Flexible Spending Arrangements and Dependent Care Assistance Program

What is a Flexible Spending Arrangement or Dependent Care Assistance Program?

The PEBB Program's Flexible Spending Arrangement (FSA), Limited Purpose FSA (LPFSA), and Dependent Care Assistance Program (DCAP) allow eligible employees to set aside money from their paychecks on a pretax basis to pay for qualified expenses each plan year (January 1-December 31). Eligible employees who waive their PEBB medical coverage can still enroll in an FSA, Limited Purpose FSA and/or DCAP.

For a summary of these benefits, including the $250 Medical FSA CBA contribution for represented employees, IRS maximum contributions, carryover amounts, and deadlines to submit claims and incur expenses, click on each item below.

Flexible Spending Arrangement

What is an FSA?

The FSA (formerly known as Medicare Flexible Spending Arrangement) allows employees to set aside pretax money to spend on eligible out-of-pocket medical expenses, including annual deductibles, copays, coinsurance, dental expenses and vision expenses.

Employees may use FSA funds for themselves and their qualified dependents, even if their dependents are not enrolled in a PEBB medical, dental or vision plan.

Can an employee have an FSA or LPFSA with an HSA in the same plan year?

Employees cannot have both an FSA and a consumer-directed health plan (CDHP) with a health savings account (HSA) or both an FSA and a LPFSA in the same plan year. Employees can have a LPFSA and HSA in the same plan year.

How much can employees contribute?

The employee decides how much to contribute to their FSA. They may set aside a minimum annual contribution of $120 up to a maximum annual contribution of $3,050 for the 2024 plan year. The maximum annual contribution is $3,200 for the 2025 plan year.

The amount deducted from an employee's pay is the total annual election amount divided by the number of paychecks the employee will receive during the plan year.

The full amount elected is available on the first day of the month the employee's benefits become effective.

• For example: An employee elects to contribute an annual amount of $1,500. After two months of contributions, the employee incurs an eligible expense of $2,000. Even though the employee has not yet contributed the full amount, they can be reimbursed for $1,500.

Why is the IRS maximum contribution limit different from what HCA adopts?

The maximum contribution limit is set by the IRS, and the amount is usually announced in late fall after HCA's annual open enrollment begins. Due to the timing of the IRS announcement, HCA adopts the increased maximum contribution limit for the following plan year.

What is carryover?

If all the funds in an FSA have not been spent by December 31, and the employee is still eligible to participate, they may be able to take advantage of the carryover feature.

Carryover means certain unspent funds may "carry over" into the following year without affecting annual maximums.

To receive carryover, employees must enroll in a Medical FSA for the following plan year or have at least $120 left in their current year's balance.

• Unused funds from the 2024 play year (up to $640) will carry over to 2025 but any amount above $640 will be forfeited.
• Unused funds from the 2025 play year (up to $660) will carry over to 2026 but any amount above $660 will be forfeited.

Note: The IRS does not announce the next plan year’s carryover limit until late fall of the previous year, after HCA's annual open enrollment begins. Due to the timing of the IRS announcement, HCA will update the new carryover limit amount at that time. The carryover limit will not decrease.

Find real-world carryover examples on the FSAs webpage for public employees.

What are the deadlines to incur expenses and submit claims?

All eligible FSA expenses must be incurred by the end of the plan year, December 31.

Employees must submit all claims to Navia Benefit Solutions for reimbursement by March 31 of the following plan year.

To learn more, see the FSA Enrollment Guide (2024) (2025) and visit the FSAs webpage for public employees.

$250 Medical FSA contribution for represented employees

Represented employees may receive a $250 Medical FSA benefit

The current collective bargaining agreement (CBA) states that represented employees whose rate of pay is $60,000 a year or less on November 1, 2023, are eligible to receive a $250 FSA contribution in January 2024.

