Health FSA Election Change

[Guest DK Ellerson]

I understand that the change to a Health FSA election must be consistent with the type of change in status event. Please advise regarding the following: Employee has a baby and wants to cease contributions to the Health FSA. Is this allowable? I thought they could elect to enroll in the Plan, or increase their current election only.

Thanks so much for all responses.

Darla

[papogi]

You are correct. It would be consistent to say that when you have a baby, health expenses would rise. You can start an FSA, or you can increase an existing FSA.

[Guest DK Ellerson]

You are correct. It would be consistent to say that when you have a baby, health expenses would rise. You can start an FSA, or you can increase an existing FSA.

Can you cease making contributions and change the annual election to the Health FSA to the amount contributed as of the date of the qualifying event?

Thanks so much.

[papogi]

No. My understanding is that this would not be "consistent" as viewed by the IRS based on the intention of the regs.

[Guest DK Ellerson]

No. My understanding is that this would not be "consistent" as viewed by the IRS based on the intention of the regs.

That is my interpretation also, just wanted to double check. Thanks for the quick response.