Eligibility

Who's eligible: Employees with Full, Mid-Level and Core benefits
Academic Student Employees and Graduate Student Researchers are eligible for DepCare FSA 

Who’s covered: You and your family members

Who pays: You

You set aside money for your flexible spending account (FSA) from your paycheck before taxes are taken out. The Dependent Care (DepCare) FSA is intended for eligible caregiving expenses for your child (up to age 13) or eligible adult dependent.

WEX Health is the administrator for the FSA plans.

New for 2024

Most participants may contribute up to $5,000 per year. To comply with IRS non-discrimination regulations, the maximum amount a highly-compensated employee, defined by the IRS as those earning $150,000 or more in 2023, may contribute to the DepCare FSA in 2024 will be limited to $3,000.

How to enroll

If you're eligible, you can enroll for the FSA for 2024 during UC's Open Enrollment, from Thursday, Oct. 26 through Friday, Nov. 17, 2023. Unlike many other benefits, you must re-enroll each year to continue participating in your FSA.

If you are a new employee, a newly-eligible employee or you experienced a qualifying life event, see instructions for enrolling for the DepCare FSA for the 2023 plan year.

About the DepCare FSA

Because FSA plans offer tax benefits, they are highly regulated by the Internal Revenue Service (IRS). This includes a requirement, called non-discrimination testing, to confirm that the DepCare FSA plan does not favor highly-compensated employees (HCEs; defined by the IRS as those earning $135,000 or more in 2022) and is providing comparable benefits to all participants. If you elect a contribution that exceeds the maximum allowed by the IRS, you will be notified and your payroll deduction will be adjusted to reflect the new contribution amount.

See below for more information for highly compensated employees.

2023 participants: If you earn $135,000 or more in 2022 and choose to participate in DepCare FSA in 2023, your maximum allowed election will be $3,000. If you are determined to be a highly compensated employee and the contribution you elected for 2023 exceeds $3,000, you will be notified by mail and your payroll deduction and WEX DepCare account will be updated. You may log in to your WEX account at uc-fsa.com to check your DepCare FSA balance.

2022 participants: Based on recent non-discrimination testing results for UC’s plan, the 2022 DepCare FSA benefit of HCE's was capped at an annual maximum of $3,000 in order to comply with IRS regulations. As necessary, HCEs’ DepCare deductions will be stopped or reduced. HCEs who have already had more than $3,000 deducted this year may receive a refund, less any amount over the maximum WEX has reimbursed for claims. Contributions over $3,000 will be considered taxable income and HCEs will be assessed payroll taxes and federal and state income taxes on the amount of any refund and amounts over $3,000 reimbursed through claims. These adjustments will be reflected in biweekly pay issued on Oct. 26, 2022, and monthly pay issued on Nov. 1, 2022.

2021 participants: As communicated earlier this year, the 2021 DepCare FSA benefits of HCEs were reduced to comply with IRS non-discrimination requirements. As a result, 2021 excess contributions were treated as after-tax income in 2022 and were subject to payroll and income taxes. Due to a system error, the applicable payroll and federal and state income taxes on excess contributions were not withheld from pay as scheduled in April. To resolve this error, the applicable taxes will be retroactively withheld from biweekly pay issued on Oct. 26, 2022, and monthly pay issued on Nov. 1, 2022.

When you enroll in the DepCare FSA, you determine how much you want deducted from your pay, from a minimum of $180 per year ($15 per month) to the least of:

  • Employees who earned under $135,000 in 2022: $5,000 per plan year ($2,500 if you are married and filing a separate income tax return);
  • Employees who earned $135,000 or over in 2022: $3,000 per plan year;
  • Your total earned income; or
  • Your spouse’s total earned income. (You may not contribute to the DepCare FSA if your spouse’s earned income is $0 and your spouse is capable of self-care or is not a full-time student.)

If your spouse is also eligible to participate in a dependent care FSA, your combined contributions should not exceed the maximums stated above. Remember that you forfeit any money you don't use; so calculate your contributions carefully.

Grace periods and deadlines for submitting claims

There is no carryover feature in the DepCare FSA. However, the plan has a grace period, which means that unused funds contributed in one plan year can be used for the reimbursement of claims incurred through the grace period of the following year (as long as your account was active by December 31 of the plan year). 

  • 2023 DepCare FSA participants: Grace period through March 15, 2024; submit claims by April 15, 2024
  • 2022 DepCare FSA participants: Grace period through March 15, 2023; submit claims by April 15, 2023
  • 2021 DepCare FSA participants: Grace period extended to Dec. 31, 2022; submit claims by Jan. 31, 2023

 

  • You must enroll annually, usually during a period of eligibility or during Open Enrollment, to participate. 
  • You specify an amount to be taken from your paycheck each month and deposited in your Dependent Care FSA.
  • Use the debit card issued by WEX Health to pay for eligible expenses. In many cases, you won't be required to submit additional documentation to substantiate the expense.
  • If you pay eligible expenses out of pocket, submit a claim form and appropriate documentation of these expenses to WEX Health. WEX Health will then reimburse you from the funds in the appropriate account. Generally, you must submit claims by April 15 of the following year to receive reimbursement. 
  • Because the FSA contributions are deducted from your paycheck before taxes are withheld, your taxable income is reduced, and you save money on taxes. Your savings will depend on your particular tax situation.
  • Generally, FSA contributions cannot be changed during the year unless you experience a qualifying event. The IRS defines qualifying events and allowed changes.