2014 Health FSA Changes

[Flyboyjohn]

In order to offer a compliant health FSA in 2014 is it enough that the FSA participants be offered ACA compliant group coverage or do they have to actually be enrolled in the group coverage?

[masteff]

IRS Notice 2013-54 and DOL Release 2013-02 use the term "makes available" under question 7. But you should read it yourself to make sure it actually answers your specific question.

http://www.irs.gov/pub/irs-drop/n-13-54.pdf

http://www.dol.gov/ebsa/newsroom/tr13-03.html

[Clarifying Health]

Also, here's a helpful overview of the changes to FSAs (and other "account" based health plans) in 2014.

[bcspace]

In order to offer a compliant health FSA in 2014 is it enough that the FSA participants be offered ACA compliant group coverage or do they have to actually be enrolled in the group coverage?

An employer has to offer it (and should offer it every enrollment period) but an employee does not have to elect it. Eligibility for it must not be more strict than the eligibility requirements for the Health FSA.

However, I have further questions:

I'm under the impression that employers with under 50 employees are exempt from this 'Availability Condition' (to offer group coverage for a Health FSA to be an 'excepted benefit') or at least not required to do so until 2015 or 2016. Is either the case?

Also, could someone help me understand the Maximum Benefit Condition? Under what circumstances would someone exceed 2 times the annual salary reduction much less 1 time (except for carry over of course)?