FlexElect Program - CalHR

Benefits Administration Manual - FlexElect Program

 FlexElect Changes for 2015

  • Direct Deposit now available for Reimbursement Account Claims.  See directions for enrolling into Direct Deposit in Handbook and BAM for 2015.
  • Reimbursement  Account claims will be paid twice a week starting in January, 2015.  This is a change from three times per month.
  • Section 706 – FlexElect BAM – we’ve made some clarifications regarding payment of reimbursement account claims into the grace period.  Participants must be actively enrolled on December 31, to be eligible to receive payment for claims during the grace period.  This is true for the Medical and Dependent Care Reimbursement Accounts.
  • Section 707 – FlexElect BAM – we’ve made some clarification regarding deferral of compensation to limit it to the Reimbursement Accounts, since we can now pay FlexElect Cash back in to prior plan years.
  • Section 711 – FlexElect BAM - Added language in the BAM on payroll status changes that mentions supplementation.  Make the SDI similar to the IDL and TD language, “if you supplement your SDI, the deductions will continue.”  This change has been made for the BAM, but not the handbook.  The change will be made on page 16 of the handbook for 2016.
  • In the FlexElect Permitting Event Chart, we have made the following changes:
    • For 01a, we have added “or commencement” into the permitting event “Loss or commencement of spouse’s or domestic partner’s employment.
    • For 05e, we have changed “may” to “must” in the permitting event “If currently enrolled in the Cash Option, must cancel/change cash option elections.”
    • For the explanation with two asterisks (**) we have changed language as follows:  “For employees cancelling the FlexElect Cash and enrolling into a state health or dental plan, the cancellation date for the FlexElect Cash enrollment must be the first of the month following the loss or cancellation of coverage.”   This change is made on pages 2, 3, 4 and 5 of the permitting event chart.
    • For 27a, we have eliminated “enroll” from the action allowed, because that is included under 01 under newly eligible.

Content

 

Appendixes

 

Attachments

 

FlexElect Changes for 2015

  • New Payment Dates!
    Beginning on January 1, 2015, Reimbursement Account claims will be paid twice a week.  The average turnaround time between submission of a claim and the issuance of the check is two weeks.  Payments for the Dependent Care Reimbursement Account claims will still require that the funds be available in the participant’s account and the service period has passed.

 

  • Direct Deposit Now Available!
    Also beginning January 1, 2015, participants will be able to elect to be paid for Reimbursement Account claims by direct deposit into their checking or savings account.  Participants can enroll into direct deposit by going to ASI’s website at www.asiflex.com, then click on “Forms” and then click on “Direct Deposit/Email Notification Form.”  The State Controller’s Office will send out a direct deposit advice notice after the check is deposited into the checking or savings account.  Use of direct deposit payment will save the mailing time needed for paper warrants.

701. General Information

The FlexElect Program is a voluntary tax savings program available to eligible State employees. Departments are responsible for ensuring that all employees are provided information on the FlexElect options, ensuring that interested employees are provided a FlexElect Handbook, and for assisting those who wish to enroll in FlexElect by ensuring all the appropriate forms are completed correctly and timely. The following instructions provide the information required to assist departments in accomplishing that task.
 
This manual provides instructions on how to complete the Reimbursement Account Enrollment Authorization (STD. 701R) and the Cash Option Enrollment Authorization (STD. 701C). For complete instructions on how to complete the Health Benefits Enrollment Form (HBD-12), or how to access my|CalPERS, please refer to the CalPERS Health Benefits Manual; for complete instructions on how to complete the Dental Plan Enrollment Authorization (STD. 692), please refer to the Dental Procedures Manual. You can access these forms on CalHR's web site.
 
This manual provides COBRA program information and instructions on two required COBRA notices: Initial General COBRA Notice, and COBRA Election Notice. You can also access these notices on CalHR's web site.
 
It would be helpful if departments would assign one individual within their respective department to review all FlexElect forms for completeness and accuracy before forwarding them to the State Controller's Office (SCO) for processing.
 
 

Authority

Internal Revenue Code Sections 125 and 129
Section 599.950 through 599.955 of Title 2 of California
Administrative Code
Government Code Section 1156
 
 

702. Plan Options

The options available under FlexElect are:
 

Cash Option

Employees may elect to receive cash in lieu of their own State-sponsored medical insurance and/or dental insurance plan and must certify that they have health and/or dental insurance through a spouse, domestic partner, or another source (see eligibility restrictions Section 704, Eligibility for FlexElect).
 
Cash Option payments are taxable and the amounts are listed below:
  • $128 per month in lieu of medical insurance
  • $12 per month in lieu of dental insurance
  • $140 per month in lieu of health and dental insurance
 
Employees, except permanent intermittent (PI) employees, who are currently enrolled in the Cash Option will be automatically reenrolled into the Cash Option for the next FlexElect Plan Year. Therefore, these employees are not required to complete a Cash Option Enrollment Authorization (STD. 701C) during the annual FlexElect Open Enrollment Period unless they wish to cancel or change their Cash Option enrollment. PI employees are required to reenroll (complete a new STD. 701C) for each year they wish to receive the Cash Option.
 
Under the Internal Revenue Code (IRC) governing the FlexElect Program, employees who complete a form to enroll in FlexElect during the annual FlexElect Open Enrollment Period have until December 31 of the same year, to cancel or change their FlexElect Open Enrollment elections (for the next plan year). This rule also applies to employees who are automatically reenrolled in the Cash Option. Accordingly, if employees wish to cancel or change their automatic Cash Option reenrollment after the open enrollment period, they may do so no later than December 31 (prior to the new plan year).
 
Employees who are not enrolled in the Cash Option and wish to enroll for the next FlexElect Plan Year, must complete a STD. 701C during the current FlexElect Open Enrollment Period.
 
Dental Cash Option Three-Year Commitment
Once enrolled in the Dental Cash Option, the employee is obligated to stay in the Dental Cash for three plan years. After completion of the three plan year commitment, employees may enroll in a State dental plan during the next open enrollment period. The Personnel Office should take steps to monitor the three-year commitment and ensure compliance when employees request cash option enrollment/changes during or after the open enrollment period.
 
  • Exception to the three-year commitment: If employees lose their other dental coverage, they have 60 days (after the loss of coverage) to cancel the dental cash and reenroll into a State-sponsored dental plan. If this action is not requested within the 60-day period, employees must wait until the next open enrollment period to cancel the cash and reenroll into a dental plan.
 
 

Medical Reimbursement Account (MRA)

Employees may authorize a monthly deduction to be placed into a MRA to reimburse themselves for eligible medical expenses. The deduction is taken from the employees' paychecks before federal, state, and social security taxes are assessed. The minimum contribution into the account is $10 per month; the annual maximum is $2,500 per year. (Over a 12-month period, the monthly maximum is $208.33.) Employees who enroll mid-year can still contribute the annual maximum. In this situation, the monthly maximum deduction would not be limited to $208.33. Employees may not request reimbursement from this account to pay for any out-of-pocket premium costs for their medical and/or dental insurance. Employees may reference the FlexElect Program handbook which provides a partial list of expenses that are payable under the State's FlexElect MRA.
 
 

Dependent Care Reimbursement Account (DCRA)

Employees may authorize a monthly deduction to be placed into a DCRA to reimburse themselves for expenses for eligible child care, elder care, and care for a disabled dependent. The deduction is taken from the employees' paychecks before federal, state, and social security taxes are assessed. The minimum contribution into the account is $20 per month; the annual maximum is $5,000 per year (per household) or $2,500 for married, filing a separate income tax return. (Over a 12-month period, the monthly maximum is $416.66.) Employees who enroll mid-year can still contribute the annual maximum. In this situation, the monthly maximum deduction would not be limited to $416.66. In any case, the annual contribution cannot exceed the lesser of (a) the applicable maximum amount, or (b) the employee's annual earned income, or (c) the annual earned income of the employee's spouse. If employees need help determining whether their expenses qualify for reimbursement, check IRS Publication 503.
 
Annual Reenrollment Requirement: Employees enrolled in the MRA and/or the DCRA MUST REENROLL in FlexElect during the annual open enrollment period each year they wish to participate by completing a Reimbursement Account Enrollment Authorization (STD. 701R). There is no automatic reenrollment into either of the reimbursement accounts. Under the Internal Revenue Code governing the FlexElect Program, employees who enroll/reenroll into a MRA and/or DCRA during the annual FlexElect Open Enrollment Period, have until December 31 (of the same year), to cancel or change their FlexElect elections (for the next plan year).
 
 

Administrative Fee

Employees enrolled in the Cash Option and/or a MRA/DCRA pay a monthly $1.00 administrative fee. This fee is determined by CalHR and will be deducted from the participant's after tax salary each month.
 
 

703. Premium Only Plan (POP)

Under the State's Premium Only Plan (POP) any out-of-pocket premium cost to employees for their State-sponsored health/dental insurance is taken out of their paycheck before federal, state, and social security taxes are deducted. This tax savings helps to offset some of their insurance premium cost. As the insurance premiums increase or decrease, the employees' share will automatically change and continue to be deducted from their paycheck as long as they are enrolled in POP.
 
 

Enrollment into POP

All employees who pay an out-of-pocket share for their State-sponsored health/dental premiums are automatically enrolled into POP. POP participants are not subject to the FlexElect administrative fee unless they are also enrolled in the FlexElect Cash Option and/or either of the FlexElect Reimbursement Accounts.
 
 

Disenrollment Process

For the vast majority of employees, the tax savings provided in the POP clearly outweigh any negative impact. In some cases, however, certain employees or those employees close to retirement who are concerned with the potential loss in social security benefits may choose not to be enrolled in POP.  Some employees are concerned that participating in POP will result in some loss of social security earned quarters. Employees should be advised that there is no impact to the social security quarters they earn by participating in POP. The potential loss of social security benefits increases each year that employees continue to participate in POP because there is no social security deducted from their share of out-of-pocket health/dental premiums. However, it should be noted, that it would take many years of continued participation in POP before the social security benefits lost exceeded the tax savings realized each month.  Employees concerned about either the low income impact or their social security benefits should be advised to seek the advice of a qualified tax consultant.  Employees have 60 days from the date they first become eligible for POP to disenroll. Thereafter, all POP enrollees may disenroll each year during the annual open enrollment period by completing Attachment G - Premium Only Plan (POP) Disenrollment Form (CalHR 006).
 
 

Disenrollment Restriction

Employees who may not disenroll from POP are:
  • employees enrolled in the FlexElect Program, as the pre-tax benefit is part of their FlexElect election and participation and;
  • employees enrolled in the Consolidated Benefits (CoBen) Program.
 
 

704. Eligibility for FlexElect

Employees eligible to enroll into FlexElect must be paid by SCO through the State Uniform Payroll System or by the District Agriculture Association and meet the eligibility criteria listed below:
  • State employees designated rank and file, managerial, supervisory, confidential, and all other employees excluded from collective bargaining, Constitutional Officers, employees of the Judicial Council, and Supreme, Appellate, and Superior Court Judges and;
  • Must have a permanent appointment with a time base of half-time or more. If a limited-term (LT) or temporary (TAU) appointment, must have a mandatory right of return to a permanent position (not permanent-intermittent) with a time base of half-time or more unless they are in the CoBen Program. CoBen employees are eligible even if they have an LT or TAU appointment.
  • Employee may have more than one appointment, as long as the combined time base is half-time or more.
  • Employees who are maintaining coverage as a dependent on their parent's State-sponsored health and/or dental benefits ARE NOW eligible for the Cash Option. This change begain January 1, 2011.
 

