Plan Year 2017 FSA Question and Answer Sheet

This chart will give you basic information on the Health Care Flexible Spending Account (HCFSA) Program, Dependent Care Assistance 
Program (DeCAP) and the Medical Spending Conversion (MSC) Health Benefits Buy-Out Waiver Program. If you would like to receive 
detailed information and enrollment forms, or if you would like to send an e-mail to the Flexible Spending Accounts (FSA) Program, please 
visit our website. If you would like to make an appointment to see a counselor, please contact the FSA Program Administrative Office.

Feature

HCFSA 

DeCAP 

MSC 

What is the 
program about?

HCFSA is a way to pay for 
eligible medical expenses (not 
covered by insurance), dental, 
vision, and hearing expenses 
(not covered by the Welfare 
Fund) with before-tax dollars.

DeCAP is a way to pay for 
expenses to care for your 
child(ren) or other dependents, 
with before-tax dollars, while 
you and your spouse work or 
attend school full-time.

MSC allows City employees 
to receive an annual incentive 
payment in exchange for 
waiving their City health benefits 
when other non-City group 
coverage is available to them.

When and how 
can I enroll?

Each year, the Open Enrollment 
Period for the following calendar 
year will generally be held from 
September to November. New 
employees may enroll within 
30 days after becoming eligible 
to receive City health benefits. 
Employees must complete the 
FSA Enrollment Form on an 
annual basis.

Same as HCFSA.

Same as HCFSA except 
employees must complete the 
Health Benefits Application 
to waive City health benefits 
and the MSC Enrollment/
Change Form to receive the 
incentive payments. Annual re-
enrollment is not necessary for 
continuing participation in the 
program.

How can I benefit 
by joining the 
program?

MSC Buy-Out 
Waiver 

Incentive Payment 

Amount in 

2017

You plan for anticipated 
expenses but also reduce your 
gross salary for federal and 
Social Security tax purposes. 
The end result is that your 
expenses are lower and you 
save on taxes.

Same as HCFSA.

Employees waiving family 
health coverage will receive 
$1,000 annually and employees 
waiving individual health 
coverage will receive $500 
annually. Payments are made 
semi-annually in June and 
December and will be taxable 
to the recipient. No retroactive 
participation is allowed.

How do the 
programs work?

1. Estimate your pre-tax 
contribution to your account 
for the Plan Year,

2. Your account is funded 
through automatic payroll 
deductions,

3. Reimbursement is directly 
deposited into your bank 
account after you submit a 
claim or you may choose to 
have reimbursement checks 
sent to your address on file.

Same as HCFSA.

Once you have completed 
both the MSC Form and Health 
Benefits Application, you must 
submit both forms to your 
benefits office for approval. 
Your benefits office will forward 
the forms to the FSA office and 
you will receive the incentive 
payments on a semi-annual 
basis in your regular paycheck.

What is the Grace 
Period?

There is a Grace Period 
following the end of the Plan 
Year to submit claims for 
services incurred from January 
1st through March 15th, using 
the remaining balance from the 
previous Plan Year (if any).

There is no Grace Period.

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Feature

HCFSA 

DeCAP 

MSC 

What is the Claims 
Run-Out Period?

There is a Claims Run-Out 
Period from January 1st until 
May 31st following the end of 
the Plan Year to submit claims 
for services performed during 
the previous Plan Year or Grace 
Period.

There is a Claims Run-Out 
Period until the end of February 
following the close of the 
Plan Year to submit claims for 
services performed during the 
previous Plan Year.

N/A

What is the “Use It 
or Lose It” rule?

According to IRS rules, amounts 
not used by the end of the 
HCFSA Grace Period will be 
forfeited.

Amounts not used by the end of 
the Plan Year will be forfeited.

N/A

Who can be 
covered or who is 
eligible?

You, your spouse, and your 
eligible dependents.

Eligible dependents are child(ren) 
under age 13 and any dependent 
who is mentally or physically 
incapable of caring for himself/
herself and spends at least half 
of the year in your home.

Any employee who is eligible 
to receive City health benefits 
may participate. Employees may 
waive their health benefits if they 
are insured through a spouse’s/
domestic partner’s or parent(s)’ 
employer-provided, non-City 
group health plan or a group 
health plan available through 
other employment. 

What types 
of expenses 
are covered & 
reimbursable? 

Medical, dental, vision & hearing 
expenses, including deductibles, 
co-insurance, over-the-counter 
drugs prescribed by a doctor, 
physicals, psychologist’s fees, 
braces, prescription drugs, 
prescription eyeglasses, frames, 
contact lenses, among other 
out-of-pocket eligible health care 
expenses. 

Baby-sitting, nursery school, 
pre-school, summer day camp, 
before-and after-school care, 
child care centers that provide 
day care and other dependent 
care that is necessary for you 
and your spouse to work or attend 
school full-time. 

N/A

What is the 
definition of 
medical care?

Medical care means expenses to 
diagnose, cure, mitigate, treat or 
prevent disease or to affect any 
structure or function of the body.

N/A

N/A

How much can 
I put aside in 
my spending 
accounts?

The minimum annual contribution 
is $260 and the maximum annual

contribution is $2,550.

The minimum annual contribution 
is $500 and the maximum annual 
contribution is $5,000.

N/A

The Open Enrollment Period is: September 19, 2016 through October 31, 2016.






New York City

Flexible Spending Accounts Program

Bowling Green Station 

P.O. Box 707

New York, NY 10274

212-306-7760 - TTY 212-306-7629

nyc.gov/fsa

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