Employer Contributions

[Guest moseelig]

My client gives their employees $350 each month to "shop" for benefits under the Section 125 Plan. A participant elected to use her money for health benefits for her family. Effective May 1st she will be covered under her spouses insurance, so she will drop her coverage through her employer. Now there is the employer money left, can she put that money towards the Medical FSA even though she did not elect that account at the beginning of the year, or does the employer money go unused?

[Kathy]

What does the plan say about changes in the FSA for "status change"? In my experience, the status changes that apply for the insurance elections and dependent care elections aren't always available for Medical FSA - that is, most of the plans with which I work won't allow a change to a Medical FSA annual election even though there is a change that would allow the employee to change health insurance coverage. But, the document rules!!