Uniform Reimbursement Rule and FSAs

[Guest Cgross]

I know that one of the requirements for a Flexible Spending Account is the uniform reimbursment rule requiring all funds be available for the participant at the beginning of the year regardless of the amount contributed by the employee.

What if an employee wishes to make all of his contributions at the beginning of the

plan year? My gut reaction is that this is not allowed, but was unable to find it in the regs.

[Guest bmaverick2]

Might violate the rule as it could be considered as required by employer/sponsor.

Why would participant want to prepay entire year?

[Guest Cgross]

I'm not really sure unless it has to do with payment of a bonus at the first of the year. He is the only one asking to do it.

[oriecat]

I don't personally recall ever seeing a regulation that stated that the employee contributions had to be contributed equally over the plan year. What does the plan doc say?

Our plan doc basically says it's pro rata for the plan year, but there is an additional section where the employer can implement a non pro rata contribution schedule, as long as it doesn't relate in any way to how benefits are being paid out.

[papogi]

The regs don't prevent this, but if this employee terminates in the middle of the year, the employer will need to return a pro-rated amount to the participant. An employer may want to disallow an up front contribution simply to get around the administrative task of having to return amounts to terminating employees.