COMPTROLLER'S SEAL STATE OF CONNECTICUT 55 ELM STREET
HARTFORD, CONNECTICUT
06106-1775
Telephone: (860) 702-3480
Facsimile:(860) 702-3556
HEALTH CARE COST
CONTAINMENT COMMITTEE
STATE OF CONNECTICUT
OFFICE OF THE STATE COMPTROLLER
HEALTHCARE POLICY & BENEFIT SERVICES DIVISION

DIVISION MEMORANDUM 2014-05

TO THE HEADS OF ALL STATE AGENCIES

September 23, 2014

ATTENTION:   Personnel and Payroll Officers, Chief Administrative and Fiscal Officers, and Business Managers
SUBJECT:   Open Enrollment for Dependent Care Assistance Program and Medical Flexible Spending Account Program

I. INTRODUCTION

The purpose of this memorandum is to (1) announce the annual open enrollment for the Dependent Care Assistance Program (DCAP) and the Medical Flexible Spending Account (MEDFLEX), and (2) advise of the availability of the Qualified Transportation Account (QTA) program. All of these programs allow participants to pay eligible expenses on a tax-free basis.

II. ANNUAL OPEN ENROLLMENT

The open enrollment period for the 2015 Plan Year for the DCAP and MEDFLEX begins October 1, 2014 and ends October 31, 2014. This is a month earlier than prior years to provide sufficient time for confirmation of employee eligibility.

Progressive Benefit Solutions (PBS), the third party administrator, participated in the Health Benefits Open Enrollment fairs during May 2014 and June 2014 to provide information about the plans. For that reason, this announcement is the only statewide communication that will be issued to employees regarding the 2015 Plan Year open enrollment. We are asking agencies to display the attached DCAP and MEDFLEX flyers on agency bulletin boards and to send out a mass e-mail to agency personnel about the open enrollment period. If you believe that your agency's employees would benefit from an onsite session about these programs, please contact the Employee Benefits Unit at the number below to schedule one.

III. PROCESSING PROCEDURES

A. Enrollment Procedures:

Employees interested in participating in the programs are responsible for obtaining the necessary enrollment forms and meeting all associated deadlines. Current participants in the DCAP and MEDFLEX will be informed of open enrollment by mail.

Employees who fail to enroll before the deadline will not be permitted to sign up for the DCAP or MEDFLEX for Plan Year 2015. All election forms must be submitted by October 31, 2104. No late applications will be accepted; no exceptions will be made.

Employees who are out on a leave of absence (including those workers compensation) should not enroll in the DCAP or MEDFLEX during the annual open enrollment period. They will have 31 days after returning to work to enroll in the plans. New employees will have 31 days after the date of hire to join these plans.

B. Payroll Procedures:

PBS will perform payroll processing for those who enroll in DCAP, MEDFLEX and the QTA. Agencies are not responsible for processing enrollment applications.

C. Election Changes:

Once MEDFLEX and DCAP elections are made for Plan Year 2015 they cannot be changed unless, the Participant:

  1. Experiences a family status change, such as marriage, divorce, death of a spouse or dependent, birth or adoption of a child, or changes in a spouse's employment status; or
     
  2. Terminates employment.

Any mid-year elections due to status changes can be made by submitting a DCAP or MEDFLEX Mid-Year Enrollment Form to PBS within 31 days of the qualifying event.

D. Application Forms:

Employees may download open enrollment forms from the OSC web site: http://www.osc.ct.gov/benefits/suppbene.htm , the PBS web site: www.ctpbs.com  or by contacting PBS toll free at 1-866-906-8023. The Open Enrollment form MEDFLEX is Form CO-1306. For the DCAP, the Open Enrollment Form is the CO-1310. Mid-Year election changes for the MEDFLEX will be submitted using the CO-1306a; for the DCAP mid-year changes should be reflected on the CO-1310a. To avoid confusion, Mid-Year change forms will not be posted until after open enrollment has ended. The enrollment form for the QTA is CO-1312.

IV. CHANGE TO THE MEDFLEX "USE IT OR LOSE IT" RULE FOR

The MEDFLEX Plan has adopted an IRS- approved change to the "use it or lose it" rule. Under the previous "use it or lose it" rule all unused funds in a member's MEDFLEX account not claimed for eligible expense by the end of the plan year's 90-day run-out period plan were forfeited.

Under the new rule a MEDFLEX participant can carry over a maximum of $500 in unspent funds from one plan year to the next. This means that members with MEDFLEX balances of $500 or less from Plan Year 2014 can use those funds for eligible expenses during Plan Year 2015. Unused 2014 Plan Year funds over $500 will be forfeited after the run-out period ends on March 31, 2015.

If an employee participated in the MEDFLEX during Plan Year 2014 but does not enroll for Plan Year 2015, that member (if still employed) will be able to use up to $500 in unspent MEDFLEX funds for eligible expenses incurred during Plan Year 2015. However, to avoid payment of unnecessary administrative costs, unspent balances of less than $25 will be forfeited for 2014 participants who do not enroll for Plan Year 2015.

V. CONTRIBUTION LIMITS

For MEDFLEX, the maximum deferral for Plan Year 2015 is $2,500. The minimum contribution is $520. These amounts are not affected by any funds carried over from a prior plan year.

For DCAP, the maximum deferral for Plan Year is $5,000. If you are married, filing separately, your maximum pre-tax deferral will be $2,500. The minimum Plan Year contribution for DCAP is $520.

For QTA (Qualified Transportation Account), the minimum monthly contribution for QTA is $20. The maximum monthly amount a participant can defer is $130 for Transit and $250 for Parking.

VI. CONCLUSION

Your assistance in making these programs accessible to your agency's employees is appreciated. These benefits help employees save money on necessary expenses by reducing their taxable income.
Questions concerning the DCAP and MEDFLEX open enrollment period or the QTA may be directed to PBS at the 1-866-906-8023.

Questions pertaining to this memorandum may be directed to the Healthcare Policy & Benefit Services Division, Employee Benefits Unit at (860) 702-3570.

Very truly yours,

Thomas C. Woodruff, Ph.D., Director

Attachments:

DCAP Open Enrollment
Medflex Open Enrollment

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