 

Eligibility Restrictions:

  • Permanent-Intermittent (PI) employees may only participate in the Cash Option and the Premium Only Plan (POP). Specific PI eligibility and enrollment procedures are in Section 710, Permanent-Intermittent (PI) Enrollment, of this manual. Prior to enrolling a PI employee in FlexElect, please read this information carefully.
  • Unit 6 employees may use any of the options within FlexElect except the Cash Option in lieu of their dental insurance. This requirement is per the union's Benefit Trust restriction.
  • Employees who are maintaining their own coverage on any state-sponsored health and/or dental benefits (including the CSU system) ARE NOT eligible for the Cash Option.
  • Units 2, 7, 8, 16, 17, 18, and 19, and excluded employees are in the Consolidated Benefits (CoBen) Program. These employees are eligible for the CoBen Cash Option and therefore, are not eligible for the FlexElect Cash Option. Eligible employees enrolled in CoBen may enroll in the FlexElect Program Dependent Care Reimbursement Account (DCRA) and/or Medical Reimbursement Account (MRA).
  • Employees who are eligible to receive the survivor benefits after the death of a spouse or domestic partner can newly enroll or continue to receive the FlexElect Cash.
 
 

Loss of Eligibility

Employees lose eligibility for FlexElect when they:
  • change to a time base that is less than half-time;
  • change to an appointment that is not permanent (such as LT or TAU) unless the employee has a mandatory right of return to a permanent position with a time base that is half-time or more;
  • change to a Permanent Intermittent (PI) position (may possibly re-enroll as a newly eligible PI). Please see Section 710, Permanent-Intermittent (PI) Enrollment, for PI enrollment information and eligibility requirements.
 
 

Personnel Office Responsibility When Employee Loses Eligibility

When an employee loses eligibility for FlexElect due to one of the above events, his/her enrollment must be cancelled. The effective date of cancellation must be the first of the second month following the date of the event (the date of time-base/appointment change). For example, an employee enrolled in the Cash Option transfers to a PI position effective July 14th. The Cash Option enrollment must be cancelled effective September 1.
 
 

Cancellation of FlexElect enrollment due to a loss of eligibility (as shown above) may be processed administratively.

The Personnel Office is responsible for notifying the employee when an administrative FlexElect cancellation is done. The Personnel Office should indicate the following information on the form(s) and submit to SCO for processing:
  • Effective Date: 1st of the second month following the date of event.
  • Permitting Event Date: Date of time base and/or appointment change.
  • Permitting Event Code: 41
  • Remarks: Clarify how employee lost eligibility for FlexElect.
 
 

705. Election Changes/Change in Status Events

FlexElect enrollment choices are in effect for the entire plan year, January 1 through December 31. Employees may not change or cancel their FlexElect elections during the plan year, except for allowable changes in status events as defined by IRS regulations. IRS regulations also require that any changes/cancellations to the FlexElect benefit elections must be necessary and appropriate as a result of the change in status event. Once an election is made (after a newly eligible permitting event), they must experience another permitting event to change their election, even if they are still within the 60-day time period.
 
In general, allowable changes in status events are:
  • Marriage, divorce, legal separation, or annulment;
  • Birth or adoption of a child;
  • Death of a spouse, domestic partner, or dependent;
  • Loss or commencement of spouse's or domestic partner's employment or loss of spouse's or domestic partner's medical or dental coverage due to an employment status change;
  • Change in employee's, spouse's, or domestic partner's work schedule (e.g., FMLA, NDI, SDI, IDL, time-base change that results in a loss or gain of eligibility and coverage, commencement or return from an unpaid leave of absence);
  • Loss or commencement of dependent's eligibility for medical coverage under the employee's health insurance plan;
  • Change in place of residence or worksite of the employee, spouse, domestic partner, or dependent;
  • Change in dependent care provider and/or provider dependent care cost.
 
The FlexElect Appendix A - Permitting Event Codes/Date Chart provides a list of permitting events, permitting event codes, and effective date information. The Permitting Event Chart reflects newly eligible enrollment information and those actions allowed as a result of a valid change in status event. Please note that employees must submit their request (to enroll, cancel, or change) to their Personnel Office within 60 days from the date the change in status event occurs. Requests submitted to the Personnel Office after the 60 day time frame will not be processed.
 
THESE PERMITTING EVENTS ONLY APPLY TO THE FLEXELECT PROGRAM. PLEASE REFER TO THE HEALTH BENEFITS AND/OR DENTAL PROCEDURE MANUALS FOR ALLOWABLE PERMITTING EVENTS FOR THOSE BENEFITS.
 
 

Court Ordered Health/Dental Coverage which Impacts Flex/CoBen Cash

Occasionally an employee receiving Flex/CoBen Cash will be issued a court order regarding the provision of benefits for their dependent(s). The court order will specify that the dependent be enrolled into benefits. The employee receiving Flex/CoBen Cash must be covered elsewhere for health and/or dental benefits and the dependent(s) should be added to those benefits to comply with the court order. A court order is not always a permitting event to allow an employee to cancel the Flex/CoBen cash.
 
 

706. Reimbursement Account Information and Procedures

The company Application Software, Inc. (ASI) is the State's contracted Third Party Administrator (TPA) and recordkeeper for the FlexElect Program Medical Reimbursement Account (MRA) and Dependent Care Reimbursement Account (DCRA). Employees must complete Attachment H - FlexElect Reimbursement Claim Form (CalHR 351) in order to receive reimbursement from their account.
 
The company ASI will process all reimbursement account claims. Once completed, the original white copy of the form must be submitted to ASI along with appropriate documentation (e.g., receipt, doctor's statement, itemized bill) to substantiate their medical or dependent care expenses in order to be reimbursed. The carbon pink copy should be retained by the employee.
 
Employees enrolled in a DCRA may have their daycare provider sign the statement on the front of the CalHR 351, certifying that the services were provided, in lieu of attaching a receipt. The daycare provider's tax I.D. or social security number must also be included on the reimbursement claim form.
 
In December, all participants who elected to enroll or reenroll into a MRA and/or a DCRA for the next plan year will receive a supply of Reimbursement Claim Forms. After completion of the claim form, it should be mailed or faxed along with supportive documentation to:
 
ASI
P.O. Box 6044
Columbia, MO 65205-6044
FAX NUMBER: (877) 879-9038
 
Questions regarding reimbursement claims should be directed to ASI at the following toll free number 1-800-659-3035 or InfoLine (24 hours - 7 days a week) 1-800-366-4827.
 
 

Period of Coverage for Reimbursement

IRS Codes stipulate that eligible expenses, for purposes of the reimbursement accounts, must be for services/supplies received/purchased between the effective date of participation through December 31 of the same plan year. The effective date of participation is the effective date of enrollment (i.e., January 1 for those enrolling during the open enrollment period). If a participant is enrolled in the Medical Reimbursement Account and cancels his/her coverage before December 31, he/she may only submit claims for expenses incurred during the months for which they have contributed.
 
Employees may get confused about when they can start claiming expenses because even though January 1 is the start of the new plan year, reimbursement account deductions begin with the December pay period paycheck and continue through the following November pay period paycheck. This is because the December wages are dated January 1 (of the following year) and are considered earnings for the next tax year.
 
 

Submission of Reimbursement Claim Forms

Employees who are enrolled in both a MRA and DCRA may request reimbursement from both accounts on one form by completing the appropriate sections. However, they will receive two reimbursement checks, one for each type of account.
 
If employees are submitting reimbursement claims for two separate plan years, they must use two separate claim forms to ensure that reimbursement is made from the correct plan year account.
 
Although a small supply of pre-addressed labels for mailing reimbursement requests are sent to all new participants, employees can obtain additional mailing labels by sending their request to:
 
California Department of Human Resources
Benefits Division - FlexElect Program
1515 S Street, North Building, Suite 400
Sacramento, CA 95811-7258
 
 

Processing Time for Reimbursement Claims

Beginning on January 1, 2015, Reimbursement Account claims will be paid twice a week.  The average turnround time between submission of a claim and the issuance of the check is two weeks.  Payments for the Dependent Care Reimbursement Account claims will still require that the funds be avilable in the participants' account and the service period has passed before issuance of a check.
 
If a claim is submitted for less than $10, the payment will be held until the total reimbursement equals $10 or more.  If there is less than $10 in the account, the Third Party Administrator will run a report twice a year in June and December, to identify those claims and pay them. 
 

Final Claim Submission Deadline

The last possible date employees may submit claims for reimbursement from their MRA and/or DCRA is June 30 of the year following their participation in FlexElect. This means that employees have six full months after the plan year has ended to submit their claims for expenses incurred during the plan year for which they were enrolled. If a claim is not postmarked by June 30 (or the next working day if June 30 falls on a weekend or holiday) the claim will not be processed and will be returned to the employee.
 
Reimbursement checks are mailed directly to the employees' home using address information on file with SCO. Direct Deposit will be available starting January 1, 2015.  Participants can enroll by going to ASI's website at www.asiflex.com, then click on "Forms" and then click on "Direct Deposit/Email Notification Form."  Employees should be reminded to verify the address information on file with SCO through their Personnel Office and to complete an "Employee Action Request" (EAR) Form (STD. 686) if the address is not correct. The TPA (recordkeeper) is sent updated address information by SCO twice monthly on the 1st and the 15th. Depending on when the EAR is processed the recordkeeper will update its address files accordingly.  Employees should be reminded to verify the address information on file with SCO through their Personnel Office and to complete an "Employee Action Request" (EAR) Form (STD. 686) if the address is not correct. The TPA (recordkeeper) is sent updated address information by SCO twice monthly on the 1st and the 15th. Depending on when the EAR is processed the recordkeeper will update its address files accordingly.
 
 

Extension of Benefits for 2 1/2 Months into the Next Plan Year

If the participants' rembursement account is active on December 31, the IRS rules on deferred compensation allows payment for medical and dependent care expenses incurred up to two and one-half months after the end of the plan year. In other words, employees may use money deducted during one plan year to pay for medical and dependent care expenses incurred up to March 15th of the following year. Employees still have until June 30th of the following year to claim expenses incurred up to March 15th and any unused amount at that time will be forfeited pursuant to IRS Rules.
 
Claims will be paid in the order in which they are received. If the employee has an account balance in their prior plan year's account, and a claim is received with a date of service during the grace period, the expense will automatically be paid from their prior plan year's account. If a claim is received at a later date, with a date of service in the prior plan year, and all the funds have been paid from their prior plan year account, the claim will not be paid.
 
For this reason, it is important that the employee file claims in the order that their expenses are incurred. This will help to assure that they maximize the use of their account for both plan years.
 
If the participant cancels their Dependent Care or Medical Reimbursement Account during the plan year, or if they leave state serivice or retire and do not continue their MRA deduction via COBRA, they are not eligible to receive payment for services during the Grace Period (through March 15 of the following year).
 
 Medical Reimbursement Account
IRS regulations require the State to make the full annual contribution amount available from the Medical Reimbursement Account (MRA). As a result, employees who incur eligible medical expenses can be reimbursed at any time during the plan year based on their annual contribution amount even though all of their monthly payroll deductions have not been taken.
 
