How the BP spending accounts work

BP offers two types of spending accounts, both administered by Aetna:

• The Health Care Spending Account (HCSA) — allows you to pay yourself back for eligible health care expenses for you and your eligible dependents that are not paid by any medical, dental and/or vision plan.
• The Dependent Care Spending Account (DCSA) — allows you to pay yourself back for eligible dependent day care expenses so you (and your spouse, if married) can work or attend school on a full-time basis. This does not include expenses incurred for health care services.

The HCSA and the DCSA are completely separate. This means you cannot transfer contributions between the two accounts. In addition, you cannot use contributions in the HCSA to pay for dependent care expenses or contributions in the DCSA to pay for health care expenses.

Spending accounts at-a-glance

Option	Eligible dependents	Contribution limits
Health Care Spending Account (HCSA)	An individual whom you can claim as your dependent for federal income tax purposes. A child for whom you are required to provide health benefits under a court order.	Contribute from $120 to $2,300 before-tax each plan year.  When you contribute to the HCSA, BP matches 25% of your before-tax contribution, up to $200 each plan year, for a maximum contribution — your contribution plus the BP match — of $2,500 each plan year.
Dependent Care Spending Account (DCSA)	Any child under age 13 whom you can claim as a dependent for federal income tax purposes. If you are divorced or legally separated and have primary custody of the child, you do not need to be able to claim the child as a dependent for federal income tax purposes. Your spouse or other dependent (including a parent), regardless of age: Who is physically or mentally incapable of caring for himself/herself. Who lives in your home for at least one-half of the tax year. Who earns no more than the annual legal limit ($3,700 in 2011). Whom you can claim as a dependent for federal income tax purposes.	Contribute from $120 to $5,000 before-tax each plan year, subject to the following legal limits: Regardless of your income tax filing status, your maximum annual contribution cannot be more than what you or your spouse earns (or is expected to earn), whichever is less. If your spouse does not have any earned income but is disabled or a full-time student, your spouse will be considered to earn $3,000 a year if you have one eligible dependent or $6,000 a year if you have two or more eligible dependents. The $5,000 maximum applies to all contributions you and your spouse make to any dependent care spending account during the calendar year, whether at BP or through another employer. If you and your spouse file a joint income tax return, you may contribute up to $5,000 for the year, regardless of the number of eligible dependents you have. If you and your working spouse file separate income tax returns, the maximum annual contribution you can make is $2,500.

 

Note: When you enroll in the HCSA and/or the DCSA during the plan year rather than during annual enrollment, your contribution elections will be allocated over the remaining months of the plan year for which you are enrolling.

 

Before you decide on the amount to contribute to the HCSA and/or the DCSA, you need to consider:

• Any anticipated eligible health care expenses not covered by a health plan (if you are thinking of enrolling in the HCSA).
• Any anticipated eligible dependent care needs (if you are thinking of enrolling in the DCSA).
• Any tax considerations that could affect your decision.

Keep in mind that once you are participating in the HCSA and/or DCSA, you cannot decrease your contribution amount during the plan year. However, you may be able to increase your contribution amount or stop participating in the HCSA or DCSA if you have a qualifying status change for which such a change would be consistent.

Also keep in mind that you cannot transfer money between the accounts, this means you cannot use the HCSA to pay for dependent care expenses and you cannot use the DCSA to pay for health care expenses. 

Contribution limits and highly compensated employees

If the HCSA and/or DCSA do not satisfy non-discrimination tests, elected plan year contributions may be adjusted for highly compensated employees. If this applies, you will be notified.