WSR 03-16-096

PROPOSED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed August 6, 2003, 8:22 a.m. ]

Original Notice.

Exempt from preproposal statement of inquiry under RCW 34.05.310(4).

Title of Rule: Updates to WAC 415-600-210, 415-600-260, 415-600-310, and 415-600-410, dependent care salary assistance program.

Purpose: Updates to outdated web pages references; housekeeping update.

Statutory Authority for Adoption: RCW 41.04.640, 41.50.050(5).

Statute Being Implemented: RCW 41.04.600 - 41.04.635.

Summary: See Purpose above.

Name of Agency Personnel Responsible for Drafting: Merry A. Kogut, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; Implementation and Enforcement: Robert Julian, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7021.

Name of Proponent: Department of Retirement Systems, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal Changes the Following Existing Rules: [No information supplied by agency.]

No small business economic impact statement has been prepared under chapter 19.85 RCW. These amendments have no affect on businesses.

RCW 34.05.328 does not apply to this rule adoption. The Department of Retirement Systems is not one of the named departments in RCW 34.05.328.

Hearing Location: Department of Retirement Systems, 6835 Capitol Boulevard, Conference Room 115, Tumwater, WA, on September 9, 2003, at 3:30 p.m.

Assistance for Persons with Disabilities: Contact the rules coordinator by seven days before the hearing, if possible, phone (360) 664-7291, TTY (360) 586-5450, e-mail merryk@drs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Merry A. Kogut, Rules Coordinator, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, e-mail Merryk@drs.wa.gov, fax (360) 753-3166, by 5:00 p.m. on September 9, 2003.

Date of Intended Adoption: No sooner than September 10, 2003.

August 5, 2003

Merry A. Kogut

Rules Coordinator

OTS-6560.1


AMENDATORY SECTION(Amending WSR 01-21-091, filed 10/22/01, effective 11/22/01)

WAC 415-600-210   How do I enroll in DCAP?   (1) You enroll in the dependent care salary reduction assistance program (DCAP) by submitting a completed salary reduction agreement (SRA) form to the department of retirement systems (DRS).

(2) SRA forms are available through DRS or its website at ((http://www.wa.gov/drs/forms/)) http://www.drs.wa.gov/forms.

(3) You may enroll in DCAP:

(a) During the open-enrollment period;

(b) Within sixty days of becoming an eligible employee; or

(c) At any time you have a qualifying change in status as set forth in WAC 415-600-240.

(4) The open enrollment period is the month of November for the following plan year.

(5) The enrollment process is complete on the date DRS approves your completed SRA.

[Statutory Authority: RCW 41.50.050(5), 41.04.600 through 41.04.645 and 26 U.S.C. 01-21-091, 415-600-210, filed 10/22/01, effective 11/22/01.]


AMENDATORY SECTION(Amending WSR 01-21-091, filed 10/22/01, effective 11/22/01)

WAC 415-600-260   What is "earned income" for purposes of DCAP?   (1) Except as set forth in subsection (2) of this section, earned income for DCAP purposes includes wages, salaries, tips and other employee compensation, plus the amount of the taxpayer's net earnings from self-employment for the taxable year.

(2) If your spouse is either a full-time student or physically or mentally incapable of self-care, your spouse's earned income is deemed to be:

(a) Two hundred fifty dollars per month, if you have one qualifying person for whom care is provided; or

(b) ((Four)) Five hundred dollars per month, if you have two or more qualifying persons for whom care is provided.

[Statutory Authority: RCW 41.50.050(5), 41.04.600 through 41.04.645 and 26 U.S.C. 01-21-091, 415-600-260, filed 10/22/01, effective 11/22/01.]


AMENDATORY SECTION(Amending WSR 01-21-091, filed 10/22/01, effective 11/22/01)

WAC 415-600-310   Do my expenses qualify for DCAP reimbursement?   (1) You may be reimbursed for dependent care expenses for the well-being and protection of a qualifying person, provided that the expenses are incurred to enable you and your spouse to be gainfully employed.

(a) Only expenses incurred on days you work may be reimbursed.

(b) If you are married, only expenses incurred on days you and your spouse both work may be reimbursed, provided that:

(i) If your spouse is a full-time student, expenses incurred on days you work and your spouse attends school may be reimbursed.

(ii) If your spouse is physically or mentally incapable of self-care, expenses incurred on days you work may be reimbursed.

(2) You may be reimbursed only for expenses incurred during the plan year for which you are enrolled. If you enroll after January 1 of the plan year, you may be reimbursed only for expenses incurred ((from the date)) on or after the first day of the month following the month in which DRS approves your salary reduction agreement.

(3) Only the cost of care may be reimbursed. The following expenses may be reimbursed, subject to the limitations stated in subsection (4) of this section.

(a) Expenses for care of a qualifying person in the participant's home, including feeding, administration of medicine, general supervision, and incidental household services; and

(b) Expenses for care of the following qualifying persons outside the participant's home:

(i) A dependent of the participant, age twelve or younger, with respect to whom the participant is entitled to a federal tax deduction.

(ii) Any other qualifying person who regularly spends eight hours or more per day in the participant's home.

(4) The following limitations apply to the reimbursement of expenses:

(a) Expenses for food, clothing, and entertainment are reimbursable ONLY IF these expenses cannot be separated from the cost of care.

(b) Expenses for care in a dependent care center (as defined in Internal Revenue Code (IRC) Section 21(b)) are reimbursable ONLY IF the facility complies with all federal, state, and local laws and regulations.

(c) Expenses for schooling are reimbursable ONLY IF:

(i) The schooling is at a prekindergarten level; and

(ii) The expenses cannot reasonably be separated from the cost of care.

(d) Payments to a person for whom you or your spouse may claim a dependency exemption for federal income tax purposes are not reimbursable.

(e) Payments to a nondependent child, as defined in IRC Section 151 (c)(3), are not reimbursable unless the child will be age nineteen or older by December 31 of the plan year.

(f) Summer camp expenses, when the child stays overnight, are not reimbursable.

(g) Amounts paid by an employer of your spouse or by an educational institution where your spouse is enrolled as a student are not reimbursable.

[Statutory Authority: RCW 41.50.050(5), 41.04.600 through 41.04.645 and 26 U.S.C. 01-21-091, 415-600-310, filed 10/22/01, effective 11/22/01.]


AMENDATORY SECTION(Amending WSR 01-21-091, filed 10/22/01, effective 11/22/01)

WAC 415-600-410   How do I request reimbursement for DCAP expenses?   (1) You must use the DRS reimbursement claim forms to submit claims for dependent care expenses.

(2) DRS will mail a supply of reimbursement claim forms to you upon confirmation of your enrollment. You can obtain additional forms by phone or on the DRS website, at ((http://www.wa.gov/drs/forms/)) http://www.drs.wa.gov/forms.

(3) You may submit reimbursement claim forms as often as you wish.

(4) The reimbursement claim form must be completed, signed, and accompanied by bills, invoices, receipts, or a statement signed by the provider. The department cannot accept canceled checks or credit card statements as verification. All documentation must show the amounts of dependent care expenses and periods of service for which you seek reimbursement.

(5) DRS must receive claims for expenses incurred during a given plan year on or before March 31 of the following year.

[Statutory Authority: RCW 41.50.050(5), 41.04.600 through 41.04.645 and 26 U.S.C. 01-21-091, 415-600-410, filed 10/22/01, effective 11/22/01.]

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