For example, if the employee works part-time, they may still be eligible for this contribution if their position would provide a salary of $60,000 or less as full-time. If they earn $30,000 and work 20 hours per week, their full-time salary would be $60,000 and they would still qualify.

The employee or employee’s spouse or state registered domestic partner cannot be enrolled in a consumer-directed health plan with a health savings account and the employee must meet other eligibility criteria as described in the Health Care Coalition Agreement, including PEBB Program eligibility requirements and eligible medical plan enrollment.

Eligible employees receive this employer-paid benefit even if they do not enroll in an FSA. The contribution does not come out of the employee's paycheck.

• Navia will:
  • Open an FSA account with the $250 and mail a CBA FSA Welcome Letter and in a separate mailing, Navia will send a debit card to the employee if the employee does not have a currently active FSA debit card, or
  • Add the $250 to an employee's existing FSA debit card (expires after 3 years)

CDHP plan with an HSA and/or the Limited Purpose FSA

Employees enrolling in a CDHP plan with an HSA and/or the Limited Purpose FSA for the following plan year will not receive the $250 Medical FSA Contribution.

To learn more about the $250 CBA contribution for represented employees, see the following resources:

• Medical FSA CBA Contribution FAQ
• FSA Enrollment Guide (2024) (2025)
• Letter mailed to employees who may be eligible to receive the FSA CBA contribution.
• FSAs webpage for public employees

Limited Purpose Flexible Spending Arrangement

What is a Limited Purpose FSA?

The Limited Purpose FSA (LPFSA)allows employees to set aside pretax money to spend on eligible out-of-pocket dental and vision expenses.

The Limited Purpose FSA is intended for employees who are enrolled in a consumer directed health plan (CDHP) with a health savings account (HSA). Enrolling in a LPFSA while in a CDHP plan allows employees to save more of their HSA funds for medical expenses. However, employees can enroll in a LPFSA even if they are not enrolled in a CDHP with an HSA.

Employees may use LPFSA funds for themselves and their qualified dependents, even if their dependents are not enrolled in a PEBB medical, dental or vision plan.

Participating in FSAs

Employees may not participate in a Limited Purpose FSA and a Medical FSA in the same plan year. Employees can participate in a Limited Purpose FSA and a consumer directed health plan (CDHP) with a health savings account (HSA) in the same plan year. It is the employee’s responsibility to know which benefit to enroll in.

How much can employees contribute?

The employee decides how much to contribute to their Limited Purpose FSA. They may set aside a minimum annual contribution of $120 up to a maximum annual contribution of $3,050 for the 2024 plan year. The maximum annual contribution is $3,200 for the 2025 plan year.

The amount deducted from an employee's pay is the total annual election amount divided by the number of paychecks the employee will receive during the plan year.

The full amount elected is available on the first day of the month the employee's benefits become effective.

• For example: An employee elects to contribute an annual amount of $1,500. After two months of contributions, the employee incurs an eligible expense of $2,000. Even though the employee has not yet contributed the full amount, they can be reimbursed for $1,500.

Why is the IRS maximum contribution limit different from what HCA adopts?

The maximum contribution limit is set by the IRS, and the amount is usually announced in late fall after HCA's annual open enrollment begins. Due to the timing of the IRS announcement, HCA adopts the increased maximum contribution limit for the following plan year.

What is carryover?

If all the funds in a Limited Purpose FSA have not been spent by December 31, and the employee is still eligible to participate, they may be able to take advantage of the carryover feature.

Carryover means certain unspent funds may "carry over" into the following year without affecting annual maximums.

To receive carryover, employees must enroll in a Medical FSA for the following plan year or have at least $120 left in their current year's balance.

• Unused funds from the 2024 plan year (up to $640) will carry over to 2025, but any amount above $640 will be forfeited.
• Unused funds from the 2025 plan year (up to $660) will carry over to 2026, but any amount above $660 will be forfeited.

