Section 125 Flexible Spending Plan / Heath Reimbursement Account (HRA)

Section 125 Plan 

2022 OPEN ENROLLMENT
 Nov 07, 2022 - Nov 21, 2022

Regular employees may voluntarily elect a pre-tax payroll deduction to be deposited into a Section 125 Plan Healthcare Flexible Spending (HCFSA) account and/or Dependent Day Care Spending (DCA) account, from which employees are  reimbursed (tax-free) for qualified healthcare and/or dependent day care expenses. 

Section 125 Plan enrollment is subject to the following provisions:

  • New employees may enroll in the Section 125 Plan within 30 days of hire;
  • Current employees who experience a "life event" may enroll in the plan within 30 days of the occurrence of the qualifying "life event"; otherwise, their enrollment in the Section 125 Plan is limited to the November open enrollment period;
  • An open enrollment window that runs concurrently with the District's Health Insurance open enrollment in November, with all open enrollment changes effective January 1st;
  • Contributions to the Spending Account(s) are subject to an annual "use-it-or-lose-it" rule: deposited funds do not role over from year to year and funds must be used for services received within the plan year - except, the HCFSA account allows a limited ($500.00) "carry-over" of funds from one year to the subsequent year;
  • Maximum annual contribution amount to the HCFSA is $2,750; and
  • Maximum annual contribution amount to the DCA is $5,000 ($2,500 if married, filing separately)

Employees enrolled in the current calendar year plan (i.e. 2022) must re-enroll during open enrollment in order to participate during the next calendar year (i.e. 2023).

Any employees who wish to begin participation in the District's Section 125 reimbursement plan next year (2023), must contact Karla Tabag-Smith, Hartnell's American Fidelity Manager, to complete the Section 125 enrollment.  American Fidelity is currently accepting Open Enrollment Appointments per the below schedule:

Virtual:  The week of November 7 - 11, 2022, and
In-Person:   Wednesday, November 9, 2022

*Employees currently enrolled in the 2022 Section 125 plan, must RE-enroll for participation in 2023.

Click here to Schedule a one-on-one appointment to enroll  and/or learn more!

2021 Appropriations Act Expired 12/31/21

Late last year, Congress passed a COVID-19 relief bill, known as the Consolidated Appropriations Act, 2021 (CAA), which was signed into law on December 27, 2020.  This legislation allowed employers to voluntarily elect to temporarily relax some of the rules normally restricting employee participation in Section 125 Healthcare Spending Accounts (HCFSAs) and Dependent Care Accounts (DCAs).

To provide financial relief and greater flexibility for employees participating in the Section 125 plan, the District has elected to apply the following CAA provisions: 

  • Allow prospective mid-year enrollment & changes
    - No qualifying event is required to make changes
    - Elections cannot be changed below the level of contributions made or claims reimbursed
  • Allow for unlimited fund carryover for Healthcare and Dependent Care Accounts
    - All unused funds in an HCFSA and DCA may be carried over to 2021 (from plan year 2020) and to 2022 (from plan year 2021)
    • For the 2020 and 2021 plan years, unlimited Healthcare FSA carryovers were permitted from the 2020 plan year to 2021 and from the 2021 plan year to 2022. Beginning with the 2022 plan year, employers’ options to offer a carryover will once again be limited to a maximum of $550 (adjusted yearly for inflation).
    • There is no carryover maximum

  Health Reimbursement Account (HRA)

Employees who are eligible for healthcare coverage and who elect to enroll in coverage costing less than the District's "Base Plan" (PPO$25), are automatically enrolled in the District's HRA (Health Reimbursement Account). 

A District-paid "shared savings" contribution is deposited into an employee HRA for each month of coverage maintained under the alternate MCSIG plan (see "Shared Savings Calculation" under District Resources below). 

Unlike the Section 125 Plan above, funds in the Shared Savings HRA account is NOT subject to a "use-it-or-lose-it" limitation; HRA funds may accumulate from year to year and funds may be used toward past services received, so long as services are after HRA enrollment began. 

Employees who receive the District-paid HRA contributions may also voluntarily elect to enroll in the Section 125 plan.  The Section125 paycheck deductions for healthcare spending plus District HRA contributions can achieve an increase in healthcare reimbursement dollars for the year.

Note: Employee enrollment in the HRA is automatically managed by the District simultaneously with employee healthcare coverage enrollment and changes. 

 Section 125 & HRA Plan Resources

As of 2021, American Fidelity is the District's third-party administrator providing integrated services for both the Section 125 Plan and the HRA Plan, allowing employees to access funds from both accounts with one single debit card.

Active employees who are enrolled in the HRA will receive an automated email from American Fidelity, confirming the account set-up and a participant debit card has been issued.  Meanwhile, new and prospective HRA participants can peruse this American Fidelity HRA Plan website information. 

Visit American Fidelity (AF) Today !

District Resources

*Note: Forms require the latest version of Adobe Acrobat Reader 

Webpage last updated: 09/06/22

Who To Contact

  •  
    Phone: (831) 755-6706; FAX: (831) 755-6937
    Building: D - College Administration (North)
    Office: Room 110
    College Administration (North)