Q.- We started offering employees the ability to contribute to a health flexible spending account beginning 1/1/2024. An employee just submitted her first expense reimbursement request and it is for a $2,500 hospital charge. She has only contributed a small amount to her Health FSA since it is January. Someone told us we have to reimburse the full $2,500 now and can’t wait until her payroll contributions add up to her requested amount. Is that true?
A.- Yes, it is true. For a health flexible spending account plan, the full amount of the annual election must be available as of the beginning of the plan year. This is the case even if the employee does not have contributions to fund the expense. This is one of the monetary risks an employer assumes when establishing a health FSA plan for its employees.
Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).