Note: The IRS does not announce the next plan year’s carryover limit until late Fall of the previous year, after HCA's annual open enrollment begins. Due to the timing of the IRS announcement, HCA will update the new carryover limit amount at that time. The carryover limit will not decrease.

Find real-world carryover examples on the FSAs webpage for public employees.

What are the deadlines to incur expenses and submit claims?

All eligible FSA expenses must be incurred by the end of the plan year, December 31.

Employees must submit all claims to Navia Benefit Solutions for reimbursement by March 31 of the following plan year.

To learn more, see the Limited Purpose FSA Enrollment Guide (2024) (2025) and visit the FSAs webpage for public employees.

Dependent Care Assistance Program

What is the DCAP?

DCAP is an employer-sponsored benefit that allows employees to set aside money from their paycheck on a pre-tax basis to help pay for qualified child care or elder care expenses while the employee or their spouse attend school full-time, work or look for work. The employee is responsible for providing documentation to the IRS for tax purposes, if requested. Eligible expenses include elder day care, baby sitting, child day care, preschool and registration fees.

Participating in the DCAP and an FSA

Employees may participate in a DCAP account and an FSA or a Limited Purpose FSA in the same plan year.

How much can employees contribute?

The employee decides how much to contribute to their DCAP account. They may set aside a minimum annual contribution of $120 up to a maximum annual contribution of:

• $5,000 for a single person or married couple filing a joint income tax return
• $2,500 for each married person filing separate income tax returns

DCAP funds are available once they have been deposited each month. Employees may only be reimbursed up to the dollar amount they have in their DCAP account at the time reimbursement is requested.

What are the deadlines to incur expenses and submit claims?

All eligible DCAP expenses must be incurred by the end of the plan year, December 31 (DCAP has no carryover feature).

Employees must submit all claims for their DCAP account to Navia Benefit Solutions for reimbursement by March 31 of the following year. Any funds remaining in the DCAP account after March 31 cannot be refunded and will be forfeited.

To learn more, see the DCAP Enrollment Guide (2024) (2025) and visit the DCAP webpage for public employees.

Who is eligible to participate?

Eligible employees of state agencies and higher education institutions, including community and technical colleges, and the State Board of Community and Technical Colleges are eligible to participate in the FSA, Limited Purpose FSA, and DCAP (WAC 182-12-116).

When can employees enroll or make changes?

Eligible employees may enroll in and FSA or DCAP or make changes by submitting forms to their payroll or benefits office during the following timeframes (WAC 182-08-199). Employees cannot end participation or change their election amount once the plan year starts unless they end employment, lose eligibility, or experience an event that creates a special open enrollment (SOE).

When newly eligible

Newly eligible employees must submit the PEBB Midyear Enrollment form no later than 31-days after becoming eligible for PEBB benefits.

Enrollment begins the first day of the month following the date the form is received by the payroll or benefits office. If that day is the first working day of the month, enrollment begins that day.

Employees whose benefits begin in the months of November or December

These employees should complete the Midyear Enrollment form to participate for the remaining months in the year and/or the Navia Open Enrollment form to begin participation January 1 of the following year.

During annual open enrollment

To enroll an FSA and/or DCAP for the following plan year, employees may use Navia's online portal or complete and submit the Navia Open Enrollment form no later than the last day of annual open enrollment (OE).

• Online enrollment and the OE form are only available during OE.
• Enrollment begins January 1 of the following year.

Employees must reenroll during annual open enrollment each year to continue participating for the following year. Enrollment does not automatically continue from plan year to plan year.

What if an employee elects both a CDHP plan with an HSA and a Medical FSA during annual OE?

Outreach & Training will notify BAs in mid-December if they have any employees who elected both a CDHP plan with an HSA and a Medical FSA during annual open enrollment. Employees will have the following options:

1. Keep the CDHP plan and disenroll from the FSA, or
2. Keep the FSA and disenroll from the CDHP plan, or
3. Keep the CDHP plan and switch to a Limited Purpose FSA and lower their election amount.

