[UCRDBR] DepCare - FSA Plan: 2024 Pre-Taxable Contributions Change for highly-compensated employees

[Departmental Benefits Representatives]

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March 4, 2024
To:
Department Benefits Representatives
From:
Central HR Benefits Office on behalf of the UC Office of the President
Re:
DepCare - FSA Plan: 2024 Pre-Taxable Contributions Change for highly-compensated employees

DBRs, please share this information via your internal listserv.

UC Office of the President was informed of certain participants in the Dependent Care FSA (DepCare) who will receive communications this week regarding contributions to the plan.

DepCare Flexible Spending Account (FSA) plans are highly regulated by the Internal Revenue Service (IRS) to ensure the tax benefits offered are equitable to all participants. This includes a requirement for non-discrimination testing to confirm the DepCare FSA plan does not favor highly-compensated employees (defined by the IRS as those earning $150,000 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 the University of California's plan, highly-compensated employees must have the 2024 DepCare FSA benefit capped at an annual maximum of $3,000 in order to comply with IRS regulations.  If necessary, DepCare deductions for highly-compensated employees will be reduced beginning with the March 13, 2024 paycheck for bi-weekly paid employees and the April 1, 2024 paycheck for monthly-paid employees.

Communications



Targeted emails will be sent to affected employees.  Additionally, UCPath will send a copy of the letter via U.S. mail.


Affected employees may contact the UCPath Center with questions. Please use the UCPath phone system and case initiation paths<https://hr.ucr.edu/document/ucpath-notice-depcare-reminder-2024> to help ensure a timely response to inquiries.
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