FSA Health - Change in Plan design mid year - allow fsa change?

[Guest jgroves]

FSA plan year Jan to Dec. Changed Rx to three tier plan from 2 tier as of 6/1. Been told that we can allow any employee who is NOT in the FSA now to elect coverage under the FSA. For those who are IN the FSA now, they must wait to 1/1 to increase their contribution. Thoughts?

[Guest JerseyGirl]

This is a change in the insurance coverage, not the 125 plan design, and does not qualify as a change of status which would allow for changes of election. Not sure where those telling you this is okay are getting their information, but they are incorrect.

If an individual employee has coincidentally experienced a change in family status at this time, they could then make a change of election if that change is consistent with the family status change. This is the only way permitted by the IRS for election changes to take place mid-year.

[oriecat]

Yeah I agree. My matrix shows no changes allowed to the health FSA for adding or eliminating a benefit, which I think is what this would be.