DCA mid year election

[Guest jgroves]

Employee's spouse has DCA through her job, $5,000 for the year. However, she quits as of 6/1. She has submitted $2,000 and been reimbursed that amount BUT has submitted invoices for $3,000. Employee enters into DCA through his employer and wants to get that $1,000 covered. Now, the Employee can't do this because the invoice for services was before he was a participant in his plan.

The question is, can the qualifiying event that allowed the employee pick up the DCA be when he knew his wife was going to quit rather than her actual term date? If that was the case, then he could have covered at least part of the last invoice. Thoughts?

[Guest llerner]

The husband cannot be reimbursed for DCAP service dates prior to his entry date in the Plan.

[oriecat]

The question is, can the qualifiying event that allowed the employee pick up the DCA be when he knew his wife was going to quit rather than her actual term date?

I think that you have to go not by either of those dates, but by the date that she lost coverage under the plan. His enrollment would then be governed by the terms of his plan doc, such as in my plan, it would be the first of the month following application to enroll.

[Guest JerseyGirl]

I agree with oriecat, but have a few additional questions.

Is it safe to assume that the wife has either quit job at Employer A to take a job offer with Employer B, or is job hunting, thus allowing the family to qualify for continued participation in either spouses DCA? Should that be verified in some manner? Also, it seems to me that if they have had $3000.00 in child care expenses in the first 6 months of the year, they are going to have at least $1000.00 of expenses that could not go thru the DCA anyway, because their expenses are greater than the maximum allowable by the IRS. Does it really make that much of a difference if the ineligible expenses occur now or December?

[g8r]

The answer to the initial question is you can't have a change in status based on an anticipated event. The event must occur.

Also, even if this were allowed, arguably the husband didn't elect to be in the plan until after the even so the prior expenses wouldn't count anyway (as already pointed out by others).

[Guest jgroves]

Good points, thanks. Just for clarification, spouse outright quit. From what I was told from the employee, spouse had every intention on working when she signed up for her DCSA in January so the employee had no need to join our DCSA. She had put in under the $3,000 so she was only reimbursed what she had put in. I can't change the rules, but it sure seems like there should be someway for the extra $1,000 to be covered. It was all allowable and there was obviously no intention to abuse the system. Especially since most plans, if not all, do not allow employees to prefund their DCSA (put in more than the equal payments). Had they been allowed to do that, the employee could have at least kept up with the charges and this situation never would have occured. Hmmm. Thanks all for your responses.