Flex Plan

[Guest bostonborn]

OK I was totally dumb, and I didnt get it. I signed up for a flex plan (medical) with my new employer. when I calculated the amount I wanted to contribute, I thought it was for the whole year (not just the amount I would spend from the time I was eligible). Anyway, when I found out that I was wrong, I then thought I was ok because we have 60 days after the plan year to put claims in. What I didnt realize (and found out today) was that you had to have the services that you are submitting done before the end of 2005, you can only sumbit them for the 60 days after the plan year.

I now have a ton of money that I guess I am about to lose.

Is there anything I can do? I so regret putting money away now. What a waste.

[leevena]

My suggestion would be to review a list of all the eligible expenses that you fsa covers. Then review your past year and see if you have missed anything. You may be suprised at what you can have run through your plan.

Good luck.

[Guest kevkor]

OK I was totally dumb, and I didnt get it. I signed up for a flex plan (medical) with my new employer. when I calculated the amount I wanted to contribute, I thought it was for the whole year (not just the amount I would spend from the time I was eligible). Anyway, when I found out that I was wrong, I then thought I was ok because we have 60 days after the plan year to put claims in. What I didnt realize (and found out today) was that you had to have the services that you are submitting done before the end of 2005, you can only sumbit them for the 60 days after the plan year.

I now have a ton of money that I guess I am about to lose.

Is there anything I can do? I so regret putting money away now. What a waste.

Check with all your providers and get copies of every service. You never know what you could find, especially OTC drugs and supplies.

[Guest bostonborn]

ugg..I cant find anything. I found one $25 copay. I am sure I bought my kids tylenol and stuff, but of course I dont have receipts anymore.

My husbands doctor has prescribed swimming for his knee injury...can we use the gym expenses? The only thing is, we paid for the entire year in January, and I wasnt in the flex plan until September.

this is so aggravating. $500 down the drain for no reason at all.

[Appleby]

What I didnt realize (and found out today) was that you had to have the services that you are submitting done before the end of 2005,

I could be wrong but…isn’t there an extension, beginning 2005, that allows claims for expensed incurred through March 15 of the following year?

[Mary C]

You are partially correct Appleby. A revenue ruling did come out that a medical FSA could be amended to include expenses incurred for 2-1/2 months after the end of the plan year (3/15 if the plan year is also a calendar year - ours isn't). But it was optional for the plan sponsor to adopt the amendment. From what I've observed, many companies, including ours, did not adopt an amendment to do so.

[GBurns]

Technically your FSA should really covered "incurred" expenses and not only "paid" expenses. Incurred means creating the liability even if you have not yet been billed and have not yet paid. But that depends on how your plan is actually worded, it does not have to use the same wording as the Treasury Regulations.

With the swimming expenses, try to get them to pay the pro-rated amount, that is for the months during which you were on the plan. It might work, you will not know unless you try.

Do not wait until you have as much as possible to send in. Send in as you find them. Then appeal as necessary.

As for receipts, Do you have the credit card statement etc? That might be acceptable for some items, although most OTC might not be covered anyhow.

I am not sure that I understand what created your "confusion", but if you joined in, let us say, July, there should have been no way that you should have thought that it covered you for periods before July and I cannot see why you would have contributed an amount that included periods for which you were not doing any payroll deduction. Many forms have not only the amount per pay period, but also the annualized amount, so as to avoid as much confusion as possible. I suggest that you recheck the forms and salary reductions. There is an outside chance that you might have been misinformed and mis-enrolled, and if so your plan sponsor might accept this situation as an administrative error. You never know.

[Guest bostonborn]

I didnt really get anything but a form. No explanation or anything. We are a really small company.

I thought that the deduction was a yearly estimate, and I could deduct anything in the year. Also, I was told verbally that I could submit stuff up to two months after the year ended, I just didnt think to ask about when the services had to be done, I just assumed I could use it up to February of the next year.

One more question...I have about $250 in dental bills for my kids from August. I actually enrolled in August, but my employer forgot to start deductions for me until mid September. My form is dated in August. So, maybe I could use the August dental bills??? They asked me if I wanted to "make up" the deductions from August, and I said no...it was too big a hit all at once. Hope that does not kill me now...

any thoughts on this idea?

We are a really tiny employer, my employer had no bad intentions..it was busy season when I was hired, the place was nuts..I dont blame anyone, I just need an out!!!

[jsb]

I think GBurns is on track suggesting that they might consider making an administrative correction based on mis-information. This looks to me like your only way out, but it's at best a marginal hope. Get a copy of the plan document and study it. Put your request to rescind your election in writing, and be really nice about it. (Plan administrators have to deal with lots of cranky people who are mostly mad at their own screw ups and think they can bully their way through. It is refreshing to deal with a reasonable, polite person - it makes you want to help.) Probably base the request on rush to enroll, lack of clarity of materials (eg. your thinking that it was a FULL ANNUAL AMOUNT, this might at least get you a partial pro rate), or similar, but keep it objective and cite any plan provisions sections of informational or enrollment materials that you feel are unclear and led you astray. "In retrospect, I made a mistake" might be the bottom line, but it won't cut it. You need to give them something to hang their hat on that you might have relied on something you were told, to your detriment. It's worth a try. But in the end if it doesn't work, your $500 really only cost you a little over $300 because of the taxes you would have paid had you not made the election at all (and you would have had to pay much more than $350 for the education you have received about how cafeteria plans work!); and if a $350 mistake is the worst you ever do in life, you'll be way ahead of me! But especially, keep using the plan and you will reap the tax savings for year to come, and more than recapture this year's loss. Good Luck!

[jmor99]

What was the effective date in the plan, for you? Only those expenses with a date of service after the effective date are eligible. The eligibility waiting period will be stated in the summary plan description. (You did get one?--another potential employer error).

[Guest Nini]

ugg..I cant find anything. I found one $25 copay. I am sure I bought my kids tylenol and stuff, but of course I dont have receipts anymore.

My husbands doctor has prescribed swimming for his knee injury...can we use the gym expenses? The only thing is, we paid for the entire year in January, and I wasnt in the flex plan until September.

this is so aggravating. $500 down the drain for no reason at all.