For example, an employee enrolls in FlexElect and authorizes a monthly deduction of $100 (annual contribution of $1,200) into a MRA. This employee could incur an eligible expense in the amount of $2,000 in March, and submit a claim form along with a copy of the receipt for the $2,000 medical expense. The State would be required to pay the employee $1,200 (the annual maximum contribution) in March regardless of the fact that the employee had only contributed $300 into his/her account (deductions from the December, January, and February pay period paychecks at $100 per month). The remaining deductions (March through November pay periods) would basically pay back his/her MRA. 
 

Dependent Care Reimbursement Account

Unlike the Medical Reimbursement Account, the funds must be deposited in the participant's account and the service period has to have passed before the Dependent Care Reimbursement Account claims can be paid.

  
 

707. Enrollment Appeal Process

Under the policies and procedures of the FlexElect Program there are established timeframes for the completion and processing of enrollment forms. The Personnel Office is responsible for ensuring that FlexElect Program information is provided to all employees and timely submission of enrollment forms. In situations when there has been a discrepancy in form processing, CalHR will consider an enrollment/change appeal, upon request.
 
The appeal should be sent to CalHR at the following address:
 
California Department of Human Resources
Benefits Division - FlexElect Program
1515 "S" Street, North Building, Suite 400
Sacramento, CA 95811-7258
 
 
Following are some situations that typically occur with enrollments and should be used as a guide prior to submitting any appeal for enrollment to CalHR for consideration:
 
1. Employee claims to have not been informed of the FlexElect Open Enrollment Period and wishes to enroll after October 12 but prior to January 1.
Employee will not be able to enroll unless the department certifies in writing that the employee was not notified of the FlexElect Open Enrollment Period and provides an explanation as to the reason. The department must send the FlexElect enrollment form and all other necessary forms to CalHR , Benefits Division for consideration. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
2. Employee claims to have not been informed of the FlexElect Open Enrollment Period and wishes to enroll after January 1.
Employee will not be able to enroll unless the department certifies in writing the employee was not notified of the FlexElect Open Enrollment Period and provides an explanation as to why. The department must send the FlexElect enrollment form and all other necessary forms to CalHR , Benefits Division. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
3. Employee submitted an incorrectly completed form. Errors were not detected by the Personnel Office which resulted in the form being rejected by SCO and returned.
Departments may submit a written explanation of the facts in cases where they believe they caused processing delays by making an error or not catching errors the employee made in completing the form. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
4. Employee submitted a correctly completed FlexElect enrollment form, however, the departmental Personnel Office did not submit the form to SCO in a timely manner and the deduction did not take effect.
Departments must submit an explanation in writing as to why the documents did not get processed timely to the CalHR , Benefits Division with all necessary enrollment forms. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
5. Employee submitted a correctly completed FlexElect enrollment form and the departmental Personnel Office forwarded the form to SCO in a timely manner. SCO did not receive the form and the request was not processed.
Departments must submit an explanation in writing certifying the form was forwarded to SCO in a timely manner but was not received/processed. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
6. Employee loses coverage and does not file 701C within 60 days from permitting event date.
Departments must submit an explanation in writing along with the HBD-12 or Health Benefit and Enrollment History Page after confirmation from my|CalPERS and/or STD. 692. The effective date to cancel the cash is the same date as the enrollment into health and/or dental benefits. CalHR will consider the facts presented and may allow enrollment on a prospective or retroactive basis within IRS regulations.
 
7. For Permitting Event Codes 37, 38 and 39, which all allow a cancellation or change in the Dependent Care Reimbursement Account (DCRA), the specific effective date rules may cause the employee to lose the funds if their Dependent Care costs change before the effective date.
Departments should submit an explanation in writing along with the STD. 701R to make the effective date correspond with the Dependent Care cost change.
 
 
In accordance with IRS regulations which prohibit the deferral of compensation; under no circumstances will retroactivity into a prior plan year be allowed for the Reimbursement Accounts. In those instances where CalHR approves retroactivity, it will only be approved for the CURRENT plan year.
 
In cases where the department feels they are not at fault and the employee is not being allowed to enroll or make changes, or is not being enrolled with the earliest possible effective date, the employee may seek financial remedy by filing a claim through the Victim Compensation and Government Claims Board against his/her department for the amount of money and/or tax savings they believe they did not receive.
 
 

708. Open Enrollment Period

The FlexElect Open Enrollment Period is usually in September and October. The specific open enrollment period dates will be communicated to departments prior to the beginning of the open enrollment period. Employees must sign and submit their FlexElect documents, including HBD-12's and STD. 692's to their Personnel Office no later than the last day of the open enrollment period. The effective date of any action during open enrollment is January 1, of the following year.
 
A memo that includes specific open enrollment information regarding cut-off dates for submission of FlexElect documents to SCO will be sent by CalHR to departments prior to the beginning of the FlexElect Open Enrollment Period. In cases where FlexElect Open Enrollment forms are not submitted by the prescribed deadlines, departmental Personnel Offices may wish to submit an enrollment appeal to CalHR. Please see Section 707, Enrollment Appeal Process, for information regarding the "Enrollment Appeal Process".
 
 

Medical and/or Dependent Care Reimbursement Accounts

To enroll in the Medical and/or Dependent Care Reimbursement Accounts, employees must complete a Reimbursement Account Enrollment Authorization (STD. 701R). If employees enroll in the Medical and/or Dependent Care Reimbursement Accounts, they must reenroll into FlexElect every year they wish to participate by completing a Reimbursement Account Enrollment Authorization (STD. 701R) during the annual FlexElect Open Enrollment Period. For employees who are enrolling/reenrolling into the Medical Reimbursement Account (MRA), departments are required to provide each MRA participant with an Initial COBRA Notification at the commencement of their coverage. Please see Section 712 of this manual for additional information regarding COBRA.
 
 

Cash Option Enrollments/Reenrollments

Employees, except permanent intermittent (PI) employees, currently enrolled in the Cash Option will be automatically reenrolled into the Cash Option for the next FlexElect Plan Year. It is not necessary for these employees to complete a Cash Option Enrollment Authorization (STD. 701C) during the open enrollment period, unless they wish to cancel or change their Cash Option enrollment.
 
 

Exception to Automatic Reenrollment

PI employees must reenroll each FlexElect Open Enrollment Period in order to receive the Cash Option. The automatic enrollment continuation does not apply to PIs because part of their eligibility requires completion of a specific number of work hours each plan year and a separate payment process. For more information please see PI Eligibility for Cash Option in Section 710, Permanent-Intermittent (PI) Enrollment.
 
 

New enrollments

Employees who are not currently enrolled in the Cash Option, and wish to enroll for the following FlexElect Plan Year, must complete a Cash Option Enrollment Authorization (STD. 701C) during the current FlexElect Open Enrollment Period. After initially enrolling in the Cash Option, enrollment will automatically continue in future plan years. In order to cancel or change a Cash Option enrollment due to a change in status event or during open enrollment, employees are required to complete a STD. 701C.
 
 

Other forms and coordination between departments

If other enrollment forms (i.e. HBD-12, or Health Benefit and Enrollment History page after confirmation from my|CalPERS, STD. 692, etc.) are also being submitted for the spouse/domestic partner of an employee, they must be coordinated and submitted as a package, along with the employee's FlexElect form. The department with the employee who is enrolling in FlexElect must assume the responsibility of coordinating all of the forms. If both employees enroll in FlexElect, one of the departments must assume responsibility for coordinating all of the forms. All forms should be reviewed by the Personnel Office to ensure they are completed accurately.
 
The FlexElect Open Enrollment Period allows FlexElect enrollees and their State-employed spouses/domestic partners to coordinate their health benefit enrollment. During the open enrollment period, both FlexElect enrollees, spouses, and domestic partners who maintain the traditional health coverage may change health plans.
 
All FlexElect open enrollment packages must be sent to SCO at the following address:
 
State Controller's Office
Division of Personnel/Payroll Services
Flexible Benefits Unit
P.O. Box 942850
Sacramento, CA 94250-5878
 
 

Corrections/Cancellations/Changes to Open Enrollment FlexElect Forms

After enrolling into FlexElect during the open period, employees are permitted to cancel or change their open enrollment election if done so prior to January 1 of the plan year for which enrollment is requested. Please see Section 721, Correcting FlexElect Open Enrollment Documents for more information.
 
 

709. Newly Eligible Enrollments

In order to enroll into FlexElect outside of the annual FlexElect Open Enrollment Period, employees must enroll as "newly eligible". Newly eligible enrollments have a Standard Effective Date, as described on the FlexElect Permitting Event Chart (Appendix A). Newly eligible employees must elect enrollment within 60 days after becoming eligible and they must meet the eligibility criteria outlined in Section 704 of this manual. Newly eligible employees are:
  1. New State employees hired outside of the open enrollment period;
  2. Employees whose time base/employee designation changes from one that was not eligible to one that is eligible or a PI who changes to a permanent position with a time-base of half-time or more;
  3. Employees who were on an approved leave of absence during the entire open enrollment period;
  4. Employees, not currently enrolled in FlexElect, who experience a valid change in status event as defined in Appendix A. In addition, if the employee's change in status event results in a concurrent approved leave of absence (e.g. birth of child/maternity leave), the employee may enroll by the deadlines specified in the permitting event chart after the employee returns to work.
 
 

Health and/or Dental Plan Form Coordination

Employees may make certain changes to their medical/dental insurance for purposes of enrolling in FlexElect. The type of change is based on the permitting event. Refer to the CalPERS Health Benefits and the Dental Procedures Manuals to determine if the event is one that will allow employees to make a change and for the appropriate reason codes, etc.
 
 

Maximum Contribution for Newly Eligible Enrollments (Reimbursement Accounts)

Employees who enroll mid-year into either of the reimbursement accounts can still contribute the annual maximum. Therefore, the monthly maximum deduction would not be limited to $208.33 for the Medical Reimbursement Account or $416.66 for the Dependent Care Reimbursement Account. For example, an employee enrolls into FlexElect as a new State employee with an effective date of May 1. The employee wants to contribute the maximum of $5,000 into a Dependent Care Reimbursement Account. The employee's deduction would begin with his/her April pay period paycheck (dated May 1) and end with his/her November pay period paycheck (dated December 1). This employee's monthly contribution into the account would be $625.00 (8 months x $625 = $5,000). This employee could request reimbursement for dependent care services received between May 1 and December 31 of the plan year.
 
To enroll as newly eligible, employees must complete all of the appropriate forms that must be submitted as a package. In completing the STD. 701R and/or STD. 701C, the following information should be entered on the form(s) by the Personnel Office:
  • Effective Date: Current or prospective basis (i.e. First of the following month when the correctly completed enrollment form is received at SCO by the 10th AND does not have to be returned to the agency for correction). The last possible effective date for a newly eligible enrollment is December 1.
  • Permitting Event Date: Date employee became newly eligible.
  • Permitting Event Code: 01
  • Remarks: Indicate how the employee became newly eligible (i.e., new hire, new marriage, birth of child, etc.)
 
The term newly eligible only applies to employees who are not currently enrolled in any of the FlexElect options and meet the above criteria. This means that current FlexElect enrollees who request enrollment into another FlexElect option are processed as changes, not newly eligible enrollments.
 
