Tax Benefit Programs
OFFICE OF HUMAN RESOURCES AND LABOR RELATIONS
FLEXIBLE SPENDING ACCOUNTS PROGRAM
The City's Employee Benefits Program offers several pre-tax benefit programs that allow City employees to defer or reduce taxes. The New York City Office of Labor Relations administers the City's pre-tax benefit programs and has detailed information and enrollment forms. The following Flexible Spending Accounts allow employees to pay for certain expenses with pre-tax dollars:
FLEXIBLE SPENDING ACCOUNTS
The City's Flexible Spending Accounts are allowable under IRS Code 125. Through the
Health Care Flexible Spending Account (HCFSA), City employees can pay for out-of-pocket
medical expenses, not covered by health insurance, with pretax dollars. By enrolling
in HCFSA, deductions from your pay are put into a special account that is used to
reimburse you for covered medical expenses, up to annual contribution limit. Federal
regulations require that you use the entire amount in your HCFSA account by the end
of each Plan Year (December 31st). If you do not use the entire amount you allocate
to your account, you forfeit the unused balance. Payroll deductions for HCFSA are
shown in Box 14 of your W-2 Wage and Tax Statement.
The Dependent Care Assistance Program (DeCAP) works the same way with deductions from
your pay going to a special account used to reimburse you for eligible dependent care
expenses up to the annual contribution limit. Federal regulations require that you
use the entire amount in your DeCAP account by the end of each plan year (December
31st). If you do not use the entire amount you allocate to your account, you forfeit
the unused balance. Eligible dependent care expenses may include care for young children
or elderly dependents by a licensed caregiver.
MSC Premium Conversion Program
The MSC Premium Conversion Program automatically increases take home pay to employees who have payroll deductions for health insurance premiums and optional riders since these payments are not subject to federal or FICA taxes. Employees can opt out of the program during the Health Benefits Transfer Period in October of each year. Payroll deductions for MSC are shown in Box 14 of your W-2 Wage and Tax Statement.
Health Benefits Buy-Out Waiver Program
The Health Benefits Buy-Out Waiver Program allows City employees who are covered under a health insurance plan through an employer other than the City of New York or through a spouse's plan to waive their City health insurance and receive a cash incentive. Employees waiving family coverage receive $1,000 annually, and employees waiving individual coverage receive $500 annually. Payments are made in two equal installments in June and December and are subject to tax. Payments for the Health Benefits Buy-Out Worker program are included in your taxable wages in Box 1 of your W-2.
OTHER PRE-TAX PROGRAMS
Contact your Benefits Officer in A-207, ext. 6525 for more information.