EMPLOYEE BENEFITS

Dependent Care Flexible Spending Account Overview

MIT provides the Dependent Care Flexible Spending Account to reimburse eligible employees for planned dependent care expenses incurred while they are at work.

Who Is Eligible

You are generally eligible to participate in the Dependent Care Flexible Spending Account Plan if you (1) work at least 50% of the normal full-time work schedule in your department, laboratory or center; (2) are appointed to work at MIT for at least three months; and (3) are paid by MIT.

The following titles are not eligible: consultants, contractors, fellows, affiliates, teaching or research assistance, honorary lecturers, post-doctoral trainees, people paid by MITemps and members of the armed services assigned to MIT.

If you are a member of a collective bargaining unit, all the provisions of the Dependent Care Flexible Spending Account Plan are subject to the terms of your collective bargaining agreement.

Benefit

When you enroll, contributions to your Dependent Care Flexible Spending Account will be deducted from your pay each pay period, before taxes. When you incur eligible expenses, you submit claims for reimbursement through your account (see How to Obtain Reimbursement).

By setting aside money for these expenses before taxes, you will generally pay less in federal, state and Social Security taxes. You may contribute up to $5,000 each year per family or the amount your spouse will receive in wages during the calendar year, whichever is less.

Eligible Expenses

You will be eligible to receive reimbursement for expenses incurred after your coverage begins. Think about the dependent care expenses you expect to incur over the remainder of the year to determine the amount you should contribute to the account. The account generally reimburses you for dependent care expenses you incur while you and your spouse work or search for work.

Generally, your "dependent" is anyone you claim as a dependent on your tax return and who is: (1) under age 13, or (2) disabled and incapable of self-care.

You should estimate carefully and not set aside more than the total of your anticipated expenses. Examples of reimbursable expenses include:

• Adult day care
• Day care or summer day camp
• Day care provided in your home
• Before- or after-school care

Before you decide to contribute, you may want to compare the Dependent Care Flexible Spending Account to the federal tax credit, which applies to many of the same expenses.

Reimbursement Period

You will only be reimbursed for eligible expenses you incur for services received during the calendar year (or for the remaining calendar year, if you are hired mid-year). You cannot receive reimbursement for expenses incurred in a different year.

Effects on Your Salary

You are responsible for the contributions to this plan. Contributions are made on a before-tax basis each pay period. Participation in the Dependent Care Flexible Spending Account Plan reduces your salary subject to the Social Security tax, which will result in minimal decreases in Social Security benefits for most participants whose salaries are below the Social Security wage base.

Participation in this plan will not affect your salary for purposes of annual salary reviews, 401(k) participation, life insurance coverage, or disability benefits.

The plan will only reimburse you for eligible expenses incurred while you were enrolled in the MIT Plan. The plan will not reimburse you for service rendered prior to your enrollment in the MIT Dependent Care Flexible Spending Account Plan.

Enrollment

You may enroll in a Dependent Care Flexible Spending Account within 31 days of your date of hire or appointment, or within 31 days of when you first receive your Welcome Packet, whichever is later. You may choose to begin your coverage on the date of hire or appointment, or the first of the next month.

To enroll you will need to indicate the amount you want to contribute to the account the remainder of the year. This amount will be deducted each pay period with before-tax dollars.

The Benefits Office must receive your enrollment within this 31-day period or you will generally need to wait until the next annual Open Enrollment period. Open Enrollment for most benefits is held each fall.

Unlike other benefits, you must re-enroll in the Dependent Care Flexible Spending Account each year during Open Enrollment if you want to participate in the following year.

Changes

In exchange for the tax advantages provided by the Dependent Care Flexible Spending Account, you are prohibited from enrolling in, canceling or making any changes to your contribution amount unless you have an allowable change in family or employment status. Your change must be on account of and consistent with your change in family or employment status. See the list of allowable status changes. If you have an allowable change in family or employment status, you must contact the Benefits Office within 31 days to make any corresponding benefit changes.

When Do Contributions End?

Your before-tax contributions to your Dependent Care Flexible Spending Account end at the end of the Plan Year or when you become ineligible for benefits through MIT. You become ineligible due to termination, change of appointment ending your benefits eligibility, or retirement. However, you may continue to submit claims for reimbursement from your account for expenses incurred through the end of the plan year in which you had been enrolled.

MIT expects to continue the Plan as a benefit to employees, but reserves the right to change or terminate the Plan should this become necessary or advisable.