FSA "Taxable Year"

[Guest djw]

Assume a health FSA operates on a year of Feb. 1, 2010 to Jan. 31, 2011 (so employee salary reduction elections were made prior to PPACA), it files its 6039D information on that basis, and would report any discriminatory benefits for key employees or highly compensated employees as of the year ending 01/31/2011. Assume further that some participants file for bankruptcy during 2010, so their taxable years are not necessarily a calendar year. When does the restriction of new IRC section 125(i) become applicable so as to prohibit reimbursement for over the counter medications in "taxable years" beginning after 12/31/2010?

Thank you in advance for your replies to this question.