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DIVISION MEMORANDUM 2016-08

TO THE HEADS OF ALL STATE AGENCIES

October 27, 2016

ATTENTION: Personnel and Payroll Officers
SUBJECT: Revised Maximum Deferral for Medical Flexible Spending Plan for 2017

I. INTRODUCTION

The purpose of this memorandum is to announce a $50 increase in the maximum amount that the IRS permits an employee to set aside for the Medical Flexible Spending Account Program (MEDFLEX) for Plan Year 2017. The maximum deduction for MEDFLEX will now be $2600. There has been no increase in the annual maximum for the Dependent Care Assistance Program (DCAP).

II. ANNUAL OPEN ENROLLMENT

The open enrollment period for the 2017 Plan Year for MEDFLEX and DCAP began on October 1, 2016, and will end at midnight on Monday, October 31, 2016.

III. MODIFICATION OF MAXIMUM MEDFLEX CONTRIBUTIONS FOR 2017

The MEDFLEX allows participants to pay for eligible medical expenses on a tax-free basis. The program is governed by section 125 of the Internal Revenue Code, and the maximum amount of expenses eligible for reimbursement is announced by the IRS each year.

IV. PROCEDURES FOR THOSE WHO HAVE ALREADY SENT IN ENROLLMENT FORMS TO PBS FOR PLAN YEAR 2017

Employees who want to change a previously submitted MEDFLEX deferral election for Plan Year 2017 may do so by submitting a revised enrollment form to the plan's administrator, Progressive Benefit Solutions, LLC (PBS), no later than October 31, 2016. Changes or new enrollments can also be made online until midnight on October 31st by going to the PBS website, www.ctpbs.com.

There will be no extension of the October 31, 2016 end date for open enrollment.

V. CONCLUSION

These benefits help employees save money on necessary expenses by reducing their taxable income. Please make sure that your agency's employees get this information promptly so that they have sufficient time to make elections for 2016.

Questions concerning the DCAP and MEDFLEX open enrollment period may be directed to PBS at 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

 

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