4 | Page- Updated 11/19/19
Flexible Spending Account Programs
Medical Spending Conversion (MSC) Health Benefits Buy-out Waiver Program: Allows eligible employees
who can obtain non-City group health benefits (proof required) to waive their New York City health benefits in
return for a cash incentive payment (taxable) made semi-annually (June and December). Annual amount for
waived family coverage is $1,000 and waived individual coverage is $500. Employees who enroll remain in the
Buy-out Waiver program until they have a qualifying event or during open enrollment when a City health plan
can be elected. Re-enrollment is not required every year.
Medical Spending Conversion (MSC) Premium Conversion Program: Allows employees who have payroll
deductions for health insurance premiums and optional riders to increase their take-home pay. Payments are made
on a pre-tax basis effectively reducing the salary on which your taxes are computed by the amount of the health
plan deduction. Enrollment remains in effect during the Plan Year and your status cannot change unless an
approved Qualifying Event occurs mid-year. Enrollment in the Premium Conversion Program is automatic.
Health Care Flexible Spending Account Program (HCFSA): Allows employees to pay for eligible out-of-
pocket health care expenses on a pre-tax basis, with deductions taken directly from salary. This reduces your gross
salary for federal and Social Security tax, resulting in tax savings. HCFSA is designed to help employees pay
for necessary out-of-pocket medical, dental, vision, and hearing expenses not covered by health insurance.
The minimum annual contribution is $260 and maximum annual contribution is $2,750. Any unused balances
will be forfeited, If you don’t use it, you lose it! (see website below for more information*)
Grace Period.
There is a Grace Period offered following the end of a Plan Year. During this Grace Period, you may submit
claims for eligible medical expenses incurred from January 1st through March 15
th
, using the remaining
balance in your Plan Year account, if any. However, in the event that you are unable to submit HCFSA
Program claims by the end of the Plan Year or accompanying Grace Period, a Claims Run-Out Period is
provided, during which you may submit claims for services performed during the previous Plan Year or
accompanying Grace Period.
Plan Year: January 1st, – December 31st
Grace Period: January 1st, – March 15th
Claims Run-Out Period: January 1st– May 31st
(If you do not submit claims for eligible expenses incurred during the Plan Year or the Grace
Period by May 31st, you will forfeit any money remaining in your HCFSA for Plan Year).
E
nrollment in HCFSA remains in effect during the Plan Year and your status cannot change unless an
approved Qualifying Event occurs mid-year. Enrollment is not automatic from year to year. You must re-
enroll each year during the annual Open Enrollment Period.
Dependent Care Assistance Program (DeCAP): Employees are able to pay for eligible dependent care expenses
on a pre-tax basis, with deductions taken directly from paychecks. These deductions reduce your gross income on
your W-2 Form for federal and Social Security tax purposes. The minimum annual contribution is $500 and
maximum annual contribution is $5,000 (reduced to $2,500 if you are married and file a separate federal income
tax return). Any unused balances will be forfeited. Enrollment remains in effect during the Plan Year and your
status cannot change unless an approved Qualifying Event occurs mid-year. Enrollment is not automatic from
year to year. Employee must re-enroll each year during the annual Open Enrollment Period.
Plan Year: January 1st – December 31
st
Claim Run-Out Period: January 1st – February 28th
*Visit www.nyc.gov/olr , Flex Spending Account Programs for additional information.*