Medical FSA - Election Change

[Guest MEJ]

I'm having a difficult time tracking down definite guidance on this scenario:

EE contributes to health FSA $500. EE's spouse gives birth in October, and elects to increase his FSA election to $3,000. We received claims in excess of $500 election for services prior to October, and subsequently denied them. The sponsor believes we did not adjudicate these claims properly.

I believe 1.125-2(b)(3) applies: "Election changes to increase or decrease the level of coverage under a health FSA during the 12-month period of coverage are not permitted with respect to health FSAs. However, a cafeteria plan may permit participants to make health FSA election changes for the remaining portion of the 12-month period of coverage on account of and consistent with certain family status changes."

Any assistance would be appreciated.

Thanks.

[Guest Kristine]

From my experience ( 6 years), you have adjudicated the claims correctly. He elected to make a change in October, the chage is not retroactive it is going forward from the date of the change.

I'm having a difficult time tracking down definite guidance on this scenario:

EE contributes to health FSA $500. EE's spouse gives birth in October, and elects to increase his FSA election to $3,000. We received claims in excess of $500 election for services prior to October, and subsequently denied them. The sponsor believes we did not adjudicate these claims properly.

I believe 1.125-2(b)(3) applies: "Election changes to increase or decrease the level of coverage under a health FSA during the 12-month period of coverage are not permitted with respect to health FSAs. However, a cafeteria plan may permit participants to make health FSA election changes for the remaining portion of the 12-month period of coverage on account of and consistent with certain family status changes."

Any assistance would be appreciated.

Thanks.