Questions & Answers

1. What are the benefits of participating in the DCRP?

There are several benefits you get from participating in the DCRP.

  • You are in control - You make the decision to participate in this plan. You are in control of how much you want to contribute to your DCRP account—up to $5,000 per year.
  • Saves you money - Contributions to the plan are deducted from your paycheck before taxes. That means you will not pay taxes on the amount of money you contribute to this plan. It lowers your taxable income and saves you money in taxes.
  • Manage your money - Contributions come out of your paycheck in equal installments. Now you can have a fund that is set aside to pay for dependent-care expenses. Having a fund set aside for dependent-care expenses can give you the ability to better manage your money and budget.
  • Tax free reimbursements - Reimbursements are tax free when you use the money to pay qualified dependent-care expenses.

2. What’s in it for the city?

There are tax advantages for you to participate, and there are tax advantages for the city. You win by reducing your taxable income. The city benefits by reducing the amount of FICA tax it contributes on your behalf. We’re both SMART.

3. Can I put money in this plan to cover the cost of my father’s adult daycare?

Yes. You may request reimbursement for your father’s daycare expenses if he was physically or mentally not able to care for himself, lived with you for more than half the year; and either:

  • Was your dependent; or
  • Would have been your dependent except that
    a. He received gross income of $3,000 or more, or
    b. He filed a joint return

4. What if I change my mind during the year?

You will have to decide how much to contribute to this plan during the enrollment period. Once you make your election for the year, you can change only if you have a qualifying family status change, like birth or adoption of a child, you acquire a qualified dependent over age 13, or you lose a qualified dependent. Then you may make a change that is consistent with the family status change. (A child turning age 13 is not a family status change.)

Remember, a dependent is a person, other than you or your spouse, for whom you can claim an exemption. To be your dependent, a person must be your qualifying child (or your qualifying relative.)

5. Where can I find out what is a reimbursable expense?

  • Page 1 of this brochure has a list of examples.
  • IRS Publication 503 at www.irs.gov, or
  • You may also contact the plan administrator at www.aflac.com or by phone at 1-800-992-3522.

6. Do I have to wait until my contribution is deducted from my paycheck before I can file a claim for reimbursement?

No. You may file an eligible claim before your contribution is made to your account, however, FLEXONE will hold it until you make contributions that equal the amount of the claim.

While the Healthcare Flexible Spending Account plan allows you to be reimbursed for eligible expenses before you make contributions to the plan, the DCRP requires you to deposit money before claims are reimbursed.

7. What happens if I have money left over at the end of the year?

The IRS prohibits the plan from returning any money to you that you have not incurred and claimed by the end of March, 2009. You will forfeit any money left in your account if:

  1. You do not incur enough eligible expenses
    within the plan year (Jan. 1 - Dec. 31) to
    use up the amount that you elected, or
  2. You do not incur enough eligible expenses before your employment with the city ends, or
  3. You do not claim your reimbursement within 90 days of the end of the plan year, Dec. 31

8.What is the difference between the Dependent Care ReimbursementPlan and the Healthcare Flexible Spending Account?

At first glance, the Dependent Care Reimbursement Plan and the Healthcare Flexible Spending Account look similar. They are both designed to save you money in tax savings, they are both “Flexible Spending Accounts” as defined by the Internal Revenue Service, and both are administered by FLEXONE.

However, these two benefits are separate plans, designed for two different purposes. The Dependent Care Reimbursement Plan (DCRP) is a pre-tax account; but, only expenses incurred for dependent day care can be reimbursed from this account. The DCRP will not reimburse you for any health care expenses—even if they are for your dependents.
Some people may think that the DCRP is for dependent health care expenses, while the HFSA is for your own health care expenses. This is incorrect. Eligible DCRP expenses include:

  • licensed nursery school and day care centers for children,
  • licensed day care centers for disabled or elderly parents,
  • food and education provided as part of preschool care services.

Please read your Healthcare Flexible Spending Account guide for more detailed information about the HFSA benefit. The plan year is May through April. Enrollment for that plan is in March.

9. Can I transfer money from my Dependent Care Reimbursement Plan to the Health Care Flexible Spending Account?

No. While there are many similarities between the DCRP and the Health Care Flexible Spending Account, they are separate plans and money cannot be transferred from one to the other—even if you made a mistake by electing the wrong plan. So, please be careful when enrolling in these reimbursement programs. Be sure that you are enrolling in the intended benefit plan.

10. Will my pension benefit be affected by my participation in the Dependent Care Reimbursement Account?

No. Your city pension is calculated on your “base pay,” prior to the DCRP deduction. Your retirement benefit from Social Security is calculated on your taxable earnings - meaning the lower amount.

11. What if I leave my job with the City? Can I get the balance left in my account?

Not unless you have incurred eligible expenses and claim them in the proper time period. Your DCRP benefit ends on your last day of employment with the City. You will only be able to make claims on expenses that you have incurred prior to your last day of employment. Your deductions stop with your last paycheck.

12. When do I have to file a claim?

Claims must be filed within 90 days of plan year end, unless you cease to participate before Dec. 31. In that case, you must file your claim within 90 days after your participation ends. All claims must be incurred while you are a participant.

13. Will FLEXONE reimburse me for every claim I submit?

Reimbursement is based on annual election, amount previously reimbursed, proper documentation, and eligibility of the expense. If your claim is denied, FLEXONE will provide specific reason in writing.


  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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