 

Required Notice for Medical Reimbursement Account (MRA) Enrollees

Departments are required to provide each MRA participant (at the time of enrollment) with an Initial COBRA Notification, which outlines participant rights to continue participation under COBRA should they lose coverage based on a qualifying event. Please see Section 712 for additional COBRA information.
 
 

710. Permanent-Intermittent (PI) Enrollment

Permanent-Intermittent (PI) employees may enroll, but have limited eligibility. The only FlexElect option available to a PI is the Cash Option. PI employees are not eligible to enroll a Medical and/or Dependent Care Reimbursement Account.
 
All PIs who expect to qualify for FlexElect during the next plan year must make an election to enroll in the Cash Option during the FlexElect Open Enrollment Period by completing a Cash Option Enrollment Authorization (STD. 701C). Participation in the FlexElect Program will be contingent on meeting the required eligibility criteria. In the event PIs who have enrolled during the open enrollment period do not qualify, their STD. 701C form, which was retained by the Personnel Office during open enrollment, should not be processed. The employees will have another opportunity to enroll in FlexElect during the next open enrollment period.
 
PI employees hired after the open enrollment period, but prior to January 1 of the next plan year, may enroll in FlexElect, however, they must meet the eligibility criteria (as outlined in the Section 710's Cash Option - PI Employees) before their Cash Option enrollment can become effective.
 
PI employees who enroll in FlexElect may not cancel or change their FlexElect elections, including their choice of State-sponsored health and/or dental plans, during the plan year unless they experience a valid change in status event as defined by the Internal Revenue Service (IRS) regulations. Please see Section 705, Election Changes/Change in Status Events, for information regarding changes in status events.
 
In addition to changes or cancellations that PI employees may initiate as a result of a valid change in status, their participation in the FlexElect Program is contingent on meeting the specific eligibility criteria for the PI Eligibility for Cash Option in Section 710 of this manual.
 
 

PI's and the Premium Only Plan (POP)

With the Premium Only Plan (POP), the employees' share of their health and/or dental insurance premiums is deducted from their paycheck before federal, state, and social security taxes are withheld. Please see Section 703 for more information regarding POP.
 
 

PI Eligibility for POP

In order to participate in POP, PI employees must qualify for health/dental benefits by earning at least 480 paid hours during each control period (January through June; and, July through December) or to continue enrollment, at least 960 paid hours during two consecutive control periods (prior and current). If after enrolling in a health and/or dental plan, PIs pay an out-of-pocket premium deduction, it will automatically be deducted on a pretax basis. Since POP enrollment is automatic there are no enrollment forms required.
 
 

Cash Option - PI Employees

PI employees do not receive the Cash Option on a monthly basis. Instead, they receive the Cash as a single, lump sum six-month payment in lieu of enrollment in a State-sponsored health and/or dental plan for the January through June control period of each plan year for which they are enrolled. They are not eligible to receive the Cash for the July through December control period because such payment would not be made until the next plan year. Cash Option payments made in a subsequent plan year is considered a deferral of compensation and is strictly prohibited by the IRS. Cash Option payments are taxable and are available to PI employees as follows:
  • $768 in lieu of health benefits
  • $72 in lieu of dental benefits
  • $840 in lieu of health and dental benefits
 
All PI Cash Option payments are subject to the annual $12.00 FlexElect administrative fee.
 
 

PI Eligibility for Cash Option

In order to participate and receive the FlexElect Cash payment, a PI employee must meet ALL of the criteria specified below:
  • must have completed a STD. 701C during the open enrollment period, or as newly eligible after open enrollment, but prior to January 1 AND
  • must have been eligible to be enrolled in health and/or dental insurance for the entire January through June control period (eligibility gained as of January 1 but not effective until February 1 meets this criteria) AND
  • must be paid for at least 480 hours worked during the January through June control period (*see notes below regarding multiple PI positions and NDI time) AND
  • have a PI appointment from January 1 through June 30 of the Plan Year for which they have enrolled (with no break in service).
 
In situations where an employee maintains multiple PI appointments during the January through June control period, the department may count the hours worked from the multiple positions regardless of whether the multiple positions are within one department or multiple departments.
 
PI's may not use NDI or SDI time to count towards their 480 qualifying hours in a control period to qualify for the lump-sum cash payment.
 
 

Form Submission for Cash Option - PI Employees

The following information covers the types of actions which can occur during the open enrollment period.
 
Employees who were eligible for health and/or dental but were not currently enrolled and were electing the Cash Option in lieu of medical and/or dental.
These employees must have completed a STD. 701C during the open enrollment period. On or after July 1, Personnel Offices will verify the qualifying hours during the January-June control period. For those employees who worked the required 480 hours AND meet the other eligibility criteria, the STD. 701C should be forwarded along with a STD. 674 to SCO to request the Cash Option payment.
 
Employees who cancelled their health and/or dental benefits effective January 1 in order to obtain the Cash Option in lieu of medical and/or dental.
 
During the open enrollment period, these employees would have completed a STD. 701C AND in addition an HBD-12 and/or a STD. 692 to cancel their current benefits effective January 1. The HBD-12 or Health Benefit and Enrollment History page after confirmation from my|CalPERS and/or STD. 692 should have been forwarded immediately to SCO as instructed below:
  • Permitting Event Code: 36a (For STD. 692)
  • Reason Code: 503 (For HBD-12)
  • Remarks Section of both HBD-12 and STD. 692: "PI canceling benefits to enroll in Cash Option"
    • Personnel Office forwards HBD-12 or Health Benefit and Enrollment History page after confirmation from my|CalPERS and STD. 692 to SCO.
    • Personnel Office retains the STD. 701C until completion of the January through June control period.
    • If employee meets all the Cash Option eligibility criteria, the STD. 701C is sent to SCO with a STD. 674 requesting the Cash Option payment see Example 7 in Section 723.
 
 

Document Submission Deadline for Cash Option Payment - PI Employees

The STD. 701C and STD. 674 for PI employees who qualify for the Cash Option payment must be received at SCO by September 1 (or the next business day if September 1 falls on a weekend or holiday). All requests for payment received at SCO after September 1, will be returned unprocessed to the Personnel Office.
 
 

Impact of Time Base Changes on FlexElect Eligibility for PI Employees

PI employees who accept a limited-term appointment will not be eligible for the Cash Option as they will not meet ALL PI eligibility criteria described on PI Eligibility for Cash Option in Section 710 of this manual.
 
PI employees who are appointed to a permanent position with a time-base of half-time or more, lose eligibility for the PI cash payment, and MUST complete a new STD. 701C within 60 days after their appointment to enroll as a newly eligible permanent employee. Additionally, they become newly eligible to enroll in a Medical and/or Dependent Care Reimbursement Account. Permitting Event Code 01 should be used on the STD. 701C and/or STD 701R.
 
FlexElect participants with a time base of half-time or more who change to PI status MUST CANCEL their FlexElect participation (Cash Option and/or Reimbursement Account) effective the first of the second month following the date of becoming a PI. Those employees who change to PI status after the open enrollment period but prior to January 1 of the following plan year must wait until the next open enrollment period to request enrollment as a PI.
 
 

Cancellation of FlexElect as a Result of a Time Base Change to Permanent-Intermittent

Employees canceling their FlexElect as a result of a time base change to PI must complete a new STD. 701C as follows:
  • Effective Date First of the second month following the date of becoming a PI.
  • Permitting Event 41
  • Permitting Event Date: Date of time base change
  • Remarks Section: Enter - "FlexElect Cancellation/Time Base Change to Intermittent."
 
PI employees who were enrolled in the Medical Reimbursement Account based on their former eligible time base may continue to make payments into their account through the Consolidated Omnibus Budget Reconciliation Act (COBRA). By continuing under COBRA the employee will be able to claim expenses incurred after the date of cancellation. Employees who choose not to continue under COBRA will only be able to claim those expenses incurred prior to the date of cancellation. See COBRA information and instructions in Section 712.
 
 

PI Eligibility Audit

Since PI eligibility in the FlexElect Program is based on eligibility for health/dental benefits and completion of the required number of paid hours worked within a control period, the State Controller's Office will verify the paid hours worked prior to issuing the cash payment.
 
 

711. Change in Pay Status While Enrolled in FlexElect

Non-Industrial Disability (NDI)

If employees go on NDI while enrolled in FlexElect, all of their FlexElect elections will remain in effect and will be reflected on their NDI paycheck (i.e. Cash Options, and/or reimbursement account deductions, etc.).
 
 

Industrial Disability Leave (IDL) and Temporary Disability (TD)

If employees go on IDL or TD while enrolled in FlexElect, and they elected to receive the Cash Option for health and/or dental, their cash elections will remain in effect. Employees will receive a separate check for the Cash Option, which will be issued approximately one week after their IDL or TD paycheck is issued. If they elected to enroll in one or both of the reimbursement accounts, their deductions into the account(s) will stop for as long as they are on IDL or TD. If the employees return to regular pay status within the FlexElect Plan Year, their reimbursement account deductions will resume. However, if employees go on IDL or TD with Supplementation (IDLS or TDS), their reimbursement account deductions will continue provided the amount of their supplementation income is large enough to cover the full amount of their monthly reimbursement account deduction.
 
 

State Disability Insurance (SDI)

For employees in Bargaining Units 1, 3, 4, 11, 14, 15, 20, and 21: If employees go on SDI while enrolled in a reimbursement account and/or cash option, their enrollment will stop while they are on leave unless they supplement their SDI payment with sick leave, annual leave or vacation.  If they supplement, their reimbursement account deductions may continue.  If they return to pay status in the same FlexElect plan year, their enrollment will resume. If they are enrolled in the medical reimbursement account and wish to continue to submit claims for services provided during their unpaid leave of absence, they may elect to continue to make contributions through COBRA.
 
 

Unpaid Leave of Absence

If employees leave "pay status" while enrolled in FlexElect, their FlexElect elections will stop for as long as they continue to remain on unpaid leave. For those employees who are enrolled in the automatic Cash Option, their Cash Option election will resume when they return to pay status.
 
Employees enrolled in the reimbursement accounts, must return to pay status within the FlexElect Plan Year, in order for their FlexElect elections to resume. In addition, Medical Reimbursement Account (MRA) participants may have coverage continuation rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Please see the "Consolidated Omnibus Budget Reconciliation Act" (below) for information regarding MRA enrollment continuation.
 
 

Military Leave

Pursuant to Government Code Section 19775.18, state employees called to active military duty for the War on Terrorism are eligible to retain their State benefits for up to 365 calendar days above the 180 calendar days provided by GC Section 19775.17. If an employee is currently receiving Flex Cash in lieu of health and/or dental benefits, he/she may continue to receive the cash for the duration of their military leave, not to exceed the time limits mentioned above. Military Leave is not a permitting event to newly enroll into the Flex Cash Program.
 
Employees enrolled in the medical reimbursement account may elect to continue their coverage via COBRA, or their deductions will stop for the duration of their leave.
 
 

Heroes Earnings Assistance and Relief (HEART) Act

The HEART Act of 2008 amended Internal Revenue Code (IRC) 125, which allows military personnel called to duty the ability to receive taxable distribution of unused medical care spending account (or Medical Reimbursement Account) funds . This distribution is not available to employee enrolled in a dependent care reimbursement account. The Act defines the distribution as a "Qualified Reservist Distribution" (QRD). In order to be eligible for a QRD, the employee who is enrolled in a MRA must meet the following requirements:
  1. Be a member of a "reserve component" (as defined in Section 101 of Title 37 of the United States Code), which means a member of the Army National Guard; the Reserve for the U.S. Army, Navy, Marine Corps, Air Force, or Coast Guard; Air National Guard of the United States; or the Reserve Corps of the Public Health Services;
  2. Be called or ordered to active military duty for (i) 180 days or more or (ii) for an indefinite period;
  3. Be a participant in the MRA on the date called or ordered to duty; and
  4. Satisfy the Plan's election requirements for a Qualified Reservist Distribution (QRD).
 
