Cafeteria plans

[Guest GloriaCR]

My emplyer lost my enrolment form for our cafeteria plan, they made no attempts to track who had receaved a form much less who had turned it in. They claim I have lost the benifit because of this. lOTS OF PEOPLE NEVER TURNED IN THE FORM several peop0le do not even know it was offored.

I had trouble just getting a form human Resourse handed the form to a supervisor who threw them on a counter 4 days latter when I came to work they were all gone. HR said they had no extra and I needed to track down one on my own. I did filled it out made a photo copy and turned it in.

My election was 2500. so my tax savings would be $700. 2 weeks pay. this is real money to me.

HR says its my FAULT AND I LOST THE BENIFIT.

I have a phot copy for the form I turned in. what can I

[mroberts]

There are probably timing issues and that's why the employer isn't budging. I'm surprised they wouldn't work with you a little. But also put yourself in their shoes.....how many employees claim they turned their enrollment forms in and HR must have lost it or something to sneak one by the employer? I'm not saying you don't have a legitimate complaint, but obviously it depends a lot on if they believe you or not.

[Guest GloriaCR]

Yes, but I have a copy of the form I turned in. 2 witnessess to my turning it in 2 weeks befor the deadline and the IRS says that cafeteria planes must be offored with out discrimination to every one and they must get a form back from every one, even if I decided not to pertisipate to prove they offoered it.

The IRS says the plan is not legal if they don't document that. But they wont tell me what to do to correct it other then suing or filling a complaint that makes them take away every one else cafeteria plan at work sence it didn't meet the federal tax regulation that a tax benifit had to be offored and they had to document in writing signed dated statment form every one that they either excepted or declined the benifite.

[mroberts]

If you have a legitimate witness, then the company should work with you a little. If they won't, then I'll let one of the HR experts chime in as what to do. My thoughts would be to go over your HR person's head. I would only use this as a last resort but it doesn't sound like you're getting anywhere doing it the direct way.

[GBurns]

Your solution lies not with your HR but with the Plan Adminstrator or TPA. What has the TPA said?

The TPA or if there is none, the Plan Document provider should be willing to explain to your HR that since the benefit was not adequately offered to all eligible employees it could raise the issue of plan disqualification and disallowance. In addition the TPA or PD provider should also point out that eligible employees who are not participating should have signed a Waiver.

Either of these issues are enough of a potential problem that they should be able to easily convince HR to correct the issue very quickly.

I hope that one of our TPA experts will weigh in on this one. In the meantime take a deep breath, no one likes to help a squealer and threatening will only create obstacles.

[Guest GloriaCR]

Plan administrator says HR wont let me "change" my election for this year.

HR says Plan Administrator wont let me "change" my election for this year.

I keep telling them I want them to process my origianal election the photo copy of the election that they lost and failed to process the ffirst time. They never processed my election. I'm not asking them to change my original election. Because they lost it and never processed it this isn't a change in my election.

I have better luck trying to reason with my cat.

As any one with cats knows nothing is ever the kittys fault and if it is, its not this kittys fault,

[Guest GloriaCR]

HR told me yesterday that the Evergreen clause said they did not have to uniformily offor the plan to every one every year. The fact they could prove they had offored it to me some year in the past under Evergreen they claimed it ment they didn't have to offor it again to every one.

I had thought Evergreen only ment that if I had opted to have insurace premiums deducted before taxis they could assume I still wanted insurace premiums deducted this year. Sence a change of any kind in insurace premiums qualifies as a reason to reoppen the cafeteria plan.

People normally naturally want to make changes to dependent care and medical flexable spending acounts as children grow up or as elective surgery ect come up. So they let you do that ones each year unless there is a change in status. My understanding is applying evergreen to dependent care and medical flexable spending would mean unless you had a change in statuse you had to have the same withholding as every other year. $5000 for dependent care for your 2 year old would mean you couldn't change it the year he started kindergarden or the year he started High School unless you also had a change of statuse. That would be stuped. Medical spending if you decided you wanted lazer surgery next year tuff luck, You wouldn't be able to up your withholding if Evergreen applied to it. Which is why it was only insurace preamiums

IF evergreen applied they would also have had to withhold the same amount as last year for Medical Flexable Spending. I'm told by the plan administrator ( my pay check is one of them still missing) that they WITHHELD NOTHING for MEDICAL FLEXABLE or my INSURANCE PREMIUMS.

Plan administratior thought I had quit because of that and asked why I was turning in claim forms January 9 when I quit sence I had nothing at all being withheld.

Sence you happen to know a little about this can you tell me if they are right.

[mroberts]

I'm not at all familiar with the Evergreen Act, but all I know is that all employees are required to turn in section 125 elections from year to year. The closest to not doing so that I've seen is a printout of the previous election amounts during open enrollment in which an employee just needed to sign to continue the same amount. Even then, I would be surprised if any employee did not change that amount. Prescription costs change, dependent care costs change, vision care needs change. This is the whole reason a new election form must be turned in.

If you are not having any success with HR, you have a witness to your turning in the election form, and you have a photocopy of the form that you turned in, take it to someone above HR. I'm not sure how many employees your company has, but if HR has done as bad as a job as you've noted, I'm sure they will be more than interested in knowing that.

[GBurns]

The "evergreen clause" as I know it would keep the benefits and elections that you made in the previous year. However, you seem to be getting a run around because if they applied the "evergreen clause" that they referred to that would satisfy you because that is exactly what you seem to want. But that is not what they are doing. You need to stop screaming at them and go to a higher authority. I was hoping that one of our TPAs would have weighed in with some advice as to who this "higher authority" would best be.

