FSA and payroll deductions

[alexa]

We discovered a system glitch in which health & dependent care deductions for 2 employees stopped in September.

We discovered this during finalization of 1/1/2009 open enrollment

How do we fix this issue now that we are into another tax year?

Can we double-up their deductions in 2009 to play catch-up for the next 3 months?

Can we ask them to send a check for amount on an after-tax basis?

any other viable options?

[GBurns]

Is it worth the administrative effort to try and correct an employer error of this small size ?

Payroll deductions as per the salary reduction agreement are prospective reductions, what you are considering would be after the fact.

FSA etc contributions are supposed to be made before the expenses are incurred. To take the deductions now might be after the dact funding.

The FSA election, absent an eligible change of status/event, is for the plan year. The plan year is already over and there was no eligible change of status event.

To get the amoount in 2009, you would need either 1 short term SRA for the 2008 deficit and 1 SRA for the regular 2009 election or some sort of dual FSA. I cannot think of a rationale that would allow the short term SRA to either exist or be cancelled in a few months. I also wonder about the plan and payroll allowing 2 SRAs at the same time.

I see other problems, but I think that the above should be enough to show why it might be better to leave it alone.

[alexa]

George,

By leave alone, do you mean not have the employee make -up the payroll amounts for 2008?

I am ok it with it but need a cite as to allow this

thanks

Lexy