election Form to the HCSA/DCAP carrier within 60 days from the date of their COBRA Notice.
    5. The HCSA/DCAP carrier will determine eligibility and notify the employee either by mail or email.
    6. The HCSA/DCAP carrier will provide COBRA payment information. The amount to the employee will include a 2% administrative fee.

UNPAID LEAVE OF ABSENCE

When an employee goes on an unpaid leave of absence there are several options to discuss:

  • The employee may have the deductions for the period of the unpaid leave taken on a pre-tax basis from the last paycheck prior to the leave provided there are sufficient funds. If the employee elects this option, he/she may continue to submit HCSA claims for reimbursement for eligible expenses incurred during the unpaid leave of absence.
  • The employee may choose not to contribute for the pay periods while on unpaid leave of absence. In this case, the employee will not be reimbursed for any expenses incurred during the unpaid leave of absence.
  • The employee may elect to continue to contribute to the HCSA account on a pay-as-you-go basis (after-tax).  The employee must notify the payroll coordinator and the HCSA/DCAP carrier in order to set up direct payments.  The employee will be able to submit eligible claims for reimbursement during the unpaid leave of absence.  There is no tax benefit to this option.
  • Returning from an unpaid leave of absence is not a qualifying event to terminate the HCSA account. If the employee returns to the payroll during the Plan Year there are several options:
    • The employee may continue with the original annual election with payroll deductions recalculated for the remainder of the year; or
    • The employee can also choose to lower the election to the amount contributed as long as he/she has not spent more than was contributed to the account. For example: If the employee elected $2,000 as the HCSA goal amount and had payroll deductions of $1,000 before the unpaid leave, if the employee did not exceed $1,000 in expenses the employee can lower the goal amount to $1,000 for the remainder of the year. However, if the employee used more than the $1,000 contribution, say $1,500, then the employee can only lower the goal amount to $1,500 for the remainder of the year.
  • DCAP claims will only be reimbursed based on the funds in the account and cannot be used for dates of service while on an unpaid leave of absence.  If the employee returns to the payroll during the Plan Year, he/she can adjust the election to the payrolls already posted to the account or continue with the goal amount originally elected recalculated over the remainder of the pay periods.
  • If the leave of absence goes into the next plan year, the employee is not eligible to enroll in the new plan year until he/she returns to work.
  • Very Important: If the employee does not elect to prepay the HCSA pre-tax deductions or make direct payments (pay-as-you-go), expenses incurred during the unpaid leave of absence will not be eligible for reimbursement from future deposits made to the account.

To process an unpaid leave of absence:

    1. Inactivate the HCSA/DCAP/HCSAF deductions in HR/CMS or the UMASS payroll system.
    2. If the employee elects to prepay the HCSA deductions from the last paycheck for the period of the unpaid leave of absence:  a) enter the HCSA prepay amount and then inactivate the HCSA deduction after payroll runs; b) adjust the HCSAF amount in order to prepay the fee from the last paycheck and then inactivate the HCSAF after payroll runs.

 


This information provided by the Group Insurance Commission.