[UCRDBR] DepCare Plan - 2024 Change to Pre-Taxable Contributions

[Departmental Benefits Representatives]

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August 16, 2024

To:
Department Benefits Representatives (DBRs)
From:
Central HR Benefits Office on behalf of UC Office of the President
Re:
DepCare FSA Plan 2024 Change to Pre-Taxable Contributions

DBRs, please share this information via your internal listserv. Do not reply to this email.  Please send a separate email with questions to benefits at ucr.edu<mailto:benefits at ucr.edu>.

This is to inform you that certain participants in the Dependent Care (DepCare) Flexible Spending Account (FSA) will receive communications today Friday, August 16, 2024, regarding their contributions to the plan.

DepCare FSA plans are highly regulated by the Internal Revenue Service (IRS) to ensure that the tax benefits offered are equitable to all participants. This includes non-discrimination testing requirements to confirm the DepCare FSA plan does not favor highly-compensated employees (HCEs - defined by the IRS as those earning $150,000.00 or more in 2023) and is providing comparable benefits to all participants.

2024 plan year contribution adjustments

Based on recent non-discrimination testing results for UC's plan, HCEs must have their 2024 DepCare FSA benefit capped at an annual maximum of $2,500.00 to comply with Internal Revenue Service regulations. The results of non-discrimination testing vary based on plan enrollment, so while we make every effort to estimate the maximum allowable contribution in advance, the composition of the enrolled population can change during the plan year, which can result in UC needing to adjust the maximum annual contribution to pass required non-discrimination tests.

As necessary, HCEs' DepCare deductions will be reduced beginning with the August 28, 2024, paycheck for biweekly-paid employees and the August 30, 2024, paycheck for monthly-paid employees.

Communications

The DepCare FSA Contributions<https://hr.ucr.edu/sites/default/files/2024-08/ucpath-notice-depcare-reminder-2024.pdf> notice will be mailed and emailed to affected employees on Friday, August 16, 2024.

Affected employees may contact the UCPath Center with questions. The communication lists the UCPath phone system and case initiation paths that should be used to help ensure a timely response to inquiries. Do not refer employees to Health & Welfare Benefits staff. UCPath will escalate cases to Health & Welfare Benefits if necessary.

Looking ahead

Please note that for employees earning $155,000.00 or more in 2024 who choose to participate in DepCare FSA in 2025, the maximum allowed election will be $2,500.00.  This information will be included in the UCPath Open Enrollment portal, ALEX, and other OE communications.

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