Change in election

[Guest pon66]

The amount of an employers contribution to a cafetreia plan is based upon one's enrollment status ie single, family etc. If an employee changes their dependent status mid-year and immediately prior to the effective date of this change depletes their account based upon the original enrollment status (which had more $) can the employer limit or recover the excess amount that is withdrawn?

[GBurns]

I vote No. The depletion was properly made under the then applicable terms. This is just part of the "risk" inherent and necessary for FSAs etc.

[papogi]

The uniform reimbursement requirement of FSA's will still apply even if the account is funded by the employer, and they can't recoup this money from the employee. Say an employer gives 300 for single, and 600 for employee plus one or more. If an employee goes from 300 to 600, the employee has access to 300 up to the change date, then up to 600 (can be pro-rated) from the change date going forward. The grand total available to the employee would be either 600 or 300 plus the pro-rated amount. If the employee goes from 600 to 300, the employee has 600 available up to the change date, then up to 300 (possibly pro-rated) from the change date and on. Again, the total available is no more than 600. The 300 given to the employee after the change date is not in addition to the 600. If the employee only comes up with 100 in claims furing the 600 period, then he/she can still get the 300 (or pro-rated amount) with dates of service after the change date. This would be one equitable way of handling this sort of issue.

[Guest pon66]

Thanks for the replies.

What if in this case the individual purchased a significant advanced supply of presciption contact lenses just to consume the funds.

Would you still rule the same way?

[Mary C]

Yes. Its still a valid expense whether the lenses are bought for future use or current use.