FSA start date - always with medical plan eligibility?

Every company I'm aware of allows employees to participate in their Health FSA at the same time they become eligible for their medical plan.

Apparently, there is a company that only allows participation in the FSA effective at the start of the enrollment period after being hired, ie anyone hired in current plan year can enter the Medical plan (if eligible) but their FSA start date is 1/1 of next year.

Is there any reason this is not allowed?

Not any good ones that I can think of.

On 10/14/2021 at 6:26 PM, Bill Presson said:

Not any good ones that I can think of.

Agreed.  Although it does seem like a poor plan design from an employee relations and tax savings perspective.  I can't think of any good reason to structure it that way.