If an employee believes that he/she is eligible for a QRD, they must contact their Personnel Office to complete Attachment I - Qualified Reservist Distribution Request Form (CalHR 902). The Personnel Office will need to confirm that the employee meets the QRD requirements reflected above. The form must be submitted by March 15th of the following year of participation to request a QRD. The form is located on CalHR's web site as a fill and print document in the forms directory.
 
 

712. COBRA

Federal Legislation (Public Law 99-272, Title X), entitled Consolidated Omnibus Budget Reconciliation Act (COBRA), requires that employers allow FlexElect participants who are enrolled in a MRA to continue their enrollment in the event they lose their coverage due to one of the qualifying events listed below.
  • Voluntary or Involuntary Termination or Reduction of Hours*
  • Retirement
  • Death of Employee
 
*Reduction of hours includes: Full-time to part-time, strikes, layoffs, leave of absence, military call-up, and permanent-intermittent.
 
If employees elect to continue enrollment under COBRA, the pretaxed funds they have already contributed to their MRA will be available for reimbursement of any future eligible expenses they may incur (through the end of the plan year), for as long as they continue to make monthly COBRA premium payments.
 
It is important to note that COBRA premiums are not pretaxed as the participant no longer has a monthly income to reduce his/her tax liability. If employees choose NOT to continue enrollment under COBRA, the pretaxed funds they have already contributed to their MRA will only be available for reimbursement of eligible expenses incurred before the loss of coverage.
 
"Internal Revenue Service" does not require "COBRA" enrollment to continue payments into an employee's Dependent Care Reimbursement Account (only a Medical Reimbursement Account).
 

 

COBRA Initial Notice

The COBRA Initial Notice is the first of the two required COBRA notices. In compliance with the provisions of COBRA requiring the employer to notify participants of their COBRA rights, the Personnel Office must provide the initial notice to employees within 90 days of their enrollment in the MRA (i.e., when they first become covered under the MRA). An exception to the 90-day rule is when a qualifying event occurs before the initial notice is provided. In that case, an initial notice must be provided along with the election notice and election form.
 
The COBRA Initial Notice is intended to provide a summary of their right to continue the MRA under COBRA if they experience a COBRA qualifying event. This is not a COBRA Election Notice. See Attachment C - COBRA Initial Notice, for a sample of an Initial COBRA Notification. The COBRA Initial Notice is also available on CalHR's web site.
 
 

COBRA Election Notice and COBRA Election Form (CalHR 689)

Department Personnel Office - The Personnel Office should be aware of when an employee dies, termination from employment, or a reduction in hours that results in a loss of eligibility. At the time the qualifying event has occurred or when notified timely of a qualifying event, the departmental Personnel Office must provide within 14 days, a COBRA Election Notice (see Attachment D - COBRA Election Notice for a sample) and COBRA Election Form (CalHR 689) (see Attachment E - COBRA Election Form (CalHR 689) for a sample) to the employee. The COBRA Election Notice and Election Form is also available on CalHR's web site.
 
A Reimbursement Account Enrollment Authorization (STD. 701R) should also be included with the notification. If the COBRA enrollment is elected, the Personnel Office should assist in the completion of the STD. 701R. After the completed STD. 701R, COBRA Election Form, and initial COBRA payment is returned, the department should retain copies for their records and submit the original package to CalHR.
 
Employee Responsibility - The employee has the responsibility to inform the departmental Personnel Office when a qualifying event occurs. The Personnel Office must receive the notification within 60 days after the date of the event or the date on which coverage is lost. If the notice to the Personnel Office is not received timely, then COBRA continuation coverage will not be offered.
 
 

Employee Responsibility After Receiving COBRA Election Notice and COBRA Election Form

If the employee wishes to elect COBRA, he/she must complete the COBRA Election Form and a STD. 701R for "COBRA Continuation" and send both documents to the Personnel Office within 60 days from the date of the COBRA Election Notice.
 
In addition, the enrollee must submit a personal check, money order, or cashier's check payable to CalHR in the amount of one monthly premium plus an additional 2% for administrative costs. For example, if a participant elects to continue a MRA at $100.00 a month, the total monthly COBRA premium will be $102.00. Subsequently, by the first of each month employees are responsible for submitting their COBRA payment to CalHR.
 
 
CalHR's Responsibility After Receiving Completed COBRA Election Form
CalHR will send a COBRA Enrollment Confirmation Memo to participants. CalHR will process participants' payments and ensure the amounts are credited to their MRA.
 
 

Events Resulting in the Loss of COBRA Coverage

  1. Failure to pay the required contributions within the prescribed timeframes.
  2. Failure to request reimbursement for valid medical expenses by June 30 for the prior plan year account.
 
 

Form Completion

The Reimbursement Enrollment Authorization (STD. 701R) is used as the COBRA Continuation Verification notice. Only the following sections should be completed:
  • Section 1: Mark "COBRA Continuation of MRA".
  • Section 2: Indicate the Social Security Number of the enrolled employee.
  • Section 5A: Indicate the monthly COBRA contribution amount (not including the administrative fee).
  • Section 7: Participant must provide their original signature/date.
  • Section 8: Indicate the effective date of the COBRA enrollment which is the month following their last paycheck. For example, if the employee is paid on August 1st for the July pay period, the effective date for the COBRA contribution should be September 1st. See Example 9 in Section 723.
  • Section 10: Indicate the date of the qualifying event; i.e., date of retirement, date of termination of employment.
  • Sections 14-15: Indicate appropriate information.
  • Section 16: Indicate the type of qualifying event, i.e., retirement, termination of employment. Provide participant's phone number and home address. A confirmation statement will be sent to the address you provide.
  • Section 17 - 20: Indicate appropriate information.
 
Keep one copy of the completed STD. 701R with the COBRA Election Form in the employee's personnel file and mail the original STD. 701R and COBRA payment to the:
 
California Department of Human Resources
Benefits Division/FlexElect Program
1515 S Street North Building, Suite 400
Sacramento, CA 95811-7258
 
Do not send any copies to SCO.
 
 

713. Retiring While Enrolled in FlexElect

Retired employees are not eligible for FlexElect. Accordingly, there are several different situations that may apply to employees who retire while enrolled in FlexElect. The following gives examples of these situations and the appropriate action that should be taken.
 
If employees retire and;
 

1. choose the Cash Option instead of their own medical insurance plan;

Employees have up to 30 days prior to and 60 days following, the date of their retirement to enroll in any California Public Employees' Retirement System (CalPERS) medical insurance plan. If employees do not enroll within the specified time period, they must wait until the next health open enrollment period. The enrollment at that point would be handled through CalPERS.
 
Form processing:
  • Enrolls in a health plan up to 30 days prior to retirement: Employees must complete an HBD-12 to enroll in health and a STD. 701C to cancel their FlexElect enrollment. The Permitting Event Code to be used on the STD. 701C is 88, and the Permitting Event Date is the date the HBD-12 is received in the employing office (as shown on the form). Both forms should be submitted as a package to SCO for processing.
  • Enrolls in a health plan no later than 60 days after retirement: The Personnel Office must complete an HBD-12 and submit to CalPERS for processing. It is not necessary for employees to complete a STD. 701C to cancel their FlexElect as their enrollment will be automatically terminated upon their retirement in SCO's payroll system.
 
 

2. choose the Cash Option instead of their own dental insurance plan;

Employees have up to 30 days prior to and 60 days following the date of their retirement to enroll in a State-sponsored dental insurance plan. If employees do not enroll within the specified time period, they must wait until the next dental open enrollment period. The enrollment at that point would be handled through CalPERS.
 
Form processing:
  • Enrolls in a dental plan up to 30 days prior to retirement: Employees must complete a STD. 692 to enroll in dental and a STD. 701C to cancel their FlexElect enrollment. The Permitting Event Code to be used on the STD. 701C is 88, and the Permitting Event Date is the date the STD. 692 is received in the employing office (as shown on the form). Both forms should be submitted as a package to SCO for processing.
  • Enrolls in a dental plan no later than 60 days after retirement: The Personnel Office must complete a STD. 692 and submit to CalPERS for processing. It is not necessary for employees to complete a STD. 701C to cancel their FlexElect as their enrollment will be automatically terminated upon their retirement in SCO's payroll system.
 
 

3. retain their State-sponsored medical insurance plan;

No action is necessary for employees to continue their medical insurance benefit into retirement. CalPERS will automatically continue employees' medical plans in retirement.
 
 

4. retain their own State-sponsored dental insurance;

The Personnel Office will need to complete a STD. 692 to continue the employees dental insurance benefits into retirement. This form is necessary because CalPERS processes dental enrollments for retirees and retiree information must be entered into the CalPERS' database.
 
 

5. use the Medical Reimbursement Account;

Deductions into the account will automatically stop upon retirement. Employees may continue their Medical Reimbursement Account contributions under COBRA. See COBRA information and enrollment instructions in Section 712, Correcting FlexElect Open Enrollment Documents.
 
 

6. use the Dependent Care Reimbursement Account.

Deductions into the account will automatically stop upon retirement. Retired employees cannot continue their dependent care contributions under COBRA.
 
 

714. Unit 6 Employees

Unit 6 employees may NOT enroll in the Cash Option in lieu of dental insurance. There are no exceptions to this restriction which is part of the union's trust agreement. Unit 6 employees MAY enroll in the Cash Option in lieu of medical insurance and one or both of the reimbursement accounts.
 
If a Unit 6 employee is enrolling in the Cash Option in lieu of medical insurance and chooses not to enroll in a union-sponsored dental plan, you must enter "N/A" (not applicable) on the STD. 701C in Section 4 Item B. Even though this employee does not wish to enroll in the union-sponsored dental plan, he/she will not be able to receive cash in lieu of dental insurance.
 
 

715. Form Completion

In cases of two married or two domestic partner State employees, where more than one employing department is involved and both employees are making changes in their medical and/or dental insurance for purposes of enrolling in FlexElect, the departmental Personnel Office staff with the employee enrolling in FlexElect, should assume the responsibility of coordinating all forms. These forms could include the spouse's or domestic partner's Health Benefits Enrollment (HBD-12) or Health Benefit and Enrollment History page after confirmation from my|CalPERS and/or the Dental Plan Enrollment Authorization (STD. 692) forms. All forms must be submitted as a package to SCO with the FlexElect Enrollment Forms(s) (STD. 701C and/or STD. 701R). In the event both employees enroll in FlexElect, one departmental Personnel Office should assume responsibility to coordinate all the enrollment documents and send them to the SCO as a package. When applicable include the spouse's or domestic partner's SSN on all forms.
 
The Personnel Office is responsible for confirming with the employee the accuracy of all information provided on the FlexElect Enrollment Authorization forms.
 
