Heathcare policy & Benefit services division header

DIVISION MEMORANDUM 2017-06
TO THE HEADS OF ALL STATE AGENCIES
September 20, 2017

ATTENTION:   Personnel and Payroll Officers, Chief Administrative and Fiscal Officers, and Benefits Managers
SUBJECT:   Open Enrollment for Dependent Care Assistance Program and Medical Flexible Spending Account Program for Plan Year 2018

I. INTRODUCTION

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

II. ANNUAL OPEN ENROLLMENT

The open enrollment period for the DCAP and MEDFLEX 2018 Plan Year begins Sunday, October 1, 2017, and ends Tuesday, October 31, 2017. Please display the attached DCAP and MEDFLEX fliers on agency bulletin boards and send a mass email informing your agency's employees about the open enrollment period no later than September 25, 2017. It is also recommended that a reminder email by October 20, 2017.

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 with the plans' administrator, Progressive Benefit Solutions (PBS).

III. PROCESSING PROCEDURES

A. Online Open Enrollment Process

An online open enrollment process is available. To use the online method, employees should go to PBS website, www.ctpbs.com  and click on the link to "enroll online". Follow the prompts to enroll in the plan(s) of your choice. The online enrollment process will open on October 1st and be shut down at 11:59 p.m. on October 31st.

Most employees should be able to enroll online. PBS has a database with the employee numbers and basic demographic information for those eligible to participate in these programs. If your name/employee number is not in the database, you will need to fill out a paper enrollment form.

Those planning to retire during Plan Year 2018 will be permitted to enroll online but will also need to submit a paper enrollment form for the 2018 Plan Year.

B. Open Enrollment Forms

Employees that wish to submit paper enrollment forms are responsible for returning them to PBS before the Saturday, October 31st deadline. Current participants in the DCAP and MEDFLEX will receive notice of the open enrollment and forms directly from PBS.

Paper forms can be returned by mail, fax or email. Forms sent by mail must be postmarked no later than October 31, 2017. Employees who miss the enrollment deadline will not be permitted to participate in the DCAP or MEDFLEX for the 2018 Plan Year. No late applications will be accepted; no exceptions will be made.

Employees who are out on a leave of absence should not enroll in the DCAP or MEDFLEX until they return to work. They will have up to 31 days after returning to work to enroll in the plans. New employees have 31 days after the date of hire to enroll in these plans.

Form CO-1306 should be used to enroll in MEDFLEX. For DCAP enrollment Form CO-1310 should be used. The forms are available from the PBS web site: www.ctpbs.com  or by contacting PBS toll free at 1-866-906-8023, or from the Comptroller's website, http://www.osc.ct.gov/agencies/forms/index.html.

C. Payroll Procedures
PBS will perform payroll processing for all DCAP, MEDFLEX, and QTA enrollments. Agencies are not responsible for processing enrollment applications.

D. Mid-Year Election Changes

Once MEDFLEX and DCAP elections are made for Plan Year 2018 they cannot be changed unless, a participant experiences a qualifying status change, such as marriage, divorce, death of a spouse or dependent, birth or adoption of a child, or a spousal employment status change.

Any mid-year election change must be submitted to PBS within 31 days of the qualifying event and must be consistent with the status change. Forms for mid-year elections for the MEDFLEX, CO-1306a, and DCAP, Form CO-1310a, will be posted online after open enrollment has ended.

IV. "USE IT OR LOSE IT" RULE
The DCAP and MEDFLEX are subject to the Internal Revenue Service's "use it or lose it rule", which means that amounts set aside in these tax-free accounts will be forfeited unless they are used for eligible expenses during the Plan Year. For this reason, employees are urged not to set aside more in the DCAP or MEDFLEX than is needed for anticipated Plan Year expenses.

MEDFLEX participants can carry over up to $500 in unused funds to cover eligible expenses during the upcoming plan year. MEDFLEX funds over $500 will be forfeited after the run-out period ends on March 31, 2018.

If an employee participated in the MEDFLEX in 2017 but does not enroll for 2018, that member (if still employed) can use up to $500 in unspent MEDFLEX funds for eligible plan year expenses. However, to prevent the Plan from being assessed unnecessary administrative costs for those who choose not to enroll for Plan Year 2018, unused balances under $25 will be forfeited after the run-out period ends on March 31, 2018.

V. CONTRIBUTION LIMITS

A. MEDFLEX
The minimum contribution is $520. The maximum deferral for MEDFLEX is established by the Internal Revenue Service (IRS) and is currently $2,600. The maximum election is not affected by any funds carried over from the previous plan year. The IRS typically announces increases in the medical FSA maximum during the third week of October. Employees can elect to defer the "IRS maximum" for 2018 either online or by checking the applicable box on the enrollment form; this means that their annual amount will be the new maximum contribution limit should the IRS announce a change after they have submitted their open enrollment election

B. DCAP
For DCAP, the maximum deferral for Plan Year 2018 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.

C. QTA
For the QTA, the minimum monthly contribution is $20. The maximum monthly amount a participant can defer is $255 for Transit and $255 for Parking. Employees can elect to join this plan or make changes to election amounts at any time. The applicable form to enroll in the QTA is the CO-1312.

VI. CONCLUSION
These programs 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 2018.

Questions concerning the DCAP and MEDFLEX open enrollment period or the QTA 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

Attachments
DCAP Open Enrollment Flyer
MEDFLEX Open Enrollment Flyer

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