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To answer the question asked - Automatic enrollment (including EACA and QACA) is treated as a plan feature. Treas. Reg. §1.410(b)-7(c)(1) lists examples of features subject to nondiscrimination testing, and while it doesn’t name auto-enrollment explicitly, features that affect how deferrals are made and how participants participate in the plan clearly fall under this. The IRS has informally confirmed that automatic enrollment is a BRF. See, for example, the IRS 401(k) Plan Fix-It Guide, which makes it clear that when two plans exist, the availability of different features (like auto-enrollment, loan provisions, hardship withdrawals, etc.) must be tested to ensure nondiscrimination.

LTPT doesn't have the same grandfathering rule as the auto-enrollment.

Auto-enrollment doesn't mandate (in the context of an employee cannot elect out of) a specific deferral amount, or mandate a specific match formula, or mandate a specific NEC. AE also doesn't mandate a specific eligibility, vesting or benefit accrual. AE mandates a specific process for enrolling new entrants. There doesn't look like there is anything that requires BRF testing. You don't say if this was a stock or asset sale, and do seem to imply that the purchase has been consummated and the seller's plan was terminated prior to the sale. If any of this is not true, then there are other issues (such as successor plan rules, continuity of the plan sponsor...) that could factor into the decision-making.

Unfortunately, at least some of the money is gone. The health FSA rules require forfeiture of unused amounts at the end of the end of the plan year (plus any associated grace period/run-out period). The only saving grace may be the carryover. If your plan has a carryover feature (many plans do, but not all), you should have carried over the max. That carryover limit was $640 from '24 to '25. Any excess would have been forfeited. More details: https://www.newfront.com/blog/fsa-experience-gains-from-forfeitures There's nothing prohibiting having a health FSA while covered by an HDHP. It simply blocks your HSA eligibility. So it's not necessarily an employer error. You would have to look at what you elected. If you actually elected the HSA (seems unlikely, but possible), that would be quite a situation because it would be too late to make HSA contributions for prior years. Slide summary: 2025 Newfront Section 125 Cafeteria Plans Guide