Q.- A new hire is enrolling in our health FSA. Our plan allows a contribution up to the IRS maximum of $2550. Do we prorate this amount due to his mid-year enrollment?
A.- Not unless required by your plan documents. In the absence of a specific plan provision to the contrary, a participant can elect the full $2550 no matter when in the plan year the person enrolls in the FSA. The maximum contribution amount is not prorated for an individual who has a partial year of participation due to entering the plan mid-year.