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Participant doesn't receive bill until after "run out" period


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Plan says that claims must be submitted within 45 days after end of plan year. But the provider doesn't even send bill until the end of February. Would you:

A. pay the otherwise allowable claim, as soon as possible but within 45 days of the participant's receipt of the bill

B. amend the plan (retroactively?) to provide a longer run out period

c. deny the claim, since not received  by the deadline

d. other?

P.S. - I should have put this in the original post, but FWIW, I believe the answer is "c" - as per 1.125-1(c)(5).

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I suggest you consider amending plan to provide a minimum run-out period of 90 days. The DOL claim regs do not require any specific number of days for accepting eligible claims, but do require reasonableness. A 45-day limit, IMO, does not meet the standard for reasonableness. The industry norm is 90 days, and allows reasonable time for claimant to receive bills (e.g., itemized receipts), file with primary plan, get EOB from primary plan showing remaining out-of-pocket expenses, and then file with FSA -- which is a very common scenario. 

Meanwhile the claim in question can be adjudicated past the 45-day limit. Presumably the plan already includes standard language such as "x days, or longer if events beyond the participant's control prevented the participant from meeting this timeframe." 

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The correct answer is (c). Answer (b) isn't even feasible since it would entail amending the plan in a prior plan year. Whether you allow 45, 90, or even 365 days in runoff, someone will always claim that they didn't receive the bill until after the deadline.  Harsh I realize, but you do want to keep your cafeteria plan qualified, right?

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