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<h1><span style="font-size:11.0pt;line-height:105%;font-family:"Arial",sans-serif"><img width="192" height="73" id="_x0000_i1025" src="cid:image001.png@01D947A4.9D170340"></span><span style="font-size:11.0pt;line-height:105%;font-family:"Arial",sans-serif"><o:p></o:p></span></h1>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"> <o:p></o:p></span></p>
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse">
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">February 23, 2023<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"> <o:p></o:p></span></p>
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<td width="66" valign="top" style="width:49.5pt;padding:0in 5.4pt 0in 5.4pt">
<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<span style="font-family:"Arial",sans-serif">To:<o:p></o:p></span></p>
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<td width="558" valign="top" style="width:418.5pt;padding:0in 0in 0in 0in">
<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<span style="font-family:"Arial",sans-serif">Department Benefits Representatives<o:p></o:p></span></p>
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<td width="66" valign="top" style="width:49.5pt;padding:0in 5.4pt 0in 5.4pt">
<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<span style="font-family:"Arial",sans-serif">From:<o:p></o:p></span></p>
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<td width="558" valign="top" style="width:418.5pt;padding:0in 0in 0in 0in">
<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<span style="font-family:"Arial",sans-serif">Central HR Benefits Office on behalf of the UC Office of the President<o:p></o:p></span></p>
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<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<span style="font-family:"Arial",sans-serif">Re:<o:p></o:p></span></p>
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<p class="MsoNormal" style="mso-margin-top-alt:6.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:-.7pt;text-align:justify;line-height:110%">
<b><span style="font-family:"Arial",sans-serif">DepCare FSA Election Reduction for Highly Compensated Members</span></b><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="xdefault"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:windowtext">_________________________________________________________________________<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif">Employees who elect to participate in the DepCare Flexible Spending Account (FSA) and who are defined by the IRS as “highly-compensated employees”
(“HCEs” – those who earned $135,000 or more in 2022), must have their annual contributions limited in order for UC to satisfy the IRS’ non-discrimination requirements for the plan. For 2023, UC determined that the annual maximum election amount for HCEs is
$3,000. The limit was noted in the UCPath Open Enrollment portal; however, some HCEs elected more than the allowed amount.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif">Communications have been sent to employees who:<o:p></o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoListParagraph" style="margin-left:38.25pt;text-indent:-.25in;mso-list:l2 level1 lfo4">
<![if !supportLists]><span style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:"Arial",sans-serif">Are participating in the DepCare FSA in 2023, and<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:38.25pt;text-indent:-.25in;mso-list:l2 level1 lfo4">
<![if !supportLists]><span style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:"Arial",sans-serif">Meet the IRS’ definition of “highly-compensated employee,” and<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:38.25pt;text-indent:-.25in;mso-list:l2 level1 lfo4">
<![if !supportLists]><span style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:"Arial",sans-serif">Elected to contribute more than $3,000 to their DepCare FSA this year, and<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:38.25pt;text-indent:-.25in;mso-list:l2 level1 lfo4">
<![if !supportLists]><span style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:"Arial",sans-serif">Must have their annual contribution reduced to $3,000 in order for UC to satisfy IRS non-discrimination requirements<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif">Note that in the case of spouses both employed by UC, the reduction in the HCE’s election does not create a qualifying event for the spouse of the
HCE to enroll in DepCare FSA or change their election amount.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:11.0pt;font-family:"Arial",sans-serif">The communications explain the
<b><a href="https://hr.ucr.edu/sites/default/files/2023-02/2023_depcare_hce_irs_ruling.pdf">IRS’ mandatory non-discrimination testing requirement</a></b><span style="color:#1F4E79">
</span>and remind participants that the<b><span style="color:#1F4E79"> </span><a href="https://hr.ucr.edu/sites/default/files/2023-02/depcare_contribution_adjustments.pdf">University reserves the right to reduce contributions to the plan HCEs</a><span style="color:#1F4E79">
</span></b>during the plan year in order to comply with IRS regulations. The communications were postal-mailed on February 16, 2023 and email communications sent on February 21, 2023. Affected participants’ election amounts are being adjusted in the UCPath
Center system, and corrected amounts will be sent to WEX. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif">For questions, impacted members may contact the UCPath Center at 855.982.7284 Monday – Friday, 8:00 a.m. to 5:00 p.m.</span><span style="font-size:11.0pt;font-family:"Georgia",serif;color:#1F4E79"><o:p></o:p></span></p>
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