Flexible Spending Arrangements and Dependent Care Assistance Program

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

The SEBB Program's Medical Flexible Spending Arrangement (FSA), Limited Purpose FSA, 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 SEBB medical coverage can still enroll in a Medical FSA, Limited Purpose FSA and/or DCAP.

For a summary of these benefits, including the IRS maximum contributions, carryover amounts, and deadlines to submit claims and incur expenses, click on each item below.

Medical Flexible Spending Arrangement

What is a Medical FSA?

The Medical FSA 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 Medical FSA funds for themselves and their qualified dependents, even if their dependents are not enrolled in a SEBB medical, dental, or vision plan.

Employees cannot have both a Medical FSA and an HSA

Employees cannot have both a Medical FSA and a high deductible plan with a health savings account (HSA) or both a Medical FSA and a Limited Purpose FSA in the same plan year.

How much can employees contribute?

The employee decides how much to contribute to their Medical 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 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 totaling $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 Medical 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.

• For the 2023 plan year, unused funds up to $610 will carry over to 2024 but any amount above $610 will be forfeited.

Find real-world carryover examples on the FSAs webpage for school 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 Medical FSA Enrollment Guide and the FSAs webpage for school employees.

Limited Purpose Flexible Spending Arrangement

What is a Limited Purpose FSA?

The Limited Purpose FSA 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 high deductible plan with a health savings account (HSA). Enrolling in a Limited Purpose FSA with a high deductible plan allows employees to save more of their HSA funds for medical expenses.

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

Employees may not participate in a Limited Purpose FSA and a Medical FSA in the same plan year.

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 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 totaling $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.

• For the 2023 plan year, unused funds up to $610 will carry over to 2024 but any amount above $610 will be forfeited.

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

Dependent Care Assistance Program

What is the DCAP?

The Dependent Care Assistance Program (DCAP) reimburses qualifying child care or elder care expenses.

These expenses include babysitting, day care, elder day care, preschool, and registration fees while the employee works, is looking for work, or attends school full-time.

Participating in the DCAP and an FSA

Employees may participate in a DCAP account and a Medical 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 only available once they have been deposited each month. Employees may 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 and visit the DCAP webpage for school employees.

Who is eligible to participate?

Employees are eligible to participate if they meet the eligibility criteria outlined in WAC 182-31-040 are eligible to participate in the Medical FSA, Limited Purpose FSA, and DCAP (WAC 182-31-060).

• Employees eligible for SEBB benefits due to locally negotiated criteria are not eligible for the SEBB FSA and DCAP benefits (WAC 182-30-130).

When can employees enroll or make changes?

Eligible employees may enroll in or make changes by submitting completed forms to their payroll or benefits office during the following timeframes (WAC 182-30-100).  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 SEBB Midyear Enrollment form no later than 31-days after becoming eligible for SEBB benefits.

• For employees whose first day of work is on or after September 1 but not later than the first day of school, enrollment begins the first day of work for the new school year.
• For employees whose first day of work is at any other time during the school year, enrollment begins the first day of the month following the day the employee becomes eligible for SEBB benefits.
  • Exception: For employees who establish eligibility at any time in the month of August, enrollment begins on September 1 if the employee is also determined to be eligible for the employer contribution toward SEBB benefits for the school year that begins on September 1 (WAC 182-31-040).

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 high deductible 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 high deductible plan with an HSA and a Medical FSA during annual open enrollment. Employees will have the following options:

1. Keep the high deductible plan and disenroll from the Medical FSA, or
2. Keep the Medical FSA and disenroll from the high deductible plan, or
3. Keep high deductible plan and switch to a Limited Purpose FSA.

If the employee does not make a choice by December 31, they will remain enrolled in the high deductible plan with an HSA and will be disenrolled from the Medical 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 a Medical FSA and a Limited Purpose FSA during annual OE?

Employees who are not enrolled in a high deductible plan with an HSA that elect both a Medical FSA and a Limited Purpose FSA during annual OE will be enrolled in the Medical FSA.

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 SEBB Change in Status form and proof of the event no later than 60 days after the date of the event (SEBB SOE matrix - Policy 45-2A).

• The enrollment or change begins the first day of the month following the later of the event date or the date the form is received by the payroll or benefits office. 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.

Transferring to another SEBB organization

Employees who enroll in an FSA or DCAP and later transfer to another SEBB organization, 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 School Employment Transfer form to the new SEBB org no later than 31 days after the first day of work.
  • SEBB organizations should set up payroll deductions before signing and submitting the form to Navia.

To learn more, see 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 an FSA or DCAP account when they lose eligibility for the employer contribution toward SEBB benefits, although they may be eligible to continue participating in an FSA. There are no continuation options available for the DCAP.

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

Medical FSA and Limited Purpose FSA

Employees enrolled in a Medical FSA or Limited Purpose FSA who end employment or retire during the plan year must complete and submit the SEBB 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 SEBB 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 SEBB organization)
  • 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 SEBB 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.

