Deceased Participant w/FSA balance

[Guest Mitzi Jean]

FSA participant wanted to know, if she dies, what happens to her FSA balance. She has no spouse or children, no blood relatives, and intends to appoint someone executor of her estate or beneficiary. She wants this elected person to be able to get reimbursement for expenses incurred prior to her death. The kicker is that she wants us (the tpa) to come up with a Beneficiary form (of sorts) that will insure reimbursement of the FSA balance. I would think that the Plan Administrator (her employer) would have to include some sort of exact blurb in the plan doc. Or, maybe this would be something her Attorney would have to handle through her estate or will provisions. Hope this all made sense and that someone can give me some ammo for this dilemman so this gal can rest easy that her pittance will not be forfeited. Aarghh! Thank you so much!

[QDROphile]

An expense is not eligible unless is an expense of a dependent.

[oriecat]

I believe she is talking about expenses of the deceased participant? So basically can someone who is not the participant submit claims on their behalf when the participant has died, so that the eligible expenses can be reimbursed to the estate?

[Guest Mitzi Jean]

I believe she is talking about expenses of the deceased participant? So basically can someone who is not the participant submit claims on their behalf when the participant has died, so that the eligible expenses can be reimbursed to the estate?

That is exactly what I meant to say -- sorry for the confusion.

[LRDG]

Legal documents involving employee benefits typically include standerdized language regarding employee wills, estates and executors, and circumstances when the plan can treat an individual as an executor when no formal designation or estate exists.

I don't know who your service agreement designates as responsible or if the service agreement covers this, but either the TPA or the plan sponsor is responsible for directing the participant to the particular section of the plan document and providing a copy, in order for participants to get their will in order and necessary documents to reassure participans that their FSA funds will be used according the the wishes of particiants to pay qualified expenses and avoid risk of forfeited in event of death.

Establishing a will, designating an executor, providing the executor with legal proof for the plan to follow is the particiapnt's responsibility. The plan document need only state that the plan will follow the participant's wishes, and how the plan will handle FSAs in the absence of a designated executor.

[Guest Mitzi Jean]

Thanks so much for your help! I think your answer was right on the money with regard to the scenario I tried to explain.

[GBurns]

Remember that getting the expenses reimbursed is not the end of the issue.

When the expenses are reimbursed, the check will most likely be in the name of the FSA participant, now deceased. The "executor" will have to have either prepared a way of cashing the check or have an acount in which to deposit the check drawn to the deceased person.