(a) Benefits available for selection by participants. A participant may elect, in accordance with the procedures set forth in this section, one or both of the following benefits, subject to all the requirements and conditions contained in these rules: (1) health care reimbursement plan;(2) dependent care reimbursement plan.(b) Health care reimbursement plan. (1) General purpose health care reimbursement account. Pursuant to the health care reimbursement plan, a participant may elect to receive reimbursements of certain health care expenses which are excludable from the participant's taxable income. The general purpose health care reimbursement account is intended to be qualified under the Code, §105, is an optional benefit under the flexible benefits plan, and constitutes a separate written employee benefit plan as contemplated by the Code, §105, and Treasury Regulation 1.105-11.(2) Maximum benefit available. Subject to the limitations set forth in these rules, hereafter referred to as the plan, to avoid discrimination, the maximum amount of flexible benefit dollars that an employee may receive in any plan year for health care expenses under the health care reimbursement plan is the amount permitted under the Code, §105. Even if permitted under the Code, in no event shall the amount available exceed $5,000 in a plan year. An employee may prepay the health care election amounts for the remainder of the plan year in anticipation of termination, retirement, or a period of leave without pay.(3) Limited purpose health care reimbursement account. An employee who elects to participate in a consumer directed health plan with a health savings account as permitted by Subchapter J, Chapter 1551, Insurance Code, may elect to participate in a limited purpose health care reimbursement account. This limited purpose health care reimbursement account may only be used to reimburse eligible dental and vision care expenses incurred during the benefit plan year or permitted carryover period. The limited purpose health care reimbursement account is intended to be qualified under the Code, §105, is an optional benefit under the flexible benefits plan, and constitutes a separate written employee benefit plan as contemplated by the Code, §105, and Treasury Regulation 1.105-11.(c) Dependent care reimbursement plan. (1) Pursuant to the dependent care reimbursement plan, a participant may elect to have payments made or receive reimbursement for dependent care expenses. The dependent care reimbursement plan is intended to be qualified under the Code, §129, is an optional benefit under the flexible benefits plan, and constitutes a separate written employee benefit plan as contemplated by the Code, §129.(2) Maximum benefit available. (A) Subject to any limitations imposed by these rules, hereafter referred to as the plan, to avoid discrimination, the maximum amount that an employee may receive in any plan year in the form of payment of or reimbursement for dependent care expenses under the dependent care reimbursement plan is the lesser of:(i) the employee's earned income for the plan year (after all reductions in compensation including the reduction related to dependent care expenses);(ii) the earned income of the employee's spouse for the plan year; or(iii) the amount permitted under the Code, §129. Even if permitted under the Code, in no event shall the amount available exceed $5,000 in a plan year.(B) In the case of a participant's spouse who is a full-time student at an educational institution or who is physically or mentally incapable of caring for himself, such spouse shall be deemed to have earned income of not less than $200 per month if the participant has one dependent and $400 per month if the participant has two or more dependents in accordance with the Code, §21.34 Tex. Admin. Code § 85.5
The provisions of this §85.5 adopted to be effective August 12, 1988, 13 TexReg 3754; amended to be effective September 28, 1989, 14 TexReg 4787; amended to be effective September 1, 1990, 15 TexReg 4646; amended to be effective September 1, 1991, 16 TexReg 3779; amended to be effective September 1, 1992, 17 TexReg 2874; amended to be effective September 1, 1994, 19 TexReg 3765; amended to be effective February 12, 1998, 23 TexReg 1313; amended to be effective September 16, 1999, 24 TexReg 7276; amended to be effective July 10, 2000, 25 TexReg 6557; amended to be effective July 17, 2003, 28 TexReg 5539; amended to be effective May 29, 2005, 30 TexReg 3022; amended to be effective December31,2007, 32 TexReg 10054; amended to be effective June 13, 2011, 36 TexReg 3596; Amended by Texas Register, Volume 41, Number 23, June 3, 2016, TexReg 4045, eff. 6/6/2016