 

716. STD 701C - Cash Option Enrollment Form

Instructions to assist employees in completing Sections 1-7 are contained in the FlexElect Handook on pages 17-18. The Personnel Office should review each enrollment form to ensure it has been completed correctly. The Personnel Office should then complete the remainder of the form, Sections 8-21. Specific instructions for completion of the document are outlined below:
 
Section 1 - Enrollment: - If employees are:
  • enrolling during the annual enrollment period, check Item A.
  • enrolling as "newly eligible" (i.e. enrolling outside an open enrollment period due to a permitting event), check Item B.
  • changing their FlexElect enrollment because they have experienced a valid change in status event (permitting event), check Item C.
  • cancelling their enrollment as the result of a valid change in status event, check Item D.
 
Section 2 - Social Security Number:
 
Section 3 - Name: First name, middle initial and last name of employee.
 
Section 4 - Cash Option:
  • Medical Coverage - If employees are electing to receive the Cash Option in lieu of their medical coverage, then enter $128.00 in Item A. If they do not want to receive the cash and wish to keep their State-sponsored health plan, they must enter "N/A" in Item A.
  • Dental Coverage - If employees are electing to receive the Cash Option in lieu of their dental coverage, then enter $12.00 in Item B. If they do not want to receive the cash and wish to keep their State-sponsored dental plan, they must enter "N/A" in Item B.
  • Total Cash - Employees enter the total Cash Option amount (sum of Items A & B) in Item C.
 
Section 5 - SCO Use Only: Do Not Complete
 
Section 6 - Statement of Other Medical and/or Dental Coverage: Must be completed when enrolling into a Cash Option.
  • Item A and/or B: Indicate the carrier name for the other medical and/or dental insurance.
  • Item C: Check the appropriate box showing through whom is the other coverage.
  • Item D: Complete this section only if the medical and/or dental insurance is through a parent, spouse or domestic partner. Indicate the parent, spouse's/domestic partner's social security number.
 
Section 7 - Important Program Information and Employee Signature/Date: This section contains important information that employees should be aware of when enrolling in FlexElect. Their signature certifies they have other medical and/or dental coverage and they have read the information and agree to the terms and conditions of the Program as outlined on the Cash Option Enrollment Authorization (STD. 701C) and in the FlexElect Handbook.
 
Section 8 - Effective Date of Action: The effective date of action during open enrollment is January 1. For documents processed outside the open enrollment period refer to the effective date rule for the appropriate permitting event.
 
Section 9 - Employee CBID: Indicate the employee's Collective Bargaining Designation and Unit.
 
Section 10 - Permitting Event Date: Complete this section for newly eligible enrollments or allowable change requests due to a permitting event. The Permitting Event Date is the date when an employee experienced a valid change in status event (permitting event). Do not complete this area for open enrollment requests.
 
Section 11 - Permitting Event Code: Indicate the appropriate code as provided on Appendix A of this manual. The Permitting Event Code refers to an allowable enrollment change during the plan year due to a valid change in status event (permitting event). Do not complete this section for open enrollment requests.
 
Section 12 - Health Form Attached (HBD-12): If employees are making any changes to their current medical insurance plan, attach the HBD-12 or Health Benefit and Enrollment History page after confirmation from my|CalPERS to the FlexElect enrollment form and check box "Yes". If employees are not making any changes to their current medical insurance plan, do not attach an HBD-12 or Health Benefit and Enrollment History page after confirmation from my|CalPERS to the FlexElect enrollment form and check box "No".
 
Section 13 - Dental Form Attached (STD. 692): If employees are making any changes to their current dental insurance plan, attach the STD. 692 to the FlexElect enrollment form and check box "Yes". If employees are not making any changes to their current dental insurance plan, do not attach a STD. 692 to the FlexElect enrollment form and check box "No".
 
Section 14 - Permanent Intermittent: Indicate if the employee is Permanent- Intermittent.
 
Section 15 - Agency Code: Indicate the employee's agency code.
 
Section 16 - Unit Code: Indicate the employee's reporting unit code.
 
Section 17 - Remarks: Complete this section to provide additional information to clarify the action being taken. If the employee is also enrolling in a reimbursement account(s), please indicate "STD. 701R attached".
  • Important Note: For new enrollments, describe the permitting event that makes the employee newly eligible.
 
Section 18 - Agency Name: Indicate the name of the employee's department or agency.
 
Section 19 - Authorized Agency Signature: The signature of the individual in the Personnel Office who is authorized to complete the FlexElect enrollment form.
 
Section 20 - Date Received in Employing Office: Indicate the date the FlexElect enrollment form was received in the employing office.
 
Section 21 - Telephone Number: Indicate the telephone number of the individual signing the "Authorized Agency Signature". Use the CALNET number if the Personnel Office is outside the Sacramento area.
 
 

717. STD 701R - Reimbursement Account Enrollment

Instructions to assist employees in completing Sections 1-7 are contained in the FlexElect Handbook. The Personnel Office should review each enrollment form to ensure it has been completed correctly. The Personnel Office should then complete the remainder of the form, Sections 8-20. Specific instructions for completion of the form are outlined below:
 
Section 1 - Enrollment:
If employees are:
  • enrolling during the annual open enrollment period, check Item A.
  • enrolling as "newly eligible" (i.e. enrolling during a non-open enrollment period due to a permitting event), check Item B.
  • changing their enrollment because they have experienced a valid change in status event (permitting event), check Item C.
  • cancelling their enrollment as the result of a valid change in status event, check Item D.
  • electing to continue their MRA via COBRA, check item E.
 
Section 2 - Social Security Number:
 
Section 3 - Name: First, middle initial and last name of employee.
 
Section 4 - SCO Use Only: Do Not Complete
 
Section 5 - Total Monthly Amount to be Deducted: Amounts are withheld from the employee's paycheck and deposited in the appropriate account
  • 5A: Indicate the monthly Medical Reimbursement Account deduction.
  • 5B: Indicate the monthly Dependent Care Reimbursement Account deduction.
.
Section 6 - SCO Use Only: Section 7 - Important Program Information and Employee Signature/Date: This section contains important information that employees should be aware of when enrolling in FlexElect. Their signatures certify that they have other medical and/or dental coverage and that they have read the information and agree to the terms and conditions of the Program as outlined on the Reimbursement Account Enrollment Authorization (STD. 701R) and in the FlexElect Handbook.
 
Section 8 - Effective Date of Action: The effective date of action during open enrollment is January 1. For non-open enrollment forms refer to the effective date rule for the appropriate permitting event.
 
Section 9 - Employee CBID: Indicate the employee's Collective Bargaining Designation and Unit.
 
Section 10 - Permitting Event Date: Complete this section for newly eligible enrollments or allowable change requests due to a permitting event. The Permitting Event Date is the date when an employee experienced a valid change in status event (permitting event). Do not complete this area for open enrollment requests.
 
Section 11 - Permitting Event Code: Indicate the appropriate code as provided on Appendix A of this manual. The Permitting Event Code refers to an allowable enrollment change during the plan year due to a valid change in status event (permitting event). Do not complete this section for open enrollment requests.
 
Section 12 - Health Form Attached (HBD-12): If employees are making any changes to their current medical insurance plan, attach the HBD-12 or Health Benefit and Enrollment History page after confirmation from my|CalPERS to the FlexElect enrollment form and check box "Yes". If employees are not making any changes to their current medical insurance plan, do not attach an HBD-12 or my|CalPERS documentation to the FlexElect enrollment form and check box "No".
 
Section 13 - Dental Form Attached (STD. 692): If employees are making any changes to their current dental insurance plan, attach the STD. 692 to the FlexElect enrollment form and check box "Yes". If employees are not making any changes to their current dental insurance plan, do not attach a STD. 692 to the FlexElect enrollment form and check box "No".
 
Section 14 - Agency Code: Indicate the employee's agency code.
 
Section 15 - Unit Code: Indicate the employee's reporting unit code.
 
Section 16 - Remarks: Complete this section to provide additional information to clarify the action being taken. If employees are also enrolling in the Cash Option, please indicate "STD. 701C attached".
  • Important Note: For new enrollments, describe the permitting event that makes the employee newly eligible.
 
Section 17 - Agency Name: Enter the name of the employee's department or agency.
 
Section 18 - Authorized Agency Signature: The signature of the individual in the Personnel Office who is authorized to complete the FlexElect enrollment form.
 
Section 19 - Date Received in Employing Office: Indicate the date the FlexElect enrollment form was received in the employing office.
 
Section 20 - Telephone Number: Enter the telephone number of the individual signing the "Authorized Agency Signature". Use the CALNET number if the Personnel Office is outside the Sacramento area.
 
 

718. HBD-12 and STD 692 - Additional Documentation

In addition to the FlexElect Enrollment Authorization Forms (STD. 701C/ STD. 701R), a Health Benefits Enrollment Form (HBD-12) Health Benefit and Enrollment History page after confirmation from my|CalPERS and/or Dental Plan Enrollment Authorization (STD. 692) are required if employees are:
  1. Changing their current health and/or dental plan to different carriers.
  2. Changing the number of dependents on their health and/or dental plan.
  3. Cancelling their health and/or dental plan. Remember, those employees who cancel and become a dependent on their spouse's or domestic partner's plan must also submit their spouse's or domestic partner's HBD-12 and/or STD. 692 if the spouse or domestic partner is a State employee. Also, the effective date of the employee's cancellation must be the same date the spouse or domestic partner added him/her as a dependent.
 
If employees do not make any medical or dental insurance plan changes, a HBD-12 or my|CalPERS documentation and/or STD. 692 is not required as a part of the FlexElect package.
 
CalHR and CalPERS require that a marriage certificate be submitted when a spouse is added. For a domestic partner, the Declaration of Domestic Partnership and Statement of Financial Liability must be submitted. These documents should be maintained in the employee's Personnel file. This requirement applies at the time of a new enrollment, a new marriage, domestic partnership, during the open enrollment period, or through the Health Statement Application process.
 
CalHR and CalPERS also require an Affidavit of Eligibility to enroll an economically dependent child who resides with the employee in a regular parent/child relationship. Please refer to the CalPERS Health Benefits Procedures Manual and the CalHR State Dental Program Procedures Manual for instructions on these requirements. Failure to submit these documents with the FlexElect package when required may delay the processing of all documents in the FlexElect package and thereby impact the effective date of an eligible enrollment.
 
 

Completion of Health Benefits Enrollment Form (HBD-12) During Open Enrollment

  • Effective Date: January 1 (of the following year)
  • Permitting Event Date: Beginning of open enrollment date (of the current year)
  • Reason Code: Use appropriate code for action
  • Remarks: Provide a brief explanation of what is happening.
    • i.e. FlexElect - Employee adding dependents, spouse, domestic partner, taking Cash Option
    • i.e. FlexElect - Employee cancelling coverage, enrolling in Cash Option
    • i.e. FlexElect - Employee changing plans
 
Please refer to the Health Benefits Procedures Manual for detailed instructions when completing the HBD-12. Any questions regarding health benefits or completion of the HBD-12, should be directed to CalPERS, Health Benefit Services Division at 1-888-225-7377.
 
 

Completion of Dental Plan Enrollment Authorization (STD. 692) During Open Enrollment

  • Effective Date: January 1 (of the following year)
  • Permitting Event Date: Beginning of open enrollment date (of the current year)
  • Permitting Event Code: Use appropriate code for action
  • Remarks: Provide a brief explanation of what is happening.
    • i.e. FlexElect - Employee adding dependents, spouse, domestic partner, taking Cash Option
    • i.e. FlexElect - Employee cancelling coverage, enrolling in Cash Option
 
Please refer to the Dental Program Procedures Manual for detailed instructions when completing the STD. 692. Any questions regarding dental benefits or completion of the STD. 692 should be directed to CalHR's, Benefits Division at (916) 322-0300 or CALNET 492-0300.
 
