Conference moira::parenting_v3

re: .0

It stinks, but all the companies I have worked for have had the same 
restrictions in their health care programs.  Now, this was before DCRAs even
existed.

I suspect that the original reason for this kind of a rule was to avoid the
following kind of situation:

I pick the least cost insurance with minimal benefits.  I get injured and put
on STD.  I then change my insurance to the one with the maximum benefits and
start getting the benefits w/out having paid any premiums.

Now, since DCRA has nothing to do with the benefits paid out of Digital's
pocket, I think the policy needs to be revisited.

If this is an IRS rule rather than a Digital rule, we are all losers.

Bob

Liz,

The same thing happened to me, except that I came back 1/7 so it only minimally
affected me.  After my return, the changes still did not take effect for another
week, so it affected me for 2 weeks.   Our personnel person here just doubled my
DCRA deduction for 2 weeks to make up for it.

I somewhat disagree with Bob's reasoning because what if I have dependent coverage
and my spouse is on disability leave with a major illness/injury, and I can change
coverage.  If there is an OPEN ENROLLMENT, it should be just that - OPEN!  Anyone
can change plans (or continue an existing plan, such as DCRA) for any reason.

Kristen

P.S.  Another thing that really gets to me - when you go on STD, the information gets
spread throughout the company, and your (offical mail) accounts get disabled, your
car plan B payments stop, etc... - EVERYONE knows you are gone and treats you as if
you left the company.  When you return, NOTHING is spread around - you have to call
all of those people to get "re-activated!"

re: .2  Kristen, fix your VT1300 windows again :-)

 Is it clear that the DCRA payments are not simply being suspended during the
 disability (rather than the program being discontinued a/o 1 January)?  The
 program requires that eligible expense go toward dependent care being
 provided so that you can work, and you aren't working when on disability. 
 Of course, making _deductions_ while you're on disability is not the same as
 paying _expenses_ while you're on disability, but it isn't hard to imagine
 that the IRS and/or Digital bureaucracies could get confused on this point. 


 In any case, you can still get the full benefit of DCRA even if deductions
 are suspended for awhile.  Regulations govern the maximum you can deduct in a
 calendar year, not a given week.  When you return to work, just either 
 a) have temporarily higher deductions to make up the difference (as Kristen
 did), or b) arrange slightly higher deductions for the rest of the year.

 You do not even need to have re-enrolled in the program during the open
 enrollment period, since change in dependent status allows you to change your
 participation or deduction level.  Whenever you enroll, you can deduct the
 full $5000 amount over what is left of the year, assuming you have $5000 of
 salary and eligible expenses still coming to you.
 
 		- Bruce

              <<< Note 641.4 by RDVAX::COLLIER "Bruce Collier" >>>



 In any case, you can still get the full benefit of DCRA even if deductions
 are suspended for awhile.  Regulations govern the maximum you can deduct in a
 calendar year, not a given week.  When you return to work, just either 
 a) have temporarily higher deductions to make up the difference (as Kristen
 did), or b) arrange slightly higher deductions for the rest of the year.


Bruce, this seems to make sense, but let me make sure (and I will consult
our CPA).  My daughter's daycare expenses are not being taken out for let's
say January and Frebruary (keep it simple).  So, I have about $560 in 
expenses that have not been taken out in pre-tax $$.  So, when I come back,
can I still submit those receipts and expect to be reimbursed?  (provided
I have a little more taken out for the year)  If so, maybe I'm not in such 
bad shape after all...

Thanks,

Liz

Liz,

I think it is simplest to realize that you can take out a maximum (I think $5K)
per YEAR, not necessarily per pay period.  As long as you submit daycare expenses
for at least that amount sometime this year, you will get all of your money back
from DCRA.  So if you want to double up for a few weeks to make up for the time
you're on STD, and have enough daycare expenses to make up for it, then you should
not be out any money - just the hassles.

On another reply about the expenses being for daycare "so you can work" - that is
very true.  However, some of us HAVE to pay for daycare, or remain enrolled in the
program - whether or not our child(ren) attends - or we will have no daycare.  So
I see this as fitting the "so I can work" category!  (rationalization I know)

Kristen

 Presumably you will have two kids getting care after you return to work.  I
 would presume, then, that you will have daycare expenses for the year well
 above $5000.  If so, it really doesn't matter if you submit expenses from the
 first two months.  If your ongoing expenses were only at the rate of about
 $280 per month, or $3360 per year, then the January-February expenses would
 matter.  I favor Kristen's interpretation ("you needed to hold the opening
 anyway so you could work the rest of the year").  But there is some chance
 that they might check, and disallow these expenses.  It would be much more
 painful to lose the full amount than to lose the tax deductionbs on it, so I
 might be inclined not to take the risk.
 
