Flexible Spending / Marriage

[Guest dave]

Withing 30 days of marriage, I understand my wife can alter her contributions to her flexible spending account.

Previously, it had been zero. If she now contributes, can that money count towards her own medical expenses incurred prior to the actual date of marriage?

[Sandra Pearce]

No, you can not make a retroactive election. The money in the FSA will only be available as reimbursement for future expenses.

[Guest timb]

Similar question here. (I've gotten different answers at various seminars.)

Facts:

A married couple are contributing to a health FSA, then increase their deferral due to the birth of a child on July 1. Assume the original election was for $1,000 and the new election will result in a total of $2,000 being contributed for the plan year.

1) Would the couple's reimbursed expenses incurred prior to the birth of the child be limited to $1,000? Would the second $1,000 only be available to reimburse expenses incurred after the change in status?

2) Put another way, would the mother's health care expenses related to the birth of the child (which would occur prior to the change in status, albeit on the same day) be reimbursable up to the full $2,000, or would they be limited to $1,000? Arguably, the birth expenses are the child's expenses as well.

It could be a recordkeeping nightmare if employers are required to bifurcate the plan year and track who is eligible for what level of reimbursements at various points during the year. Multiple changes in status are possible during a plan year (i.e. employee gets married in Feb., has child in Nov., and changes the FSA election each time).

[SLuskin]

The software that we use tracks that. Otherwise, it would be a nightmare, and yes, you expressed the concepts correctly.