Flu, it’s not just *your* income that matters. It is the proportion of contributions to the DCFSA coming from HCEs and non-HCEs at your employer.

If you had a bunch of non-HCEs that stopped contributing as much (or picked up a bunch of HCEs that started contributing more, or had a bunch of non-HCEs that were using the DCFSA get bumps in salary that pushed them into the HCE category), then you’d see this.

At my company, the people with kids are well-correlated to HCEs, so when HR prepares the plan info in December, they survey people to find out if we can pass the test. The last several years, they simply havn’t offered the DCFSA since we can’t get enough non-HCEs to use it.

For non-AMT payers, I think the benefits of the DCFSA are really not significantly better than the regular tax credit option (which if I recall are generally mutually exclusive). I haven’t studied the comparison for AMT payers, but that’s like a spot where DCFSA may shine.

I dislike all the hoop-jumping and paperwork that the FSA administrators generally require, and I mentally reduce the tax benefit vs. the leg-work cost. (Mine’s a high bar though. I’ve been too lazy to file the insurance paperwork and FSA paperwork and rebate paperwork for my costco eye exam so far…. And when I do, I’ll end up with a bunch of small-denomination checks in the mail that I have to deal with….)