This program lets state employees set aside money in a reimbursement account to pay for certain kinds of expenses which can increase your take home pay and decrease your taxable income. You specify the amount to be deducted from your paycheck, and the deductions occur before tax withholding, reducing tax liability. We offer two types of accounts.
When you enroll in a reimbursement account, you designate an amount to be deducted each month from your wages. That money is automatically deposited in your account for one plan year. After you receive health-related or dependent care services during that year, you submit a claim for reimbursement from your account. Your reimbursement check is mailed to you, or you can request direct deposit into your checking or savings account.
Please read the plan handbook carefully before making a decision about enrolling in the program. This program offers many choices, and not all of them are beneficial for everyone. Contact your personnel office if you have any questions that aren't answered here or in the plan handbook. You may also wish to seek the advice of a qualified tax consultant.
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You are eligible to enroll in a reimbursement account if you have a permanent position that is half- time or more. If you have a limited term (LT) or temporary (TAU) position, you're eligible if you have a mandatory right of return to a permanent position that is half-time or more. If you're a permanent-intermittent employee, you're not eligible to enroll in a reimbursement account.
You may enroll in a reimbursement account within 60 days after becoming "newly eligible" for these benefits or during the annual fall Open Enrollment period.
Besides the annual Open Enrollment period, you also have the opportunity to enroll in a reimbursement account within 60 days after becoming "newly eligible. Events are as follows:
If you are newly eligible and want to enroll in a reimbursement account, you must submit enrollment forms to your personnel office within 60 days after becoming newly eligible. If you complete your forms correctly, and the State Controller's Office (SCO) receives them by the tenth of the month, your enrollment is effective the first of the following month (except when the tenth is on a weekend or holiday, in which case the cut-off date will be on the next regular workday).
For 2020: If you are newly eligible, your last possible effective date of participation in the 2020 plan year is December 1, 2020. For your enrollment to be effective December 1, 2020, the SCO must receive your enrollment form by November 10, 2020. Forms received after that date will be processed for the 2021 plan year.
If you increase your deduction amount because of a permitting event during the plan year, you may only claim the increased amount for expenses incurred from the effective date of your change (not the permitting event date).
You can't change or cancel your enrollment during the plan year unless there is a change in your status, called a "permitting event." See Changes in status "(permitting events)" for a list of "permitting events."
If you enroll in a reimbursement account, a $1.00 fee is deducted from your after-tax salary each month. This fee covers administrative costs of the program.
The IRS rule 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, you may use money deducted in the current plan year to pay medical and dependent care expenses incurred up to March 15, of the following year. You still have until June 30, of the following year to claim expenses incurred up to March 15, of the current year and any unused amount at that time will be forfeited pursuant to IRS Rules.
Example: 2020 Plan Year
March 15, 2021, to incur expenses
June 30, 2021, to claim expenses incurred up to March 15, 2021.
Claims are paid in the order which they are received. If you have an account balance in your prior plan year account, and submit a claim for service during the grace period (up to March 15 of the following year), the expense will automatically be paid from your prior plan year's account.
Because of this, it is important that you file claims in the order that your expenses are incurred. This will help to assure that you maximize the use of your accounts for both plan years.
2020: To ensure you get back all the funds in your reimbursement account for 2020, you must submit claims for services provided in 2020 by June 30, 2021.
2019: To ensure you get back all the funds in your reimbursement account for 2019, you must submit claims for services provided in 2019 by June 30, 2020.
Any funds left in your account after the June 30 deadline are forfeited.
Money deducted from your paycheck for a reimbursement account is not taxable, nor are the reimbursement payments. That lowers the amount of taxes you owe.
Actual tax savings vary from one individual to another, depending on deduction amount, salary, marital status, exemptions, and participation in other tax savings programs such as Savings Plus. See the 2020 FlexElect Handbook (PDF) | Text Only (RTF) for sample calculation.
While everyone benefits more by participating in the state's Medical Reimbursement Account, some people are better off claiming their Dependent Care expenses on their tax return. This issue is explained further in the Dependent Care account section. Before you make a final decision to enroll in a Reimbursement Account, it's a good idea to check with a tax advisor if you're unsure which option offers you the best tax advantage.
This section describes how to claim reimbursement from your account. Remember, the medical service or supply and/or dependent care must be provided before you can submit the claim. You also need to provide verification of the expense, described below.
Fill out Reimbursement Claim Form. (Available on CalHR's website at www.calhr.ca.gov.)
If claiming reimbursement from a medical account, attach doctor's statement, itemized bill, evidence of benefits statement, etc. A cancelled check is not acceptable documentation. The statement must have the date of service, type of service, and amount you are responsible for paying.
If claiming reimbursement from a dependent care account, attach a statement signed by your provider or have your provider sign in the space provided on the claim form. If you attach a statement, it must show the provider's name, beginning and ending dates of the dependent care service that was provided, the amount, and the provider's tax I.D. or Social Security Number. (If your provider signs the statement on the form, that information is requested on the form.)