Employees have a one-time offer to choose one of the options above before December 31 and cannot make changes after the decision is received by HCA.

If the employee does not make a choice by December 31, they will remain enrolled in the CDHP plan with an HSA and will be disenrolled from the FSA. However, if they qualify for carryover of funds from the previous year, the funds will be transferred to a Limited Purpose FSA.

What if an employee elects both an FSA and a Limited Purpose FSA during annual OE?

Employees who are not enrolled in a CDHP plan with an HSA that elect both an FSA and a Limited Purpose FSA during annual OE will be enrolled in the FSA, but will not be enrolled in the LPFSA.

When a special open enrollment event occurs

Employees requesting to enroll or make a change due to a qualifying event that creates a special open enrollment (SOE) must complete and submit the PEBB Change in Status form and proof of the event no later than 60 days after the date of the event (PEBB SOE matrix - Policy 45-2A).

• The enrollment or change begins the first day of the month following the event date or the date the form is received by the payroll or benefits office, whichever is later. If that day is the first of the month, the enrollment or change begins that day.
  • Exception: If the SOE is due to birth or adoption, or assuming legal obligation, the enrollment or change will begin the first day of the month in which the event occurs.

What if the employee does not have an SOE and they are requesting a change?

If no SOE event has occurred, requests by an employee pertaining to eligibility and/or enrollment changes in a Flexible Spending Arrangement or Dependent Care Assistance Program must go through the employing agency for an initial decision. Requests that require a decision include if the employee can cancel their FSA and/or DCAP, decrease or increase their election amount, or make any other eligibility or enrollment changes to the FSA and/or DCAP.

Requests to make changes outside of OE or an SOE event should be denied by the employing agency, with guidance provided to the employee that they can appeal via the steps in WAC 182-16-2050.

• Changes outside of OE or an SOE would include when an employee enrolls in the wrong benefit (i.e. LPFSA instead of FSA), as well as enrolling in error and no longer wants/needs the benefit.

The rules regarding when an employee can enroll or revoke an election and make a new election under the premium payment plan, FSA, LPFSA or DCAP are located in WAC 182-08-199.

An employee who disagrees with an initial decision made by their employing agency can appeal that decision by following the steps outlined in WAC 182-16-2050.

If you have any questions about the appeals process, please contact HCA Appeals Unit at 1-800-351-6827. If you have further questions regarding your employee’s request, you may contact the PEBB Program by sending a secure message to Outreach & Training through HCA Support or call 1-800-700-1555.

UW and WSU employees

UW and WSU employees must enroll through Workday.

Transferring to another state agency or institution of higher education

Employees who enroll in an FSA or DCAP and later transfer to another state agency or higher-education institution, may continue their enrollment in an FSA or DCAP if:

• The employee will be benefits eligible in the new position, and
• There is no more than a 30-day gap between employments, and
• The employee submits the PEBB Agency Transfer form to the new employer no later than 31 days after the first day of work at the new employer.
  • Employers should set up payroll deductions before signing and submitting the form to Navia.

Learn more by reviewing the FSA and DCAP enrollment guides available on Navia's Forms and Documents webpage.

Loss of eligibility or ending employment

An employee is no longer eligible to participate in a DCAP account when they lose eligibility for the employer contribution toward PEBB benefits. There are no continuation options available for the DCAP. The employee may be eligible to continue participating in an FSA; see the following section for information.

Navia debit cards will be deactivated by the last day of the month in which an employee loses eligibility. However, the employee may still submit claims for reimbursement after that.

FSA and Limited Purpose FSA

Employees enrolled in an FSA or Limited Purpose FSA who end employment or retire during the plan year must complete and submit the PEBB FSA Termination form to their payroll or benefits office within 30 days of coverage ending.

The form requires that the employee choose one of the following options:

Stop participation: Employee declines to continue participation but retains access to their full election amount.