 Let me make the deductions clear with an example.  Suppose I have a child in
 daycare, at $8,000 per year, but I forget to enroll.  Suppose in November a
 second child is born, and I am promoted to Senior Vice President (so as to
 have sufficient salary for this example to work [not that I don't deserve it,
 too!]).  I could enroll, because of the change in family circumstances, and
 have $1000 taken out of my pay each of the last 5 weeks of the year.  I could
 apply this $5000 against my costs for the year, even if the new child didn't
 build up a $5000 bill before the new year.
 
 		- Bruce
 
 p.s.  Kristen - you need to set your right margin so that it fits on an 80
 column screen (no, don't worry, I'm not stuck on a VT52; I work from a proper
 computer: a Macintosh!).

re .4

> In any case, you can still get the full benefit of DCRA even if deductions
> are suspended for awhile.  Regulations govern the maximum you can deduct in a
> calendar year, not a given week.  When you return to work, just either 
> a) have temporarily higher deductions to make up the difference (as Kristen
> did), or b) arrange slightly higher deductions for the rest of the year.

One would think it would work this way.  But when I returned to work after 
Michelle was born, my personel rep told me that the maximum you could deduct 
*PER WEEK* was $96.  Since I returned to work in August, and my dacare costs 
are greater than $96, I wanted to deduct more.  She wouldn't let me.  As a 
matter of fact, I believe she even showed me the DEC regulation that limited 
the deduction to $96/week, but I may be mistaken.

My husband's company, on the other hand, allows you to deduct as much as
you like per week - provided it does not exceed $5,000 in one year.  So -
this looks like a DEC restriction, not an IRS restriction. 

re .5

>						So, I have about $560 in 
> expenses that have not been taken out in pre-tax $$.  So, when I come back,
> can I still submit those receipts and expect to be reimbursed?

My personell rep told me that I could not submit reciepts for daycare
services rendered prior to my signing up for the dependent care program.
For what it's worth, my husband's company has the same restriction.

    re: .7
    
    Bruce, Kristen is using one of those crippled VS3100s, called a VT1300. 
    It's been doing strange things to her windows.
    
    Bob

 In re: .8
 
 Here is the basis of what I stated in .7 about what amounts could be
 deducted, and what period the expenses could apply to.
 
 In December, 1989, I thought that I might become eligible for the program
 late in 1990, so I enquired in detail about joining in mid-year.  My PSA
 first gave answers similar to those in .8, but then agreed that she didn't
 know, and referred me to a "specialist."  She also was uncertain, but agreed
 to consult with the program's managers.  She got back to me next day, with
 the information stated in .7.  I have not seen it spelled out in writing.
 I ended up starting in the program as of 1 January, so I am not living proof.
 
 The first year (1989), the program didn't start until mid-May, and there was
 a stated annual "weekly maximum" of $151.  In December 1990, the
 application stated a "weekly maximum" of $96.  As is obvious, both numbers
 simply round off the $5,000 ceiling divided by the number of weeks the
 program was available.  The information I got was that although the
 literature does assume that applicants are joining during open enrollment,
 the actual maximum for any individual would be $5,000 divided by the number
 of weeks that they would be participating.  Digital bases "qualifying
 expenses" on the IRS code.  It defines qualifying dependents, requires that
 the care be necessary for you to work, requires that the work and care be
 during the tax year in question, etc.  It does not specify anything about the
 period you are in Digital's plan.
 
 I checked the Orangebook, and it does not spell out any detail on these
 matters.  It does refer one to the "Dependent Care Information Guide 1989
 (Part # EZ-33017-50)".  I am pretty sure that the  extensive booklet that I
 consulted over a year ago _also_ didn't spell this out fully; I'm not sure 
 it is this same booklet, but the date makes it sound that way.
 
 In summary, I based what I said in .7 on careful inquiry, and I believe it
 is accurate.  It would, though, be easy for a PSA to have a different opinion
 based on the somewhat incomplete written statements available.
 
 		- Bruce

    Bruce,

    Evidently personel has improved their documentation since the first
    year (not surprising). The Dependent Care Account Program Authorization 
    form (the form you fill out to sign up for the program), the 1990 Open 
    Enrolment booklet and the Dependent Care booklet all explicitly specify 
    a weekly maximum contribution of $96. (I just checked).

    Personally, I think this restriction is rediculous.  It is NOT a
    government restriction because as I said in my earlier note, my
    husbands company follows the more reasonable guideline you described
    in .4.

    I think we lose on this one.

    -Carol

Well I am living proof that it can be overridden, so
let me know if you have any problems doing so.

Kristen

    
    In re .11
    
    No, they haven't improved the documentation.  The first year the form
    stated that since the Benefit Period started in May, the maximum weekly
    contribution was $151 (as I said earlier).  Whoever drafts these forms
    is assuming that they are being used for the full period.  I think you
    will find that the form does not reflect the policy.  At least that is
    what they told me earlier.  Anyone who gets them to agree on this
    point please also urger them (again!) to clarify the form.
    
    		- Bruce