 

719. Employee not Re-Enrolling

If employees do not elect to reenroll in the FlexElect Program for the next Plan Year and do not wish to make any changes to their medical and/or dental insurance they will not be required to complete a HBD-12 and/or STD. 692 to continue their traditional medical and dental insurance at their current level of benefits.
 
Employees who were enrolled in the Cash Option and do not want to be automatically reenrolled will need to cancel their enrollment. In addition, in order to obtain State-sponsored benefits they MUST reenroll in a medical and/or dental insurance plan.
 
Reenrollment into traditional health and/or dental is NOT automatic for Cash Option participants who elect to cancel their enrollment. Completion of the HBD-12/STD. 692 forms are required. In this instance, they should follow the instructions on page 32.
 
If employees do not wish to reenroll in the FlexElect Program for the next plan year and wish to make changes to their medical and/or dental insurance, they MUST complete a HBD-12 and/or STD. 692 reflecting the changes. The HBD-12 should be sent to CalPERS for processing and the STD. 692 should be sent to the SCO for processing.
 

The HBD-12 and/or STD. 692 must be completed during the FlexElect Open Enrollment Period. Use the following information when completing these forms:

  • Effective Date: January 1 (of the following year)
  • Permitting Event Date: Beginning of open enrollment date (of the current year)
  • Reason Code: 104 (HBD-12)
  • Permitting Event Code: 03 (STD. 692)
  • Remarks: Enter "Employee cancelling FlexElect and reenrolling in traditional State-sponsored medical (or dental) insurance."
 
For dental insurance, remember that the choice employees made for dental insurance is a three-year commitment. Accordingly, if employees opted out of dental and received cash, they cannot reenroll in a State-sponsored dental plan, for three years, unless they lose their "other" coverage (under spouse, domestic partner, or other coverage). Please see Section 702, Plan Options, for more information regarding the three-year commitment.
 
 

720. Forms Distribution

The FlexElect Handbook contains one copy of both the Cash Option Enrollment Authorization (STD. 701C) and the Reimbursement Account Enrollment Authorization (STD. 701R). If employees enroll by using one of these forms, two additional copies of the form must be photocopied. Return one copy to the employee for his/her personal records; retain one copy in the Personnel Office. Be sure to attach all other appropriate forms (i.e. HBD-12 Health Benefit and Enrollment History page after confirmation from my|CalPERS, STD. 692) to the original.
 
If employees use the three-part, color-coded enrollment forms the distribution is as follows:
  • Original - SCO
  • Pink Copy - Agency
  • Goldenrod - Employee (STD. 701C)
  • Green - Employee (STD. 701R)
 
 
Send completed enrollment forms to:
 
State Controllers' Office
Division of Personnel/Payroll Services
Flexible Benefits Unit
P.O. Box 942850
Sacramento, CA 94250-5878
 
 

721. Correcting FlexElect Open Enrollment Documents

FlexElect packages will be audited by SCO staff to ensure that all forms are completed correctly. If a HBD-12 Health Benefit and Enrollment History page after confirmation from my|CalPERS and/or STD. 692 are included, those forms will be audited as well. This audit includes ensuring that:
  • the employee is eligible to enroll in FlexElect and,
  • signatures are completed, and
  • reimbursement account deductions are within minimum/maximum dollar limits.
 
If errors are found on the initial "face audit" of the enrollment forms, SCO will return the package to the Personnel Office with a Discrepancy Notice (PR 250J). If no errors are found, the forms will be processed.
 
During processing, SCO's database system will also audit the forms. If an error is found during this audit process, SCO will return enrollment forms to the Personnel Office accompanied by a PR 250J. If an error is found on an accompanying HBD-12, the Health Benefits Division at CalPERS will return the HBD-12 with a correction notice to SCO, who will cancel the FlexElect enrollment and return the enrollment forms to the Personnel Office.
 
Forms should be corrected immediately and returned to SCO along with the discrepancy notice. The corrected form(s) MUST note at the top of the form(s) "CORRECTED FORM". CalPERS requests that the reference to "CORRECTED FORM" be placed in the Remarks Section of the HBD-12 and not across the top. It is important that returned forms be given priority and are corrected and resubmitted to SCO immediately. This will ensure the transactions are processed so the employees' FlexElect elections are in effect on their paycheck dated January 1. It will also help to eliminate any retroactive issues which may cause the effective date to be changed because the new plan year has started.
 
Corrected or new enrollment forms "replace" the preceding forms, so it is important that ALL information be provided, not just those items that need corrections.
 
 

722. Cancellations/Changes to Open Enrollment Documents

Employees who enroll or make changes to their FlexElect during the open enrollment period and employees who are automatically reenrolled into the Cash Option are allowed by Internal Revenue Code 125 to cancel or change their elections until December 31 of the current plan year. A new STD. 701C and/or STD. 701R must be completed AND signed by the employee by December 31. No new enrollments or changes will be allowed in any options not elected during the open enrollment period. Once the new plan year begins, employees may not cancel or change their FlexElect enrollment unless they experience a valid change in status. Please see Section 705, Election Changes/Change in Status Events, for more information regarding valid changes in status.
 
The correcting form must be received by SCO no later than January 10 (or the next business day if January 10 falls on a weekend or holiday). Correcting forms received by SCO by December 5 (or the next business day if December 5 falls on a weekend or holiday) will be reflected on the December pay warrants dated January 1. Correcting forms received after December 5 will require retroactive adjustments. It is not necessary to send these types of correcting forms to CalHR for approval; SCO will process.
 
 

Forms Completion

Cancellations - STD. 701C and/or STD. 701R
  • Employee completes a new STD. 701C and/or STD. 701R. If an enrollment form was actually completed indicate at the top "Cancelling Open Enrollment Form". If employee is completing a STD. 701C to cancel his/her automatic reenrollment, indicate at the top "Cancelling Automatic Reenrollment".
  • Items 1, 2 and 3, must be completed and the employee must sign and date in Item 7.
  • On the STD. 701C, Sections 4A, 4B and 4C must also be completed to indicate what Cash Option amount is to be cancelled by zeroing out the cancelled portion.
  • The Personnel Office must complete their appropriate sections and forward to SCO.
 
Changes - STD. 701C and/or STD. 701R
  • Employee completes a new STD. 701C and/or STD. 701R. Indicate at the top "Changing Open Enrollment Form".
  • All sections on the form must be completed just as if the election had been made during the open enrollment period. The information on the form should reflect the changes you are requesting. For example, if you are deleting the dental cash, but maintaining the medical cash, the amount of $128 should be listed on 4A as well as the total on 4C of the STD. 701C. For a change in a reimbursement account, simply list the correct deduction amount(s) on lines 5A and/or B on the STD. 701R.
  • The Personnel Office will complete their appropriate sections and forward to SCO.
 
If the HBD-12 (Health) and STD. 692 (Dental) forms were completed cancelling coverage and the employee now wants to maintain coverage, new forms reenrolling the employee must be completed and forwarded along with the STD. 701C.
 
 

723. Example Situations

Following are some examples of different scenarios of FlexElect options employees may choose. Please keep in mind these are examples to help illustrate what form(s) should be completed. With every different situation and dates involved, the form(s) will be completed differently.
 
Each example begins with an explanation of the employee's current status, his/her desired FlexElect elections, and the actions required by the employee, his/her spouse or domestic partner, and the Personnel Office.
 
In all examples, the "employee" is the State employee and is the principal figure in the scenario. The "employee's spouse or domestic partner" in some examples is a State employee or may be employed by private industry.
 
The information/examples in this manual does not reflect every possible type of enrollment/change within FlexElect but hopefully provide a broad range of enrollment and change situations.
 
 

Example 1 - Open Enrollment/Cash Option (New Enrollment)

  • SITUATION: Open Enrollment, Cash Option for Medical and Dental - New Enrollment, Spouse or Domestic Partner Also a State Employee
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Jill A. Gordon (also a State employee)
  •  CURRENT STATUS
    • Employee is currently enrolled in his own State-sponsored medical and dental insurance plans. Employee's spouse or domestic partner, who is also a State employee, is currently enrolled in her own State-sponsored medical and dental insurance plans. Spouse or domestic partner is not currently covering any dependents.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to enroll in FlexElect for the Cash Option in lieu of his own State-sponsored medical and dental insurance plan.
  • FORMS REQUIRED
    • Employee - STD. 701C, HBD-12, STD. 692
    • Spouse/Domestic Partner - HBD-12, STD. 692
  • ACTION REQUIRED
    • Employee must complete a STD. 701C to enroll in the Cash Option. Employee must also complete an HBD-12 and a STD. 692 to cancel his own medical and dental insurance.
    • Spouse/Domestic Partner must complete an HBD-12 and a STD. 692 to add employee plus any dependents on her medical and dental insurance
    • Employee's Personnel Office must coordinate the employee's STD. 701C, HBD-12 and STD. 692 and his spouse's/domestic partner's HBD-12 and STD. 692. Spouse's/Domestic Partner's Personnel Office must complete the "Agency Use Only" section of the spouse's/domestic partner's forms and send the forms to the Employee's Personnel Office.
    • Employee's Personnel Office must complete the "Agency Use Only" section of the employee's forms; receive and review spouse's/domestic partner's forms to ensure that all documents are completed accurately and submit them as a package to SCO. The package should be assembled so that the STD. 701C is on top.
 
 

Examples: 2 - Open Enrollment/Cash Option (New Enrollment)

  • SITUATION: Open Enrollment, Cash Option for Medical, Maintaining State-Sponsored Dental Insurance, Enrolling In Both a Medical and Dependent Care Reimbursement Account, Spouse/Domestic Partner Is Not a State Employee
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Yes (not a State employee) 
  • CURRENT STATUS
    • Employee is currently not enrolled in his own State-sponsored medical insurance plan but he is currently enrolled in his own State-sponsored dental insurance plan. Employee is covering his dependent on his dental plan.
    • Employee's spouse/domestic partner, who is employed by private industry (not a State employee) is currently enrolled in her own private industry sponsored medical and dental insurance plans and is covering the employee and their dependent.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to enroll in FlexElect for the Cash Option in lieu of his own State-sponsored medical insurance plan and keep his dental insurance as it is. Employee also wants to put $100 per month ($1,200 per year) into the Medical Reimbursement Account and $300 per month ($3,600 per year) into the Dependent Care Reimbursement Account. 
  • FORMS REQUIRED
    • Employee - STD. 701C and STD. 701R
    • Spouse/Domestic Partner - None
  • ACTION REQUIRED
    • Employee must complete a STD. 701C to enroll in the Cash Option and a STD. 701R to enroll in the Medical and Dependent Care Reimbursement Accounts.
    • Employee's Personnel Office must complete the "Agency Use Only" section of the STD. 701C and STD. 701R and ensure the rest of the form is completed accurately and submit to SCO.
 
