FSA is comprised of two assistance plans - the Medical Care Assistance Plan (MCAP) and the Dependent Care Assistance Plan (DCAP). Through these plans, you can pay for out-of-pocket medical expenses and/or work-related dependent care expenses during the plan year with tax-free dollars.
Taking advantage of this program provides tax benefits for you and allows for greater disposable income.
Once an enrollment form is received and processed by CMS, you will receive an FSA welcome packet. The packet contains enrollment verification, personalized claims forms, and important participation information. Packets should be reviewed carefully.
1. You designate an amount of money to be deducted from your paycheck
2. That money is deposited into your personal MCAP and/or DCAP account before any taxes are withheld.
3. The amount deducted from your paycheck is not reported on your W-2 as taxable income.
Central Management Services (CMS) provides the following information:
MCAP no longer has a Grace Period, but will have a New Rollover Feature.
Participant MCAP accounts no longer have a grace period for which to use remaining MCAP funds. The grace period was the additional 75-day period after the end of the plan year (i.e., September 15th) that allowed MCAP participants to incur expenses and utilize their remaining MCAP funds. For the current plan year FY15, participants will only be reimbursed eligible expenses incurred through June 30th. Claims for reimbursement of remaining FY15 MCAP funds may be submitted through the end of the run-out period, September 30, 2015, but expenses must have been incurred by June 30, 2015.
Eligible MCAP participants (you must still be an active employee on July 1, 2015) who have a balance remaining in their MCAP account after September 30th will have up to $500 of that account balance automatically rolled over to the FY16 plan year. The rollover funds will be available on or about October 7, 2015. Any additional unused amounts above $500 remaining in the account after the run-out period ends will be forfeited.
Note: This rollover will occur and be available for use even if the employee does not re-enroll for the FY16 plan year. However, if the employee does not re-enroll, the debit card will not be active and claims will need to be filed through the website, paper or mobile app. In the event the employee is a dependent of an individual with an HSA, any amount rolled over must be waived in order to be in compliance with IRS rules.
Please also read the MCAP Rollover FAQ's