Plan Transfers and Changes under Corporate Buyout

[Guest Bob123]

Earlier this year Company A purchased a 90+ person business from Company B (who has other businesses with thousands of employees.) Employees of Company A had their employment terminated by Company A on Day 1 and were subsequently hired by Company B on Day 2 – the following day. Anyone who had an FSA account with under Company A's plan was unable to make claims with its then current FSA administrator for anything after Day 1.

Q1) In doing so, can company A automatically transfer the FSA balances from the employees enrolled in FSA accounts into Company B’s FSA accounts?

Q2) If company A transfers the FSA balances and accounts, is Company B obligated to offer the same healthcare plan which the employees previously participated in (as employees' FSA contributions are based on costs from healthcare plans with a specific rate schedule and given that these balances cannot roll-over year to year as they do in HSA plans?) It just so happens that Company B’s healthcare plan has 50% higher monthly costs and nearly 300% higher out of pocket maximums.

Q3) If Company A transfers the accounts and balances, can the new employees of Company B (who had their balances transferred) be offered the opportunity to change their FSA election amounts considering the significant cost increases in Company B’s healthcare plan?

Q4) If Company B offers its new employees the option of enrolling into a HSA plan, are the employees who had FSA accounts from Company A prohibited by law from participating in such a plan? (keep in mind, these employees were unable to receive benefit from their FSA accounts for any services after the termination date from Company A on Day 1.)

Q5) If an employee of Company B wishes to no longer partake in Company B’s HC plan, can that person opt-out of the healthcare plan during the enrollment period? And if so, what if anything happens to the FSA account and balance? Would they still be obligated to make deposits into the FSA account?

Thanks in advance.