Claims incurred prior to a change in status

[Guest DK Ellerson]

If an employee gets married in the middle of the year, and chooses to increase their Health FSA annual election, can that employee be reimbursed for claims incurred prior to their change in status? Does anyone know where I might be able to get some sort of definitive information I could refer to regarding this topic?

Any all replies are greatly appreciated. Thanks.

[papogi]

The employee can still be reimbursed for charges prior to the wedding, but only up to the annual election which was in effect at the time (the amount prior to the increase). The employee can’t have access to the new increased amount with dates of service prior to the wedding. That would be a retroactive election with “known” claims, and that is not allowed, as there is no risk shifting when claims are known. Also, assume an employee originally elected $1000 for the year, then increased it to an annual election of $3000 after the wedding. If the employee used the entire $1000 with dates of service prior to the wedding, there will only be $2000 for dates of service after the wedding. In other words, the employee doesn’t get $1000, and then $3000 in addition ($4000 total). The employee only has access to the annual amount that payroll will deduct.

[oriecat]

Well stated papogi. I was trying to figure out how to phrase it all...

Also any claims for the spouse would also have to be incurred after the date of the status change.