NYS Flexible Spending Account
It’s that time of year again! The open enrollment period for the NYS Flexible Spending Account (FSA) for 2023 runs from November 1 through December 12, 2022. The FSA is a negotiated benefit which provides eligible employees with the ability to pay for certain expenses with pre-tax dollars. Through the FSA, employees can choose from three different benefits. The Health Care Spending Account (HCSA) lets employees set aside any amount from $100 up to $3,050 for 2023 to pay for eligible health care expenses that are not paid for by health benefits coverage. The Dependent Care Advantage Account (DCAA) allows employees to set aside up to $5,000 in pre-tax dollars for eligible custodial childcare, elder care, or disabled dependent care expenses. The Adoption Advantage Account lets employees pay for eligible adoption-related expenses with pre-tax dollars.
The links to the 2023 FSA Program flyer announcing the open enrolment period, NYS FSA 2023_Flyer ,and the 2023 Enrollment Book which contains much more detailed information about the FSA program, NYS FSA 2023 Enrollment Book, are included for your information and for communication to your members. However, I would like to highlight two new improvements for Plan Year 2023. These enhancements are occurring largely due to our ongoing joint advocacy with other state unions to improve both the value and flexibility of these programs for our members. First, as many of you are aware the DCAA program includes an employer contribution which is made to individual DCAA accounts to help pay for eligible childcare, elder care or disabled dependent care expenses. The amount of the employer contribution, which varies based on a salary-sensitive sliding fee scale, has increased for 2023 by $200. The new amounts of the employer contribution to individual DCAA accounts are:
If Your Salary Is… The Employer Contribution Is…
Under $30,000 $1000
$30,001 - $40,000 $900
$40,001 - $50,000 $800
$50,001 - $60,000 $700
$60,001 - $70,000 $600
Over $70,000 $500
Second, for the first time (independent of temporary COVID-specific relief) the FSA program includes a “carryover” for HCSA Accounts and a “grace period” for DCAA and Adoption Advantage Accounts. These options will alleviate many of the “use it or lose it” concerns that some of our members have had about setting aside pre-tax dollars in the FSA. Providing flexibility to apply unused prior year contributions to pay for subsequent year expenses, described in greater detail below, reduces the risk that members will lose unspent funds at the end of a plan year.
Unused contributions will carry over to the next plan year for enrollees to use. During the plan year runout period (January 1- March 31), plan year 2022 funds may still be used for 2022 expenses. At the end of the runout period, any remaining funds from 2022, up to the IRS limit, will then carryover into the 2023 account balance after the runout period end date (March 31) and can be used to cover 2023 expenses. The current IRS carryover limit is $610.
DCAA and Adoption Grace Period
The grace period allows an additional 2.5 months to incur dependent care or adoption-related expenses. Enrollees may use any funds remaining in their accounts at the end of 2022 to pay for expenses incurred between January 1 and March 15, 2023 . Claims must be submitted by the March 31 deadline.
These are important enhancements to the FSA programs that we, and other state unions, have long advocated for. I am happy to announce we have made progress on this. Please communicate this information widely to your members.
Frederick E. Kowal, PhD
United University Professions