can't access my FSA money...

[Guest arainchik]

Hello,

I have a question about FSA(flexible speinding account).

In year 2000 I decided to put some money to FSA. In May

2000 my company joined another one and on 06-01-2000

we switched insurance to a new insurance company and

new FSA plan.

So, by 06-01-2000 I had some money allocated in FSA, but

my major medical spendings occured in July.

New insurance company doesn't have access to my FSA money and old insurance company is telling me that

I can't use FSA money to cover copayments for services occured after 06-01-2000.

Is it true? I thought money I'm allocating my money into

FBA for the entire year. Am I wrong?

Can FSA money be transferred between insurance

companies/plan administrators?

Thank you.

-- Aleksandr Rainchik

[Guest arainchik]

And just one more question: can I move

unused money from cafeteria plan to

my 401(k)?

Thank you.

-- Aleksandr Rainchik

[Guest Benefits Maven]

Your second question first: if your cafeteria plan allows the money to be used for 401(k) then yes, you can do that - see your Benefits Department, they should be able to tell you what the plan allows.

Your first question - again, for heaven's sake, see your Benefits Department - when changing plan administrators, for whatever reason they should have transferred your account over so it could be accessed. See them asap - you are running out of time to submit claims for 2000.

[Guest arainchik]

My account was not transferred, and they are saying

they were unable to do that, and they can't do it now.

I just don't understand why. Are there any IRS regulations

preventing that or it was just my Benefits Dept mistake?

[Guest Benefits Maven]

I don't understand why either. I would certainly have communicated the heck out of this to my employees in time to let them clean up their balances if I had been involved and for some reason no transfers were going to be made. I would make a loud noise about this if I were you, especially if they did not communicate this when it was still possible to do something about it.

[GBurns]

First, are you sure that the FSA is with "the insurance company" and not with the FSA Plan Administrator or Cafeteria Plan TPA?

Second, What does joining one insurance company or another have to do with your FSA account?

Third, Is it the money that was transferred or was it the account administration?

I think that you need to talk to your Benefits Dept to get an understanding of what you really are into, then talk to the Plan Administrator.

[KIP KRAUS]

The first thing that occurs to me is that your money is not physically with the FSA it’s still in your employer’s accounting books. Therefor, if the FSA administrator can’t access it for you you should go strait to your employer and insist that your qualified expenses be honored.

This business about one insurer trying to pass the buck to another, which is what it sounds like is bushwa. It also sounds like the prior insurer is confusing FSA claims with fully-insured medical benefits. If your plan is a true FSA then the date you incur charges need only be during the plan year.

The access of your FSA money comes directly from your employer so if the new insurer (if they are the FSA administrator) should be able to request reimbursement from your employer.

Like everyone else has said, deal with your benefits administrator and not the insurers to get this straitened out.

[SLuskin]

This looks like a merger/acquisition thing to me. Did your company become part of different corporation? Is the name of your employer different now?

Whenever there is a merger or sale of a company mid cafeteria plan year, the issue of what is done with the flex accounts should be covered in the merger/acquisition documents. In addition, anything which affects the participants' accounts should be communicated to the participants by the benefits department (of either company).

Hope this helps.

[Guest arainchik]

Yes, it was a merger. Actually, my company was split into a holding of 9 small companies and then that small company when I worked was merged with outside one... And yes, name is different. I'm not sure what was written in merger documents, but I'm being told that there is Federal restriction and money from old FSA/FSB account can’t be moved to a new one.

To make things worse, I’ve just found out money was deducted from payroll, but somehow not put into FSA account.

I called FSA administrator, and they don’t have an account opened for me so they can't process my claims... There is

one more day, but it seems to me I've just lost the money.

What can be my next step? Can I ask my company to give money back to me since it has never been put into my FSA account?

[Guest arainchik]

One more thing: if FSA plan has been terminated on 6/1/2000

because of the merger, does it mean I can't use the money

for services provided same year, but after termination

date, say in August,2000?

Thank you.

[SLuskin]

At this point I would get an attorney immediately.

[Lisa Hand]

When the merger occured, was anything communicated to you about the old plan or the "new" plan. Were you given new forms to sign?

[Guest JTH]

It sounds like your old plan was terminated when the merger occurred, and you were then eligible for a new plan with the new company. If so, then your old plan would not reimburse expenses incurred after its term date. And your new plan would not cover expenses incurred before you were effective in that new plan.

If money was deducted from your paycheck and not actually contributed to the plan, that sounds like a fiduciary breach to me. I would go to Payroll and/or Benefits with your check stubs and find out why your contributions were not forwarded to the plan. (This may not have been actual cash, but at least evidence of your contributions and account balance should be forwarded so you could access it.) You should be able either to get your money back or at least have your claims honored, since presumably you did file your claims before the deadline. You may need to write a letter to the plan administrator to preserve your rights, so do that right away. Worst case, you can file a complaint with the DOL -- they'd love to hear about a company that deducts contributions but doesn't provide the coverage.

Good luck!

[Guest Benefits Maven]

If the money was no deposited into the FSA, then yes your employer should give it back. They should re-adjust your taxes accordingly.