• The full annual election may be claimed for expenses incurred before the PEBB benefits end date, which is the last day of the month in which the employee lost eligibility.
• Claims may be submitted to Navia, up to the available account balance, through March 31 of the following plan year.
  • An employee's account balance may include FSA contributions from their final paycheck.

Continue participation: Employee may continue participation through accelerated contributions or COBRA.

• Accelerate contributions (if offered by the employer)
  • Employee pays the remaining contributions for the plan year from their last paycheck.
  • Allows eligible expenses to be incurred through December 31.
  • Claims can be submitted to Navia through March 31.

• COBRA: Continue payments posttax
  • Available if employee has claimed less than they have contributed to the FSA.
  • Navia will mail a COBRA election notice to the employee.
    • Navia must receive the employee's Navia COBRA election form no later than 60 days from the date PEBB benefits ended, or from the postmark date on the election notice, whichever is later.
  • Contributions paid directly to Navia for the rest of the plan year.
  • To elect COBRA, employees must complete the election process included in the COBRA mailing noted above. They cannot use the PEBB FSA Termination form to elect COBRA.

Dependent Care Assistance Program

Employees who terminate employment and have unspent DCAP funds may continue to submit claims for eligible expenses as long as the expenses allow them or their spouse/state registered domestic partner to attend school full-time, look for work, or work full-time.

Expenses may be incurred through December 31 of the year the employee terminates employment. Claims may be submitted to Navia, up to the available account balance, through March 31 of the following plan year.

Processing enrollments and changes

When BAs receive forms, they should verify that the forms have been received within the required timeframes and completed in full, including any necessary documentation such as proof of the qualifying SOE event. An incomplete form may result in missed deductions or the employee may experience problems with accessing their FSA and/or DCAP benefits.

For forms received timely and completed in full:

1. Date-stamp the form(s) with the date received.
2. Complete the employer portion on the form(s).
3. Include the following information along with the enrollment forms:
   • The name of the agency or institution of higher education.
   • The benefit administrator's name, phone number and email.
   • Include any important information about the form or employee/participant as needed.
4. Upload the form(s) through the Navia employer portal.

   • Each FSA/DCAP employer has specific BAs with access to the PEBB employer portal.

   • If you need assistance with the upload process, please contact Navia’s dedicated team of Account Managers to help you Monday through Friday 7 a.m. and 5 p.m. PST at PEBBAdmin@naviabenefits.com or (424) 452-3488.

   • If you are unable to upload documents via the PEBB employer portal, please send the cover sheet and form to Navia Benefit Solutions via.

     • Fax: 425-233-6366
     • Email: Navia Benefits Solutions - PEBB
     • Mail: Navia Benefit Solutions, PO Box 53250, Bellevue, WA 98015

Navia Employer Portal

Benefits administrators use the Navia Employer Portal to securely upload member forms to enroll, change status, or terminate enrollment in an FSA and/or the DCAP. All signed forms must be submitted through the portal, which allows for faster processing times and provides a confirmation email once a form has been successfully uploaded.

Benefit administrators must be given approved access by Navia and HCA before logging into the PEBB employer portal.

Employers must inform Navia’s dedicated BA help team immediately if there is a change in benefit administrator contact information. Navia will then notify HCA of the changes needed.

For instructions on how to register for the portal and upload files:

• Read the PEBB Navia admin portal guide, and/or
• View the New Navia Employer Portal recorded webinar

Navia Employer Portal FAQs

Can PEBB organizations have more than one BA with access to the portal?

• Yes. No more than three, but no less than one.

How can BAs transfer access to a new user or remove a current user?

• Contact Navia to have a user added or removed.

Can multiple forms be submitted at the same time when using the portal?

• Yes, multiple forms can be submitted at once, up to the maximum file size allowed (10 MB).

Will employees still be able to enroll on the Navia website during open enrollment?

• Yes.

What are the other file types in the drop menu on the Send a File page?

