New IRS Rules for FSA Accounts in Response to COVID-19
Updates as of January 2021
FY2020 Plan Year (07/01/2019 – 06/30/2020)
HCSA ParticipantsThe deadline to incur expenses has been extended!
DCAP ParticipantsThe deadline to incur expenses has been extended!
As a reminder: virtual day camps are not an eligible expense
Please use our live chat feature at the bottom of the screen, or see below for the full list of contact options.
Click the button below if you are a new hire looking to enroll in the GIC FSA. This link will take you to an electronic form to complete and submit online.
Requests must be made no later than 21 calendar days from your date of hire. Upon enrollment, your request will be automatically sent to your agency GIC Coordinator.
If you are a current enrollee who has experienced a status change and is looking to either newly enroll in the GIC FSA programs or make a change to your current election(s), please use the “Change in Status” form located below.
If you’ve experienced a change in status and you want to either make changes to your FSA or enroll for the first time, please click the button below to complete your change request.
Your request must be made no later than 60 calendar days from the date your change occurred. Once you submit your request, it will be automatically sent to your agency GIC Coordinator. Please note, you will still need to provide your coordinator with the appropriate documentation to verify your status change before you can be enrolled or before your election changes can be made.
Your elections are withdrawn from your pay and placed in your account before federal or state income taxes, or federal payroll tax are applied. Commonwealth of Massachusetts employees save on average $300 for everyone $1,000 contributed in the Health Care Spending Account (HCSA)
Also, Health Care Spending Account (HCSA) participants have access to their entire election at any point during the plan year. This feature allows you to manage your out-of-pocket costs more effectively since you can draw funds from your Health Care Spending Account (HCSA) when you incur a large expense early in the plan year.
Expenses that diagnose, treat, cure, or mitigate an injury, illness, or condition are qualified for reimbursement through a Health Care Spending Account (HCSA). This definition includes:
Qualified Dependent Care FSA expenses include day care; preschool, before- and after-school programs; and summer day camps. You can reimburse these expenses when you and your spouse work or go to school full-time and the family member incurring the expenses is a tax dependent under age 13 or over age 13 and incapable of self-care (for example, a disabled child or a parent who’s a tax dependent who lives with you).
Health Care Spending Account (HCSA): You can reimburse qualified expenses that you, your spouse, your tax dependents, and your children to age 26 incur. Neither you nor they have to be enrolled on the Group Insurance Commission health insurance for their expenses to qualify for reimbursement from your Health Care Spending Account (HCSA). Note that the list doesn’t include domestic partners or ex-spouses. You can’t reimburse their qualified expenses, even if they’re enrolled on your medical plan or you’re required to pay all or a portion of an ex-spouse’s expenses by a divorce agreement.
Dependent Care Assistance Program (DCAP): You can reimburse qualified expenses incurred by a child under age 13, a disabled child over age 13, or another tax-dependent (such as a parent) incapable of self-care. These family members must live with you more than half the year, and you must incur the expenses so that you (and your spouse, if married) can work full-time or attend school full-time.
The IRS maximum election to a Health Care Spending Account (HCSA) can’t exceed $2,750, the GIC’s minimum enrollment is $250 for the Health Care Spending Account (HCSA). The $2,750 figure is indexed for inflation.
The IRS maximum Dependent Care Assistance Program (DCAP) election is $5,000 (or $2,500 if married and filing separate tax returns). The $5,000 figure is not indexed for inflation.
We provide a simple worksheet to help you calculate our Health Care Spending Account (HCSA) election. Be careful not to contribute more than you expect to spend since you forfeit unused elections.
You can’t project with precision your future qualified Health Care Spending Account (HCSA) expenses. But if you receive regular care (prescription drugs, counseling, chiropractic visits) or expect to incur some non-regular expenses (inpatient stay, post-surgical physical therapy, vision-correction surgery, restorative dental work), you should make an election sufficient to cover those expenses.
Dependent Care Assistance Program (DCAP) participants rarely need to project expenses. The $5,000 federal election limit typically covers only a fraction of their total costs. They typically elect $5,000 and rarely face the risk of forfeiture, since they usually can adjust their elections with a qualifying life event. Be mindful of your child’s 13th birthday during the plan year, as expenses at 13 are not covered.
Your Health Care Spending Account (HCSA) election limit is $2,750 per employer. If you work more than one job, you may qualify to enroll in more than one Health Care Spending Account (HCSA). If your spouse is eligible for benefits with their employer, they can enroll in their company’s Health Care Spending Account (HCSA). And your children who are benefit-eligible at their place of work can open a Health Care Spending Account (HCSA) to reimburse their qualified expenses. (You can reimburse their expenses as well, as long as they’re your dependent or under age 26.)
Your Dependent Care Assistance Program (DCAP) limit is $5,000 per calendar year (weekly maximum of $96.15; biweekly maximum $192.30). If you’re married and file separate tax returns, your election limit is $2,500. You can’t have multiple Dependent Care FSAs in a single year, and you and your spouse can’t elect $5,000 each.
