Can FSA limits be set by HR Staff

[TPApril]

This question was posed to me but this is not my area of work:

Participant submitted request for $1,000 for 2012 flexible spending. HR told her it wouldn't round out correctly at 24 payrolls (41.67 * 24 = $1,000.08). HR told her she needs to submit a round number and made her fill out $40.00 for total of $960.00. Is there an issue here?

The same HR btw did not inform those ee's who did not participate in 2011 of their option to participate in 2012. Any issue here?

[MARYMM]

This question was posed to me but this is not my area of work:

Participant submitted request for $1,000 for 2012 flexible spending. HR told her it wouldn't round out correctly at 24 payrolls (41.67 * 24 = $1,000.08). HR told her she needs to submit a round number and made her fill out $40.00 for total of $960.00. Is there an issue here?

The same HR btw did not inform those ee's who did not participate in 2011 of their option to participate in 2012. Any issue here?

#1 - The payroll software may be able to stop the withholding when it reaches $1000.00. If it can't, why not let the employee elect $1000.08 ? maybe employer has a $1000 limit ?

#2 - All employees should have been told about open enrollment for this benefit . Not sure what the penalties for non-compliance with plan document are.......

[Guest morris]

#1--What does the SPD state? If there's nothing in it about "round number election requirements" then there might be an issue. The documents (and enrollment materials) may be stating one thing, and a payroll person stating another.

#2--All eligible employees are supposed to be advised annually of their rights under a 125 plan.