Guest Kristine Posted May 9, 2006 Posted May 9, 2006 Is it possible to start a FSA plan mid-month? WOuld it have to end on the last date of the month?
papogi Posted May 9, 2006 Posted May 9, 2006 Are you talking about implementing a new flex plan, or just adding a participant to an existing one? If this is a flex plan that already exists, the answer should be in the plan doc as to the effective date for adding participants to the plan who have experienced some sort of qualified status change. If you are talking about implementing a flex plan, that can pretty much be done anytime. You need a flex plan doc, etc., but there is nothing in the regs that says that it must start on the first day of a month. And no, it doesn't have to stop on the last day of a month. It's certainly easier from an accounting side of things to have the beginning and end of a flex plan year coincide with the beginning and end of months, but your flex plan year can be any 12 month span of time.
GBurns Posted May 9, 2006 Posted May 9, 2006 If a new plan, make sure that it starts before the payroll deduction. Other than that papogi said as much as can be said. George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
Guest Kristine Posted May 9, 2006 Posted May 9, 2006 The first payroll was on May 5th... If a new plan, make sure that it starts before the payroll deduction. Other than that papogi said as much as can be said.
GBurns Posted May 9, 2006 Posted May 9, 2006 But when was the FSA effective etc? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
Guest Kristine Posted May 9, 2006 Posted May 9, 2006 the plan was to start on 05/01/06. We called, sent emails and got no response... now they contact us and want to start a plan mid-month... quote name='GBurns' date='May 9 2006, 10:25 AM' post='132466'] But when was the FSA effective etc?
jmor99 Posted May 10, 2006 Posted May 10, 2006 Yes, you can start mid-month. You might want to start May 15th, for example, and end the plan on 12/31. Your plan's first plan year would be a short plan year. Generally, FSAs work best on a calendar year since most insurance carriers tabulate deductibles etc on a calendar year.
GBurns Posted May 10, 2006 Posted May 10, 2006 What bothers me is the wording used. The plan starting date does not seem to be differentiated from the plan's effective date and it seems uncertain if the distinction is made between the start of payroll deductions and both the plan starting date and the plan's efective date. I now wonder if there was an adoption date? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
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