Late submission of reimbursement claim permitted?

[Guest Wexford]

We have a plan that requires employees to submit claims for reimbursement within 90 days of the end of the plan year, June 30. We sent a notice on June 15 informing employees of the approaching end of the plan year and that they should review outstanding balances and spend where possible to ensure they do not forfeit any of their plan elections. We sent out nothing before the end of the 90 day claim submittal period.

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The employee submitted a claim for reimbursement 120 days after the plan year. We rejected the claim as it fell outside of the reimbursement period. Although the plan description given to all employees at the beginning of the plan year describes the 90 day claim submittal period he is asking for an exception. He claims that the form used for submitting claims does not mention the 90 day limit and that no reminder email was sent.

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1. Can we make an exception for the employee? Does the IRS code prohibit this (which number)? Any idea what the penalty would be if we made the exception?

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2. Do we have any obligation to inform employees that the reimbursement period is ending?

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3. As we sent a reminder before the end of the plan year but sent nothing before the end of the 90 day reimbursement window are we potentially liable?

[KIP KRAUS]

Are there mitigating circumstances, i.e., does the employee not read, was the employee unconscious for 120 days, did the employee’s dog eat the original paperwork, is this a responsible employee in all other respects, does the employee have an advisor that didn’t advise him/her?

The plan is what the plan is and it states what the perimeters are. Maybe he/she should get his/her TS card punched and chalk it up to a responsibility lesson.

[Kirk Maldonado]

Doesn't the SPD mention the deadline? If it does and the employee was given the SPD, I agree with Kip Kraus.