FSA election

[Guest Nini]

Have an employee who has been informed that job will be eliminated next year. We are in the middle of open enrollment right now and employee plans on electing full deferral of $6,000. We realize that the full amount will be available 01/01/06 and from what she has said, she plans on using the entire amount.

Is there anyway she could be excluded from participating in the plan as long as not discriminatory?

Thanks.

[papogi]

No. It’s no different than an employee who has health coverage now as a full-time employee, and plans to move to part-time in a couple months with no benefits, and has an expensive surgery in the next few days in order to get it covered by insurance. The employee is “gaming” the system in both cases, but is doing so within all applicable rules.

[Guest Pensions in Paradise]

Why are you trying to single out this one employee? What she is planning to do is no different from your prior employees who used up their FSA account and then quit mid-year.

Question to you as plan sponsor - what do you do with the forfeited amounts which are unused every year? Do you hold an employee appreciation party, or are those amounts kept in the company coffers.

[Guest gdburns]

It is amusing how many times people will allow an employer to "game" the employee benefits program, but get so upset when an employee does it.

I wonder of there will be any answer to the question about what happens to the forfeited funds each year?