Calendar year med reimbursement June 30 health

[Jim Chad]

A client with a June 30 year end for health insurance has a medical reimbursement cafeteria plan on December 31 year end. He asked me if he should change the 125 plan to June 30 to match.

I can't think of a reason they need to match. Am I missing something?

[J Simmons]

The only advantage would not be dealing with any mid-cafeteria year increases in premium costs for the insurance, but if that poses no problem or challenge, then I see no need for the year ends to match.

[QDROphile]

If the plan has a medical FSA feature, the elections for the FSA often depend on the core medical coverage and cost, so it is best to have FSA elections when the core medical benefits are known.

[LRDG]

Administrators with a large block of FSA business, may find that there are advantages to having new business, enrollments, renewals, re-enrollments and all end of year reporting and testing spread through out the calendar year, versus having all FSA renewal and re-enrollment business on a calendar basis, plus a large block of new business comming on board with January effective dates.

Estimating annual co-pays limits and annual deductibles for non calendar year FSAs does require some planning on the part of FSA participants.