If you decide to enroll in HCRA, you can contribute up to $5,000 of your before-tax salary each year. You may want to consult with a tax advisor to determine how much you should contribute and whether or not you’re affected by any IRS restrictions.
Enrolling in HCRA
If you are a newly hired employee, you may enroll in HCRA during the 30 days following your hire date. Newly hired employees are eligible to participate effective the first of the month following 28 days of employment. If you do not enroll during your 30 day enrollment period, you will have to wait until the next open enrollment period (unless you experience a qualifying change in status event that allows you to enroll mid-year. If you are not a newly hired employee, you may enroll in HCRA during the annual enrollment period, of each year. The plan year starts on January 1 of each year and runs through December 31.
Important - Participation is not automatic!
HCRA participation does not carry over automatically from one year to the next. You must re-enroll in HCRA during each annual open enrollment period.
It is important to note that participation in HCRA is not automatic. If you enroll in HCRA for a Plan Year, and wish to continue participation for the following Plan Year, you must re-enroll during the annual enrollment period. If you do not re-enroll, you cannot participate in HCRA until the next annual enrollment period unless you have a qualifying change in status.
The annual contribution amount you choose to deposit into your HCRA will be deducted in equal installments from your biweekly paycheck, before taxes are deducted. If you are a new hire and enroll during the year, your annual contribution amount will be deducted in equal installments from your biweekly paychecks remaining for the year.
Mid Year Election Example
Employee Hire Date: February 5, 2010
Eligibility for HCRA begins: April 1, 2010 (1st day of the month following 28 days)
Enrollment form is due: March 5, 2010 (30 days from date of hire)
First deduction begins: Friday, April 2, 2010 (1st paycheck in the month of April)
Claims Submission: claims may be filed for eligible expenses incurred on or after April 1, 2010 (eligibility date)
Remember: Estimate your expenses carefully, any funds remaining at the close of the plan year for which you have no eligible expenses will be forfeited. All claim must be received by March 31st of the following year for expenses incurred during the previous year.