Most of the plans that I am familiar with do not use this "evergreen" tactic, but instead use a default election that is prominently shown and communicated.

I suggest that you make sure whether or not your SPD and Plan Document has an "evergreen" provision or it has a "default" election. Depending on which one is really there will affect your next step.

[Guest GloriaCR]

The inrolment form I copied form a coworked did not mention any thing about a Evergreen clause. It said that it must be returned even if you are declining the benifit, check NO and sign your name and date. HR would not let me see the write up on the plan. They are still insisting that the IRS's interpratation of the federal tax laws on cafeteria plans and evergreen are wrong.

They finally told me verbably even though it was all my fault they would except the copy of my enrollment form for 2002 the one I turned in 1 1/2 weeks befor the dead line. Would not give me any thing in writing. So I'm hoping its setteled but at this point until I see it for sure I'm afraid to beleave it.

I'm holding on to my pay check for Jan 1-15 until I see proff this is setteled. Both HR and Plan Administrators had been so insistent that depositing my pay check for Jan 1-15 which was do out Jan 25 the day they discovered they had lost my form meant I was excepting this mess as is. I kept pointing out I hadn't deposited that check because they had lost it. They finally cut me a replacement check in February which list no with holding not even taxes. So Im holing on to it just in case this is not really setteled.

Even when they finally verbally agreed to correct this mess they are still insisting its all my fault, IRS is wrong and they are all right.

However just before I left the end of my week last week I went to turn something in to HR was told the entire HR department in a last minute emergency meeting, I tracked them down they were meeting with Plan administrator. I couldn't over hear much but what I did over hear was a debate over if Plan Administrators had or had not told HR they needed to track and be sure they got a form back form every one of if Plan Administrators had agreead to do that.

I had several lawyers ect. last week tell me that they were probable being so insistent that it was all my fault in hopes of bluffing me in to not reporting them. That sence they knew I had witnesses to their worst screw ups. They were probably afraid of getting fined and forced to redo the whole thing.

I have wittnesses of my asking HR for an enrolement form explaning I had never gotten one. explaning they had been passed out/ just left on a counter by suppervisor on my day off, no one had mentioned any thing to us and by the time I came back to work and found out about it no one had any left. So no one at all in my building for my shift had gotten a form from there. One person from my shift got one from HR the rest of us if we wanted one I made photo copies for them. I had wittenesses to HR telling me I needed to get the form from the suppervisor who had left them on the counter even after I explaned the suppervisor said she didn't have any couldn't get me any and had told me to get one from HR. I had the person who's enrolement forms I'd barrowed to make a photo copys for me to fill out and turn in. "Does this look like the same shade of Pink" No "is it Close enough." I also had the same two people who had walked out with me the day I turned mine in.

So maybe they were scared. They sure did not act like they were but maybe they are just good bluffers.

I am just hoping this mess is over

[SLuskin]

Gloria, how large is the company that you work for? Do they have a method of filing a grievance in your Employee Handbook?

It does not sound as if they are treating you fairly, looking at your side of the story. Many plan documents provide for "evergreen" for premiums only. I have not seen one that does so for the flexible spending accounts. And I do believe that everyone must be offered the opportunity to enroll.

Of course, you could always contact the Department of Labor, but you might want to have another job lined up in that case.

[Jbentz]

Gloria, it certainly sounds like you have had the runaround and have had horrible customer service from your HR department. For HR professionals everywhere, i can assure you we are not all like this, nor do we always try to blame the employee.

I don't know the size of your company or who in HR you have been dealing with, but in your shoes, you might want to do the following:

Wait until this is straightened up, it sounds like they are finally on the right track.

Once you are sure that your flex is correct, your taxes, etc.... then file a formal grievance per your handbook. Address the concern to whom your greivance policy states. If it is not that detailed, address it to the head of HR and their boss. Document everything, be very professional and follow the greivance policy to the letter.

Hopefully, you can sit down with them and talk to them about this and try to see each others' point of view. It sounds like you were outraged (as you should have been) and they were defensive. Take the grievance process as far as you need to be satisfied or as far as the policy lets you. At that point, hopefully you all can put this behind you.

Keep an eye on them during your next open enrollment. Have them initial your copy of everything, etc....

I am also concerned that you stated your check did not show any other deductions. Check to make sure that the rest of your benefits are in place and they have not been accidently cancelled. It is easier to check now than when you are trying to use them for healthcare, dental appointments, etc...

i am not an attorney, nor do i know what agencies outside of your employer you have to choose from if you wanted to make a formal complaint (some of that depends on your state), but i wish you well.

[Lisa Hand]

The Plan is required by law (ERISA) to give you a copy of the Plan Documents if you request them.

The use of an evergreen clause on the flexible benefits should only be done if clearly indicated during the open enrollment time that the plan has this clause and the participants are given clear indication of this and the opportunity to change. Thus it should have been on your enrollment form and if you have elections last year, and they are using the evergreen clause then they should be the same this year. (EBIA Cafeteria Legal Guide)

There is not formal guidance from the IRS on correcting errors, however, the "clear and convincing" evidence of an error along with proper documentation ususally provides the proper paper trail, especially if brought to the plan sponsors attention immediately. Both the TPA and plan sponsor should have something in place to address this. (EBIA Cafeteria Legal Guide and informal comments from Harry Beker, IRS).

Taking a deep breath, organize your documentation and maybe going to the EBIA (Employee Benefits Institute of America) web site or calling the new PWBA hotline (numebr listed under Benefits Buzz) might be helpful.