• There are file types used by non-PEBB employers. The only file type PEBB will use when uploading files is “Enrollment, Change in Status, or Termination forms.”

Will the PEBB billing still be handled by HCA?

• Yes. Navia and HCA will be in communication for employee enrollment, changes and terminations so HCA knows what to bill for.

Can BAs see basic employee enrollment information in the portal?

• No, the portal does not offer this functionality at this time. Navia is exploring this as an option for BAs to use in the future.

Payroll deduction guidelines

The amount deducted from an employee's pay is the total annual election amount divided by the number of paychecks the employee will receive during the plan year (January 1-December 31).

If an employee enrolls midyear, the amount deducted is the total annual election amount divided by the number of paychecks they will receive for the remainder of the plan year.

When an employee transfers from one PEBB employer to another, and continues their FSA/DCAP, the per-paycheck deductions can increase to meet the annual contribution amounts by the end of the plan year. A transfer is not a qualifying event to change FSA or DCAP elections.

Administrative fees and responsibilities

The employer administrative fee for the Medical FSA, collective bargaining agreement (CBA) Medical FSA, Limited Purpose FSA, and DCAP is included in the total funding rate paid to the PEBB Program by the employer for each eligible employee.

The administration of FSA and DCAP benefits is a team effort between the employer, Navia Benefit Solutions, and the Health Care Authority.

Responsibilities of the employer

• Manage enrollment changes throughout the year and make the corresponding updates to payroll.
• Provide FSA and DCAP enrollment forms and educational materials to employees upon request. These materials can be downloaded and printed from the Navia's website.
• Provide timely and accurate reconciliations of all employees' eligibility and enrollment discrepancies upon Navia's request.
• Participate in evaluation meetings held by HCA, if appropriate, to discuss Navia's performance.

State central payroll and higher-education payroll systems will:

• Provide eligibility documentation related to employees directly to Navia.
• Receive and process payroll deduction files from Navia.
• Deposit actual dollars collected from an FSA and/or DCAP payroll deductions in account 165.
• Transmit FSA and/or DCAP payroll deduction detail information to Navia.
• Provide all employee data needed to complete the annual IRS mandated nondiscrimination testing to Navia.

Responsibilities of Navia Benefit Solutions

• Assist with enrollment activities by providing general information and customer support to employees on the Navia's website and toll-free phone number (1-800-669- 3539).
• Provide paper and online enrollment (via their website) during the PEBB Program annual open enrollment period (November 1-30).
• Accept employees’ eligibility documentation from their employers.
• Accepts enrollment forms and payroll reporting (via file) from the PEBB employer to update their employee’s FSA/DCAP accounts.
• Checks enrollment form is for the correct plan year (either OE form, Mid-year Election form, or Change in Status form).
• Offer an FSA debit card (Navia Benefits Card) for participants to use when they incur qualifying expenses.
• Offer fax numbers (1-425-451-7002 or toll-free 1-866-535-9227) to send claims and other correspondence.
• Process and pay claims.
• Provide the HCA with monthly bank account reconciliations, annual forfeiture reports, and other reports as needed.
• Participate in several PEBB Program annual open enrollment benefit fairs sponsored by the HCA.

Responsibilities of the Health Care Authority

• Manage the administration of the FSA and DCAP programs consistent with Chapter 41.05 RCW.
• Communicate FSA and DCAP programs and the PEBB Program annual open enrollment information to all eligible employees.
• Provide an FSA and DCAP summary in the Employee Enrollment Guide.
• Determine annually the required CBA Medical FSA administrative fee to charge to higher education institution employers.
• Pay to Navia the administrative fee in the contract between Navia and HCA.
• Monitor monthly bank account reconciliations and annual forfeiture reports produced by Navia. The HCA will pay any deficits that might occur from the state's FSA.
• Schedule evaluation meetings, if appropriate, with employers to discuss Navia's performance.