Wellness incentives contributed to a health FSA

[tsrl01]

I am trying to figure out whether it is acceptable to contribution wellness incentives into an FSA for an employee... The situation would be that once an employee completes an HRA, the money would be contributed to a health FSA for the employee's use. Is this acceptable?

I am also curious as to the logistics - the employee elects $1000 for the year for FSA contributions, on March 2, earns $100, so the employee simply now has $1100 available? The intent is to make it the employee's option - take the money in cash or let them elect to put the money in an FSA.

Thank you

[SheilaD]

I only have anecdotal information. My husband works for a large corporation. They are offering a wellness incentive. The election forms are clear that you elect the amount to be withheld from your pay and if you meet the incentive requirements and additional X will be deposited into you FSA. There is no cash alternative - but the flex plans offers a "credit card" to use for covered expenses so it works fairly well.

[tsrl01]

Thanks for your response Sheila - so, if your husband satisfies the wellness condition, the company automatically puts that in his FSA - effective for use as soon as he satisfies the requirement?

Thanks again!!

[SheilaD]

Thanks for your response Sheila - so, if your husband satisfies the wellness condition, the company automatically puts that in his FSA - effective for use as soon as he satisfies the requirement?

Thanks again!!

Yes - in fact the wellness condition has to be satisfied in the prior year and the credit is "deposited" on the first of the new year. He is currently in the process of meeting the condition for 2009. When we receive our benefit election forms in December of 2008 (for 2009) it will state that he has the credit already and that he should take that into account in making his elections.