Question of the Week

Posted by BAS - 09 June, 2016


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.

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