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 to attend school full-time, look for work, or work full-time.

Expenses may be incurred through December 31. 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 forms are received, verify that they have been received within the required timeframes and completed in full. An incomplete form may result in missed deductions or the employee may experience problems with accessing their FSA and/or DCAP benefits. If a form is received after the employee's eligible enrollment window has ended, notify the employee that they will not be enrolled and of their right to appeal through the regular appeals process. To assist in drafting a denial notice, use this sample notification letter.

For forms received timely and completed in full:

• Date-stamp the form(s) with the date received.
• Complete the employer portion on the form(s).
• Upload the form(s) to the Navia employer portal.
  • If you need assistance with the upload process, please contact Navia.

Navia Employer Portal

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

For instructions on how to register for the portal and upload files, visit the Training materials and recordings webpage.

Navia Employer Portal FAQs

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

Yes.

How can BAs transfer access to a new user?

Contact Navia to have a user added or removed.

Do BAs need to use the same setup (username, password, and work email address) they have in SAW when accessing the portal?

Yes.

Can BAs add the Navia Employer Portal as a service in SAW?

Yes.

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.

Do all of the file descriptions listed in the portal, such as “NDT Document”, apply to SEBB?

No, SEBB BAs will only upload files associated with these descriptions: “Enrollment”, “Chang in Status”, or “Termination” form, or “FSA”, “HRA”, “HSA”, or “Commuter Data” file/spreadsheet.

If a BA changes districts, can they add Benefits 24/7 and Navia to their current SAW account?

BAs who change districts will need to create a new SAW account using their new work email address.

Can BAs see basic employee enrollment information in the portal?

No, the portal does not offer this functionality at this time.

Payroll deduction guidelines

For the FSAs and DCAP, 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). Work with Navia directly if you have employee’s that do not receive 12 paychecks per year and need to adjust the per paycheck amount.

• 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.
• If an employee transfers from one SEBB organization to another, and transfers their FSA/DCAP benefit, the per-paycheck deductions can increase to meet the annual contribution amount by the end of the plan year. A transfer is not a qualifying event to change FSA or DCAP elections.

Reporting payroll deduction amounts to Navia

Payroll deduction amounts must be reported to Navia each pay period using a file feed. Use the SEBB Navia consolidated file specifications to report these deductions to Navia. This file is only used to report payroll deductions; Enrollments, change in status, and terminations should be reported using the appropriate form.

Each SEBB organization will be responsible for providing a payroll file through the Navia Employer Portal. The file must:

• Be in the exact SEBB Navia consolidated file specification format.
• Follow the naming convention.
• Be uploaded to the Navia Employer Portal, five business days before each pay date.

Naming convention for payroll files

It's important that the naming convention of the payroll files are accurate. The naming convention of the payroll files must denote the WA State SEBB three-character company code (SWB), the district-specific six-character Agency Code, and the pay date (in a specific MMDDYYY format). For example, if the district-specific Agency Code is 600A01 and the pay date is 6/30/2023, the file name should be SWB.600A01.06302023.

For instructions on how to register for the portal and upload files, visit the Training materials and recordings webpage. 

Administrative fees and responsibilities

The employer administrative fee for the Medical FSA, Limited Purpose FSA, and DCAP is included in the total funding rate paid to the SEBB Program by the SEBB organization for each eligible employee.

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

Responsibilities of the SEBB organization

• Provide Medical FSA and DCAP enrollment forms and educational materials to their employees upon request. These materials can be downloaded and printed from Navia’s website.
• Receive and process open enrollment files from Navia.
• Transmit FSA and/or DCAP payroll deduction detail information to the Navia employer portal.
• Forward actual dollars collected monthly from FSA and/or DCAP payroll deductions to designated Lockbox: HCA – SEBB FLEX
  PO BOX 84245
  Seattle, WA 98124-5545.
• Provide all employee data needed to complete the annual IRS mandated nondiscrimination testing to Navia. 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.

Responsibilities of Navia Benefit Solutions

• Assist with enrollment activities by providing general information and customer support to employees on its website and toll-free phone number (1-800-669-3539).
• Provide paper and online enrollment (via their website) during the SEBB Program annual open enrollment period.
• Accept employees’ eligibility documentation from their employing SEBB organization.
• Participate in several SEBB Program annual open enrollment benefit fairs sponsored by HCA.
• Check employees’ enrollment forms and deduction amounts and transmit the enrollment files to the insurance system.
• 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 HCA with monthly bank account reconciliations, annual forfeiture reports, and other reports as needed.

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 SEBB Program annual open enrollment information to all eligible employees.
• Provide an FSA and DCAP summary in the Employee Enrollment Guide.
• 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. HCA will pay any deficits that might occur from the FSA.
• Schedule evaluation meetings, if appropriate, with employers to discuss Navia’s performance.