Flexible Spending Accounts

The City of Boston offers employees the option of enrolling in Flexible Spending Accounts. This program allows employees the ability to have money withheld from their pay check on a pre-tax basis to pay for dependent care expenses, out of pocket medical/dental expenses and work related transportation expenses. The City currently contracts with Cafeteria Plan Advisors, Incorporated (CPA, Inc.).

There are four separate accounts employees can enroll in:  Dependent Care, Medical/Dental, Transportation – Parking and Transportation - Transit. These are all separate accounts and cannot be combined however you may enroll in all four simultaneously. 

1. Dependent Care Account

Can be used to pay for day care for children under the age of 13 or for parents who require elder care.  Examples include, day care, before school care, after school care and summer day camp programs.  In most instances, participation in the Dependent Care Account results in greater tax savings than the Dependent Child tax credit (please consult with your tax advisor to determine which is best for you.)  Please contact CPA, Inc. directly to determine eligible Elder Care Expenses. Employees may elect up to $5,000 per plan year.

2. Medical/Dental Account

Can be used to pay for out-of-pocket medical/dental expenses not covered by insurance.  Examples include: co-payments for office visits and prescription drugs, Orthodontia and other dental expenses, contact lenses, eye glasses, laser eye surgery, visits for chiropractic care and acupuncture. Over-the-counter items may be considered eligible expenses with a doctor’s prescription. See the attachment below “Eligible Expenses List.” Employees may elect up to $2,500 per plan year (effective January 1, 2013).

Employees who enroll in the Medical Savings Account will receive a debit card to use when paying for eligible services/expenses. The debit card will contain the full elected dollar amount available for use on the first day of the plan year.  Using the debit card is extremely convenient and will eliminate the need to submit receipts for most eligible services/expenses. However, employees may continue to pay for eligible services/expenses and submit forms and receipts to the administrator for reimbursement.

Please do not throw away your debit card when you have used up your funds for the year. If you re-enroll in the Flexible Spending Medica/Dental Account in future years, the same card will be reloaded with your new elected amount for that plan year.

3. Transportation – Parking Account

Can be used to pay for parking near the workplace; up to a maximum of $250 per month. This account can only be used for employee workplace parking expenses. 

4. Transportation - Transit Account

Can be used for public transit for commuting to work; up to a max $130 per month (cannot be combined with the City of Boston MBTA Pass Program). This account can only be used for expenses related to the employee commuting to the workplace. 

Administrative Fee

There is a small administrative fee to participate in the plan. The administrative fee is $48 per plan year no matter how many of the accounts you sign up for.

Please be aware of the following:
  • Once you enroll in the Flexible Spending Program, you cannot increase or decrease your elected amount unless you have a qualifying life event such as marriage or birth of a child during the plan year.  In this case, you must notify CPA, Inc. within 30 days of the date of the qualifying event. 

  • Funds withheld for the Transportation Parking and Transit Accounts can carry over into the next plan year. 

  • Funds withheld for the Dependent Care and Medical Accounts must be used by the end of the plan year, December 31st.  However, there is a new 75 day grace period which can be used in order to be reimbursed for Medical/Dental expenses incurred after the end of the plan year.  This extends the deadline to March 15th. 

  • ***Employees should make every effort to meet these deadlines.  If you don’t use your money by the end of the plan year, your money will be forfeited.*** 

Enrollment

You can enroll in the Flexible Spending Program during the fall open enrollment period (Oct/Nov). The plan year runs from January 1st through December 31st. If you have a qualifying event such as marriage or birth/adoption of a child, you may be able to enroll during the plan year.  You must notify CPA, Inc. within 30 days of the date of the qualifying event.