Guest sidalee1 Posted October 28, 2011 Share Posted October 28, 2011 We are in the process of acquiring the assets of a company which sponsors a health flexible spending account. We plan to transfer the accounts of the participants to our plan. Unfortunately, the selling company's plan is not a calendar-year plan year while ours is... how exactly does that work? The way I read the Ruling, the transferred participants utilize the remaining balance for the remainder of our plan year, so if they come in 1-1, they have until 12-31 (not 4-30 which would be the end of the prior company's calendar year). The sale itself is not a change in status, so unless the participants otherwise have a status change, they will be unable to adjust the amounts in their flexible spending account. The fact that the selling company's plan year is not a calendar year plan is throwing us for a loop on how logistically we get this accomplished. Any insight would be appreciated! Link to comment Share on other sites More sharing options...
Guest morris Posted November 10, 2011 Share Posted November 10, 2011 So it sounds like the new employees have your whole plan year (calendar year) to draw down their old FSA accounts. Won't they have the opportunity to also make an election under their new (your) FSA plan. In other words, they'll be participating in two FSAs. I don't see a problem with that. They'll have two separate plans with different plan numbers. Link to comment Share on other sites More sharing options...
SLuskin Posted November 22, 2011 Share Posted November 22, 2011 Could you not let them finish their plan year, and then become newly eligible for yours? It would be mid year but that should comply with both sets of plan documents. Link to comment Share on other sites More sharing options...
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