What are the Rules for an FSA plan?
The Rules for an FSA plan:
- The choices you make have to be made prior to your effective date on the Plan.
- If you do not have services rendered within the plan year that will allow you to use your spending account funds, you will lose those funds. IRS regulations allow an additional 2 1/2 months to spend the funds remaining in your account if permitted by your Plan Document. Any funds left after that period will be forfeited.
- There can be NO change for a Plan Year without a life-changing event. You
will have the opportunity to change your elections annually, prior to each
year. (Note, your Health Care FSA account can only be changed annually
regardless if you have a life-changing event unless specifically permitted by
your Plan Document.)
Life changing events are defined by the IRS as:
- Your marriage
- Your divorce or legal separation
- Birth or adoption of your child
- Death of spouse or dependent
- Termination of your dependent relationship
- Change of job status by you or your spouse
- Significant changes in coverage or premium
- A Qualified Medical Child Support Order (WMCSO)
- Entitlement or Loss of Medicaid or Medicare Coverage
- Change in Residence (out of area)