You may submit claims as often as you like. If you pay your provider in advance, such as paying a daycare provider on the first of the month for that month's daycare, you may prefer to submit your claims every week or two rather than waiting until the end of the month. (Make extra copies of your original statement if you plan to submit claims more frequently.) You can also break down your monthly payment into weekly or biweekly service periods, and pro-rate the expense on your claim form.
Mail: Mail claim forms to:
Application Software Inc.
P.O. Box 6044
Columbia, MO 65205-6044
Fax: Fax claim forms and supporting documentation to ASIFlex at (877) 879-9038.
Online: at ca.asiflex.com, using your Flex PIN. Your PIN is a randomly assigned alphanumeric identifier that will be included with your first quarterly account statement. If you do not have access to your PIN, contact ASIFlex's customer service center at (800) 659-3035 for assistance.
Your Mobile Device: Download the app at ca.asiflex.com, and view the "how-to" video.
Once your claim form is processed, a tax-free reimbursement check is mailed to your home or deposited into your checking or savings account.
The address the SCO has on file for you is the address where your check is mailed. For that reason, it's important that you verify with your personnel office that the SCO has your correct address on file. If the address is incorrect, or you move while enrolled, you need to complete an Employee Action Request (STD. 686) so the SCO can update its records. This form is available from your personnel office.
If your claim is rejected (partially or in full), ASIFlex will send you a rejection letter (letters are mailed daily). If your claim is received during the run-out Period (January through June of the following plan year), and additional documentation is required, you have 15 calendar days from the date listed on the rejection letter to resubmit. You should include the rejection letter along with the documentation being resubmitted.
Additional claim forms (CalHR Form 351) are available at www.calhr.ca.gov or ca.asiflex.com. If you have questions about how to fill out the form, what documentation to attach, or the status of a claim you already have submitted, call ASIFlex at 1-800-659-3035 or e-mail ASIFlex through their website at ca.asiflex.com. ASIFlex also has a 24-hour InfoLine at 1-800-366-4827.
General account information is available on the ASIFlex website at ca.asiflex.com using your PIN. Your PIN is a randomly assigned alpha numeric identifier that was included with your quarterly account statements. If you do not have access to your PIN, please contact ASIFlex's customer service center at 1-800-659-3035 for additional assistance.
Reimbursement Account claims are 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 your account and the service period has passed.
The minimum reimbursement amount that will be paid from your account is $10. If you submit a claim for less than $10, the payment will be held until your total reimbursement claims equal $10 or more. If you have less than $10 in your account, ASIFlex will run a report twice a year, in June and December, to identify and pay these claims.
If you're appointed to a permanent position with a time base of half-time or more, the appointment makes you newly eligible for a reimbursement account. If you want
to enroll in a Medical and/or Dependent Care Reimbursement Account, you must complete a STD. 701R within 60 days after the date of your appointment. Conversely, if you change from permanent status to PI, you lose eligibility for the reimbursement account, unless you choose to continue your deductions through COBRA (Medical Reimbursement Accounts only).
The IRS Revenue Notice 2005-42 was approved in May, 2005. This notice permits a grace period of 2 months and 15 days immediately following the end of each plan year during which unused contributions into either your medical or dependent care flexible spending account (FSA) may be reimbursed for qualified expenses incurred during the grace period.
This means, for example, since our FSA plan year ends on December 31, 2020, you may incur qualified expenses up to March 15, 2021, and use any unspent funds from your 2020 plan year account.
The grace period should not be confused with the run-out period which is the period during which you may submit claims for reimbursement out of your prior plan year's accounts. The State of California's run-out period ends on June 30. This means that you will have until June 30 to submit claims for reimbursement for expenses in the prior plan year.
The IRS Revenue Notice allows you to incur qualified medical or dependent care expenses for the current plan year until March 15 of the following year, and to be reimbursed with unspent funds from your prior plan year account. For example, if on January 1 you have $200 left in your prior plan year account, you can incur medical or dependent care expenses up until March 15 which will be paid until your prior plan year's account has been exhausted.
A grace period is the two months and fifteen days immediately following the end of the plan year, in which you or your qualified dependent(s) can incur qualified expenses and use any unspent funds from prior plan year account funds. The grace period is January 1 through March 15.
A run-out period is the period of time in which a participant has to submit claims for reimbursement out of the prior plan year's account. Our run-out period is January 1 through June 30.
Claims will be paid in the order in which they are received. If you have an account balance in your prior plan year's account, and a claim is submitted with a date of service during the grace period, the expense will automatically be paid from your prior plan year's account. If a claim is submitted at a later date, with a date of service in the prior plan year, and all funds have been paid from your prior plan year account, the claim will not be paid.
Claims will be paid in the order in which they are received. You may not request for a claim to be paid from a specific plan year. However, you can control the order in which you submit or file your claims. Always make sure that you file older claims first to ensure that funds are paid from the previous plan year first.
You should continue to use only twelve months of expenses for calculating expenses for our FSA's. The new Revenue Ruling is intended to provide a safety net for you only if you have not incurred all of your anticipated expenses during the previous plan year.
If a reimbursement request is not submitted by the June 30 deadline, funds will be forfeited.