To comply with IRS regulations, you may only enroll in either plan, change your contribution, or terminate your election during the Plan Year if you can demonstrate a qualified “change in status.” The following events are considered valid changes in status under IRS regulations:
A “change in status” request can be made by completing the HCSA/DCAP Enrollment/Change in Status e-form available on the Benefit Strategies website. This request must be made no later than 60 days after the status change occurs. The completed online form will be sent to your GIC Benefits Coordinator. You will need to provide your Benefits Coordinator with documentation verifying a change in status, such as a marriage or birth certificate.
Additional status changes allowed for DCAP
DCAP participants may be allowed to make a corresponding change in their election due to:
Note: Changes by a provider who is your relative are not considered a permissible status change.
You can spend your entire Health Care Spending Account (HCSA) election at any time during the plan year. Your employer continues to take level pre-tax payroll deductions from your paycheck, regardless of your spending.
You can spend your Dependent Care Assistance Program (DCAP) funds only as deposited. Think of your Dependent Care Assistance Program (DCAP) as a tax-free reimbursement account.
Because FSAs elections reduce your taxable income, the Internal Revenue Service (IRS) requires that we make sure you spend your funds on qualified expenses only. To confirm that an item is qualified, we need to know the following information:
No. When possible we will auto-substantiate many claims using methods approved by the IRS. These methods include:
The most common items for which we need documentation are dental and vision expenses and medical-plan deductibles and coinsurance. These expenses typically are in odd amounts. And since these providers also offer services that aren’t qualified, we can’t substantiate the expense merely by knowing the type of provider.
It’s easy. When we request substantiation by e-mail (if we have your e-mail address) or USPS, we provide clear instructions. Most participants take a picture of the detailed receipt with a smartphone and upload the picture via our mobile app. You can also e-mail, fax, or mail it to us.
Be sure your receipt(s) include:
Per the new CARES Act, these items no longer require a prescription! Debit Cards will be updated to allow eligible over the counter items to be purchased, but depending on the merchant this could take time. If your debit card does not work, use another method of payment to purchase the items and file a manual claim via our mobile app or online portal. You can also email, fax or mail it to us.
When you present the debit card as payment, the card will determine which expenses are qualified and pay for those items. You’ll then be left with a balance for non-qualified expense. You pay that balance with personal funds.
If I make elections to both accounts, do I receive two separate debit cards?
No. We configure the card with separate purses of money for each account type. When you present your card at a dental office, pharmacy, or physician office, for example, funds are drawn from your Health Care Spending Account (HCSA). If your transit and/or parking provider accepts credit cards, your expenses are drawn from your Qualified Transit and/or Parking benefit.
No. Each election is limited to qualified expenses associated with that particular account.
You forfeit any unused balances at the end of the year. The GIC FSA programs offer a 2 1/2 month grace period; July 1-September 15 occur eligible expenses and until October 15th to submit claims.
You have 30 days to file claims for qualified expenses that you incur during the plan year and 2 1/2 month grace period, no later than October 15th .
If you leave state service during the Plan Year whether you resign, retire, or involuntarily separate, your participation in HCSA and DCAP will terminate at midnight on the day of termination and your HCSA debit cards will be inactivated. You will still be able to submit claims for eligible health care expenses incurred on or before your last day of active employment. For the Plan Year of July 1, 2020-June 30, 2021, you have until October 15, 2021 to submit all claims. See the following information about using your account after you terminate state service:
Health Care Spending Account (HCSA): Active state employees who are GIC benefits eligible may participate in the HCSA program. Enrollment in one of the GIC’s benefit plans is not required. New employee coverage begins on the first day of the month following 60 calendar days from the first date of employment or two calendar months, whichever comes first. Employees must work at least 18.75 hours in a 37.5 hour workweek or 20 hours per 40 hour workweek. To maintain eligibility, you must continually meet the hourly minimums. You may claim health care expenses under the HCSA plan for you, your spouse, and/or your eligible tax dependents for claims incurred after your effective date
Dependent Care Assistance Program (DCAP): Active state employees who are GIC health care benefits eligible and have eligible dependent care expenses, for a dependent child under the age of 13 and/or a disabled adult dependent, that are necessary for the employee (and spouse, if married) to be able to work may enroll in the DCAP program. Employees hired during the Plan Year are eligible for DCAP on the first day of employment. Employees must work at least 18.75 hours in a 37.5 hour workweek or 20 hours per 40 hour workweek. To maintain eligibility, you must continually meet the hourly minimums.
In response to the ongoing COVID-19 pandemic the IRS has recently released the Consolidated Appropriations Act. These new guidelines allow the GIC’s enrolled participants greater flexibility and opportunity to use all or most of their funds that were contributed.
For more information please click hereAccount Access
Use the button below to log into your employer account.Login to Portal
If you are a GIC Agency Coordinator looking to request a refund or re-classification of funds for one or more of your employees, click below to request the change.Payroll Refund and Re-classification Request
Important deadline information:this form must be completed within 60 calendar days of the payroll error date.
If you are a GIC Coordinator looking to report an employee’s end of state employment, due to employee not completing the status change form, click below to report the employment end informationCoordinator Termination Form
Important deadline information:this form must be completed within 60 calendar days of the final date of employment.
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