Hawaii Administrative Rules
Title 14 - DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT
Subtitle 5 - STATE OF HAWAII CAFETERIA PLAN
Chapter 52 - FLEXIBLE SPENDING ACCOUNTS PLAN
Subchapter 1 - PURPOSE AND DEFINITIONS
Section 14-52-2 - Definitions
As used in this chapter, unless a different meaning clearly appears in the context:
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub, Law 99-272, as amended,
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder,
"Compensation" means wages, salaries, tips, other payments, and other earnings of a participant includible as gross income for the taxable year, "Compensation reduction agreement" means the voluntary written agreement between an eligible employee and the State in which the eligible employee agrees to reduce the employee's pre-tax compensation to obtain the benefits offered under the plan.
"Dependent" means any individual who qualifies as a dependent under section 152 of the Code (as modified under section 105(b) of the Code), "Director" means the director of the State of Hawaii department of human resources development, "Elected benefits" means the medical expense reimbursement spending account or dependent care expense reimbursement spending account, or both, selected by the participant.
"Eligible employee" means a person who is an employee of;
(1) The state executive branch; or
(2) A jurisdiction that is approved by the director to participate in the plan; and who is eligible to participate in the State of Hawaii employees' retirement system.
"Eligible medical expenses" means those expenses incurred by the participant, the participant's spouse or dependents, or the participant's child (as defined in section 152(f)(1) of the Code) who as of the end of the taxable year has not attained age twenty-seven, for qualifying medical, dental, drug, and vision services allowable under section 213 of the Code (without regard to the limitations contained in section 213(a) of the Code) and as allowed under section 105 of the Code and the rulings and United States Department of the Treasury regulations thereunder; provided that this shall not include an expense incurred:
(1) For the payment of premiums under a health insurance plan or for the purpose of cosmetic surgery as defined by section 213(d) of the Code;
(2) By the participant as a deduction in determining the participant's tax liability under the Code; or
(3) For qualified long-term care services as defined in section 7702B(c) of the Code.
''Employer'' means the State of Hawaii,
"Employment-related dependent care expenses'" means the amounts paid for expenses of a participant for those services that, if paid by the participant, would be considered employment-related expenses under section 21(b)(2) of the Code. The term generally includes expenses for household services and for the care of a qualifying dependent, to the extent that the expenses are incurred to enable the participant and the participant's spouse to be gainfully employed or to actively search for gainful employment for any period for which there are one or more qualifying dependents with respect to the participant. Employment-related dependent care expenses are treated as having been incurred when the participant's qualifying dependents are provided with the dependent care that gives rise to the employment-related dependent care expenses, not when the participant is formally billed or charged for, or pays for the dependent care. The determination of whether an amount qualifies as an employment-related dependent care expense shall be made subject to the following rules :
(1) If the amounts are paid for expenses incurred outside the participant's household, they shall constitute employment-related dependent care expenses only if incurred for a qualifying dependent;
(2) If the expense is incurred outside the participant's home at a facility that provides care for a fee, payment, or grant for more than six individuals who do not regularly reside at the facility, the facility must comply with all applicable state and local laws and regulations, including licensing requirements, if any; and
(3) Employment-related dependent care expenses of a participant shall not include amounts incurred by and paid to a child who is under the age of nineteen, a dependent, or the spouse of a participant.
"Enrollment period'* means the period of time designated by the State prior to the beginning of the plan year in which eligible employees may participate in the plan by completing the compensation reduction agreement.
"FMLA" means the Family and Medical Leave Act of 1993, 29 U.S.C. section 2601, as amended.
"Highly compensated individual" means any employee defined as such in sections 105(h) and 414(q) of the Code.
"Jurisdiction" means a political subdivision of the State, e.g., the executive branch, the department of education, the public charter schools, the University of Hawaii, the Hawaii health systems corporation, the Office of Hawaiian Affairs, the judiciary, the legislature.
''Key employee'' means any employee defined as such in section 416(i) of the Code.
"Limited rollover" means, with respect to any plan year beginning on or after July 1, 2021, an amount, not to exceed $550, remaining in a participant's medical expense reimbursement spending account at the end of the plan year, including the time allowed for processing claims pursuant to section 14-52-60(b), "Participant" means any eligible employee who participates in the plan in accordance with this chapter and section 78-30, HRS.
"Plan" means the State of Hawaii flexible spending accounts plan that includes the medical expense reimbursement spending account and the dependent care expense reimbursement spending account described in this chapter.
"Plan administrator" means the director, as provided for in section 14-52-10.
"Plan year" means each twelve-month period commencing on July 1 and ending on the following June 30.
"Qualified caregiver'* means an individual who provides employment-related dependent care services and is not: a dependent of the participant; the participant's spouse; or a child of the participant who is under age nineteen at the close of the calendar year in which the services are rendered.
"Qualified day care center*' means a day care center that provides full-time or part-time care for more than six individuals (other than individuals who reside at the day care center) on a regular basis during the participant's taxable year; receives a fee, grant, or payment for providing these services to any individual; and complies with all applicable state and local laws.
"Qualifying dependent" means, for purposes of the dependent care expense reimbursement spending account, a:
(1) Dependent of the participant, as defined in section 152(a)(1) of the Code, who is under the age of thirteen;
(2) Dependent, as defined in section 152 of the Code determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B), or spouse of the participant who is physically or mentally incapable of caring for oneself and has the same principal place of residence as the participant for more than one-half of the taxable year; or
(3) Child who is deemed to be a qualifying dependent described in paragraph (1) or (2), whichever is appropriate, pursuant to section 21(e)(5) of the Code.
"Spouse" means an individual who is legally married to a participant; provided that this shall not include an individual legally separated from a participant under a decree of legal separation.
"State" means the State of Hawaii.
"Third-party administrator" means the outside party contracted by the director to perform the day-to-day operations of the plan.
"USERRA" means the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C, section 4301, as amended.