 

Examples: 3 - Open Enrollment/Two State Employees

  • SITUATION: Open Enrollment - Two State Employees Both Enrolling in FlexElect
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Jill A. Gordon (also a State employee)
  • CURRENT STATUS
    • Employee is currently enrolled in his own State-sponsored medical and dental insurance plans; employee covers his dependent on both plans. Spouse/Domestic Partner currently is enrolled in her own State-sponsored medical and dental insurance plans and does not cover any dependents.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to enroll in FlexElect for the Cash Option in lieu of his own medical and dental insurance. Spouse/Domestic Partner wants to enroll in FlexElect and put $100 per month ($1,200 per year) into a Medical Reimbursement Account and $200 per month ($2,400 per year) into a Dependent Care Reimbursement Account. In addition, spouse/domestic partner wants to enroll employee and her dependent on her medical and dental insurance plans.
  • FORMS REQUIRED
    • Employee - STD. 701C, HBD-12, STD. 692
    • Spouse/Domestic Partner - STD. 701R, HBD-12, STD. 692
      • Marriage Certificate Required or Declaration of Domestic Partnership/Statement of Financial Liability
  • ACTION REQUIRED
    • Employee must complete a STD. 701C and spouse/domestic partner must complete a STD. 701R to enroll in FlexElect. In addition the employee must also complete an HBD-12 and STD. 692 to cancel his own medical and dental insurance; spouse/domestic partner must also complete an HBD-12 and STD. 692 to add employee and their dependent to both her medical and dental insurance.
    • Employee's Personnel Office must assemble the employee's STD. 701C, HBD-12 and STD. 692; complete the "Agency Use Only" section of each form; and ensure that all forms are completed accurately. Spouse's/Domestic Partner's Personnel Office must assemble the spouse's/domestic partner's STD. 701R, HBD-12, and STD. 692; complete the "Agency Use Only" section of each form; and ensure that all forms are completed accurately. One Personnel Office must coordinate submission of both the employee's and the spouse's/domestic partner's forms to SCO. The package should be assembled so that the STD. 701C and STD. 701R are on top.
 

 

Examples: 4 - Open Enrollment/Cancellation of Automatic Cash Option
  • SITUATION: Open Enrollment, Cancellation of Automatic Cash Option Reenrollment
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Jill A. Gordon
  • CURRENT STATUS
    • Employee is currently enrolled in FlexElect for the Cash Option in lieu of medical insurance and dental insurance. Employee is enrolled on spouse's/domestic partner's health and dental plan. Spouse/Domestic Partner works for private industry.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to cancel automatic Cash Option reenrollment for the next FlexElect plan year and enroll into State-sponsored medical and dental plans.
  • FORMS REQUIRED
    • Employee - STD. 701C, HBD-12, STD. 692
  • ACTION REQUIRED
    • Employee must complete a STD. 701C to cancel his automatic Cash Option reenrollment for the next FlexElect plan year. In addition, the employee must also complete an HBD-12 and STD. 692 to enroll into State-sponsored health and dental plans.
 
 

Examples: 5 - Open Enrollment/Change of Automatic Cash Option Reenrollment

  • SITUATION: Open Enrollment, Change of Automatic Cash Option Reenrollment
    • Employee: Jill A. Gordon
    • Spouse/Domestic Partner: Jack A. Gordon 
  • CURRENT STATUS
    • Employee is currently enrolled in FlexElect for the Cash Option in lieu of both medical insurance and dental insurance. Employee has been receiving FlexElect Cash in lieu of dental insurance for three years. Spouse/Domestic Partner works for private industry. 
  • DESIRED FLEXELECT ELECTIONS
    • Employee wishes to maintain FlexElect Cash in lieu of health insurance, cancel FlexElect Cash in lieu of dental insurance, and enroll in a State-sponsored dental plan. 
  • FORMS REQUIRED
    • Employee - STD. 701C, STD. 692 
  • ACTION REQUIRED
    • Employee must complete a STD. 701C to change her automatic Cash Option reenrollment for the next FlexElect Plan Year. In addition, the employee must also complete a STD. 692 to enroll in a State-sponsored dental plan.
 
 

Examples: 6 - Open Enrollment/Medical Reimbursement Account and Automatic Cash Option Enrollment

  • SITUATION: Open Enrollment - Automatic Cash Option and Reenrolling in the Medical Reimbursement Account
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: None 
  • CURRENT STATUS
    • Employee is currently enrolled in a Medical Reimbursement Account (MRA) and the Cash Option. 
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to continue the Cash Option and wants to reenroll in the MRA with a monthly deduction of $50.00. 
  • FORMS REQUIRED
    • Employee - STD. 701R 
  • ACTION REQUIRED
    • Employee must complete a STD. 701R to reenroll into a MRA for the next FlexElect Plan Year. Because the employee's Cash Option enrollment will automatically continue for the next plan year, he is not required to complete a STD. 701C.
 

 

Examples: 7 - Permanent-Intermittent/Cash Option

  • SITUATION: Permanent-Intermittent Enrollment Cash Option
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Yes (not a State employee)
  • CURRENT STATUS
    • Permanent intermittent (PI) employee is currently enrolled in his own State-sponsored medical and dental insurance plans. The PI has his dependent enrolled under both his medical and dental plans.
    • The PI's spouse/domestic partner, who is not a State employee, is currently enrolled in her own private industry sponsored medical and dental insurance and currently does not cover the PI and their dependent on her plans.
  • DESIRED FLEXELECT ELECTIONS
    • The PI wants to enroll in FlexElect for the Cash Option in lieu of his own State-sponsored medical and dental insurance plan. 
  • FORMS REQUIRED
    • PI Employee - STD. 701C, HBD-12, STD. 692, STD. 674
    • Spouse/Domestic Partner - None 
  • ACTION REQUIRED
    • The PI must complete a STD. 701C to enroll in FlexElect. He must also complete an HBD-12 and a STD. 692 to cancel his own medical and dental insurance. The PI's spouse/domestic must add employee and their dependent on her private industry medical and dental insurance plans. The PI is responsible for ensuring that he and their dependent is added to his spouse's/domestic partner's coverage no later than January 1.
    • The PI's Personnel Office will complete the "Agency Use Only" section of each form; and ensure that all forms are completed accurately and submit only the HBD-12 and STD. 692 to SCO to cancel his medical and dental coverage. The Personnel Office will retain the STD. 701C. After completion of the January through June control period, if the PI has met all of the eligibility criteria, the Personnel Office will submit the STD. 701C and STD. 674 to SCO to request the cash payment.
 
 

Examples: 8 - Newly Eligible After Open Enrollment

  • SITUATION: Newly Eligible After Open Enrollment
    • Employee: Jill A. Gordon
    • Spouse/Domestic Partner: Jack A. Gordon (also a State employee)
  • CURRENT STATUS
    • Employee is a new hire to State service, appointed February 22, to a permanent full-time position. Employee is covered under her spouse's/domestic partner's medical and dental plans. Employee has declined enrollment into her own State-sponsored medical plan, but wants her own State-sponsored dental plan.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to enroll in FlexElect for the Cash Option in lieu of a State-sponsored medical plan. Employee wants her own State-sponsored dental plan.
      • Employee could also enroll into the Medical and/or Dependent Care Reimbursement Accounts, if she so desires.
  • FORMS REQUIRED
    • Employee - STD. 701C, HBD-12, STD. 692
    • Spouse/Domestic Partner - STD. 692
  • ACTION REQUIRED
    • Employee must complete a STD. 701C (within 60 days of her appointment) to enroll in FlexElect. Employee must also complete a STD. 692 to enroll in a State-sponsored dental plan. Employee must complete an HBD-12 to decline enrollment in a State-sponsored medical plan.
    • Spouse/Domestic Partner must complete a STD. 692 to delete employee from his dental plan. (Dual coverage is not allowed).
    • Employee's Personnel Office must assemble the employee's STD. 701C, HBD-12 and STD. 692 and his spouse's/domestic partner's STD. 692. Spouse's/Domestic Partner's Personnel Office must complete the "Agency Use Only" section of the spouse's/domestic partner's form and send the form to the employee's Personnel Office.
    • Employee's Personnel Office must complete the "Agency Use Only" section of the employee's forms; receive and review spouse's/domestic partner's form to ensure that it is completed accurately and submit the entire package to SCO.
 
 

Examples: 9 - COBRA/Medical Reimbursement Account

  • SITUATION: "COBRA" Enrollment For Medical Reimbursement Account
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: None
  • CURRENT STATUS
    • Employee is currently enrolled in FlexElect for the Medical Reimbursement Account (MRA) and maintains his medical and dental plans under FlexElect. Employee will retire from State service on July 16.
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to continue his MRA for $100 per month and keep his medical and dental plans.
    • "Internal Revenue Service" does not require "COBRA" enrollment to continue payments into an employee's Dependent Care Reimbursement Account (only a Medical Reimbursement Account).
  • FORMS REQUIRED
    • Employee - STD. 701R, STD. 692, COBRA Confirmation Letter (sent by CalHR to enrollee)
  • ACTION REQUIRED
    • Employee must complete a new STD. 701R to enroll into the FlexElect "COBRA" Program. No action is required to continue his medical insurance into retirement. Employee must complete a STD. 692 to continue his dental insurance into retirement.
    • Employees who separate from State service or become ineligible for FlexElect due to a time-base reduction can also enroll into the FlexElect "COBRA" Program, to continue their MRA.
    • Employee's Personnel Office must write "COBRA CONTINUATION" at the top of the STD. 701R and complete the "Agency Use Only" section of the STD. 701R; ensure form is completed accurately and submit to CalHR/BENEFITS DIVISION - FLEXELECT. Employee's Personnel Office must also ensure accuracy of the STD. 692 and submit to CalPERS for processing.
    • Employee will receive a COBRA Enrollment Confirmation Letter from CalHR.
 
 

Examples: 10 - Cancellation Due to Change in Status Event

  • SITUATION: FlexElect Cancellation - Due to Change in Status Event
    • Employee: Jack A. Gordon
    • Spouse/Domestic Partner: Yes (not a State employee)
  • CURRENT STATUS
    • Employee is currently enrolled in the FlexElect Cash Option in lieu of medical insurance and is enrolled in the Dependent Care Reimbursement Account (DCRA). Employee maintains a State-sponsored dental plan and is enrolled under his spouse's medical plan. Employee is covering spouse/domestic partner under his dental plan. Employee and spouse have divorced or domestic partnership termination effective October 31 (of the same year).
  • DESIRED FLEXELECT ELECTIONS
    • Employee wants to cancel all of his FlexElect elections and enroll in his own medical insurance plan. Employee wants to delete spouse/domestic partner from dental plan, which is mandatory in the case of divorce or termination of domestic partnership.
    • Employees must take action to cancel their FlexElect within 60 days after the date of divorce or termination of domestic partnership. This employee could have continued FlexElect and kept his DCRA, but in this case chose to cancel all FlexElect elections.
  • FORMS REQUIRED
    • Employee - STD. 701C, STD. 701R, HBD-12, STD. 692 Spouse/Domestic Partner - None
  • ACTION REQUIRED
    • Employee must complete a STD. 701C and STD. 701R to cancel FlexElect. Employee must also complete an HBD-12 to enroll into a medical plan and a STD. 692 to delete spouse/domestic partner from his dental plan. (Remember to offer spouse/domestic partner "COBRA" for dental) Employee's Personnel Office must complete the "Agency Use Only" section of the STD. 701C, STD. 701R, HBD-12 and STD. 692 and ensure accuracy, then submit the package to SCO.

Updated 12/17/2014