1407 - FlexElect (Historical View)

Status: Active

Change Notes

Resource updated: Updated handbook

Category

Benefits and Insurance

Audience List

• Personnel Officers
• Personnel Transactions Staff
• Personnel Transactions Supervisors

Synopsis

This policy:

• Provides information on the state-administered FlexElect and FlexElect Cash Option programs.
• Clarifies eligibility and enrollment procedures for FlexElect and Cash Option programs.
• Provides general information on the annual Open Enrollment period.

Introduction

The California Department of Human Resources (CalHR) administers the state’s FlexElect Program.  There are two types of benefits presented under the FlexElect Program: Reimbursement Accounts and Cash Option program.

Statement

FlexElect Reimbursement Accounts

Eligibility

An employee is eligible if they have a permanent position that is half-time or greater, or a Limited-Term (LT) or Temporary Authorization (TAU) appointment with a mandatory right of return to a permanent position that is half-time or greater. Permanent-Intermittent (PI) employees are not eligible.

Reimbursement Accounts

FlexElect Reimbusement Accounts allow state employees to establish FlexElect deductions to set aside money from their pay warrant to pay for certain out-of-pocket expenses. The FlexElect deductions are pre-tax, allowing participating employees to reduce their taxable income. There are two types of accounts:  a “Medical Account” and a “Dependent Care Account.”

• Medical Reimbursement Account (MRA)-Covers eligible health-related expenses for employees and their dependents.
• Dependent Care Reimbursement Account (DCRA)-Covers eligible dependent care expenses.

Tax Advantages

FlexElect funds and reimbursement payments are not taxable. This allows employees to reduce their monthly taxable income when they enroll in a FlexElect account.  For dependent care expenses, there may be tax advantages by claiming these expenses as a credit on tax returns.  Employees should consult with a tax professional on expenses that may be claimed as a credit on their tax returns.

Open Enrollment

Employees enrolled in the MRA and/or the DCRA must reenroll in the reimbursement accounts during the annual Open Enrollment period which is traditionally held during the fall.

FlexElect Cash Option

Eligibility

Rank-and-file employees in Bargaining Units 1, 3, 4, 5, 6, 9, 10, 11, 12, 13, 14, 15, 20, and 21 who are eligible for health benefits are eligible to enroll in the FlexElect Cash Option program.

Special eligibility rules apply to PI, LT, and TAU appointments:

• PI employees have limited eligibility (refer to Benefits Administration Manual (BAM) section 700 on CalHR’s website).
• LT or TAU appointments of more than six months must have a mandatory right of return to a permanent position (excluding PI employees).

Cash Option

Employees who attest that they have qualifying group health and/or dental coverage  through a spouse, domestic partner, parent, or another source have the option to receive cash in lieu of state-sponsored health and/or dental benefits.  Qualifying group health coverage includes health coverage that provides minimum value as established by the federal Patient Protection Affordable Care Act (ACA) and is maintained by an employer or employee organization.  All state California Public Employees’ Retirement (CalPERS) health plans currently meet the law’s minimum value standard.

Employees enrolled in individual coverage such as, but not limited to, TRICARE, Medicare, Medi-Cal, and Covered California, are not eligible to receive cash in lieu of state-sponsored health benefits even if the coverage provides minimum value.

The Cash Option benefit is determined through collective bargaining.  For current Cash Option payment amounts, refer to the appropriate Memorandum of Understanding (MOU) or the BAM section 700 on CalHR’s website.

Open Enrollment

The annual Open Enrollment period is traditionally held during the fall and allows employees to enroll in the Cash Option program, change, or cancel their enrollment.

Application

Authorities

• Affordable Care Act

Resources

FAQs

• Dependent Health Care Vesting: Frequently Asked Questions

PML

• PML 1988-101: PML 1988-101 - 11/22/1988 - Dependent Care Reimbursement Accounts
• PML 1992-007: Revised 1992 FlexElect Permitting Event Code Chart
• PML 1993-005: 1993 FlexElect Permitting Event Code Change
• PML 2015-018: PML 2015-018 - 6/26/2015 - Clarification of Eligibility Criteria for FlexElect and Consolidated Benefits (CoBen) Cash Option Programs
• PML 2015-024: PML 2015-024 - 9/11/2015 - 2015 Open Enrollment Period; 2016 Dental and Vision Plan Premiums; Consolidated Benefits (CoBen) and Employer Health Benefit Contributions
• PML 2016-022: PML 2016-022 - 9/12/2016 - 2016 Open Enrollment Period, 2017 Dental and Vision Plan Premiums, Consolidated Benefits, and Employer Health Benefit Contributions

Related Policies

• 1401: Health Benefits
• 1403: Dental
• 1404: Vision
• 1406: Consolidated Benefits (CoBen)

Web Pages

• BAM section 700 : FlexElect Program (enrollment forms, processing instructions)
• FlexElect Handbook: FlexElect Handbook
• Open Enrollment Toolkit: Information and resources to assist HR Professionals in completing open enrollment forms.

Authorized By

Contact Person

Becky Bayliss
Program Manager, , Benefits Division
Phone: 916-327-6429
Fax: 916-322-3769
Email: becky.bayliss@calhr.ca.gov

Superseded Policies