BN - UW FSA/LPFSA Qualifying Event Process
This business process outlines the procedure for making a change to an employee's FSA election during a qualifying event.
Employees can change their FSA elections only under limited circumstances as provided by established IRS guidelines.
The Change of Election form is to be used by employees to enroll in (if not already enrolled), or make changes to their Medical, Dependent Care, or Limited Purpose FSA annual elections within 30 days of a qualifying life event. It is the institution’s responsibility to review and approve/deny the request based on IRS guidelines, using the Qualifying Event Matrix.
This business process outlines the procedure for making a change to an employee's FSA (Flex Spending Account) election during a qualifying event. If you need to enroll a new employee in FSA, visit BN - UW FSA/LPFSA New Hire Enrollment Process.
- Employee provides a completed Change in Election form to a campus administrator.
- The Service Center sends an eligibility file to TASC.
- Applications must be submitted within 30 days of the employee's qualifying event.
- If the employee is enrolling in the Limited Purpose FSA (LPFSA), verify in HRS that the employee is enrolled in the HDHP & HSA plans first. If the employee is not enrolled in these plans, they are not eligible for the LPFSA. Check with the employee to see if they meant to enroll in the medical FSA plan instead.
- P&T=Parking and Transit
1. Receive FSA Change in Election form within 30 days of a qualifying event.
2. Review the Qualifying Event Matrix to determine if the qualifying event is valid. Request additional information from employee if you need more information to determine validity.
- For example: Employee checks “Change in Employment Status." You can request more information regarding the change—is it increase/decrease in FTE? You can also confirm with the department.
- If the Qualifying Event is NOT valid: Institution notifies the employee. Process end.
- If the Qualifying Event is valid, confirm that the change is consistent with the event. (Election change(s) must be consistent with the qualifying life event. Ex: If you get married or have a child, you can enroll in or increase your election, but not decrease. In the case of divorce, you can increase/enroll if you become main caretaker of the child. If a child no longer qualifies as a dependent, you can decrease your election, but not increase. See matrix for more guidance.)
- If enrolling, make sure employee is eligible for the plan (Ex: LPFSA, can only enroll in this if they are enrolled in HDHP & HSA).
- If changing election, make sure employee is already enrolled in the plan (Ex: employee enrolled in Medical FSA should not have a change indicated for LPFSA plan).
4. Enter the FSA Enrollment/Change into HRS by end of day Tuesday for inclusion in the Wednesday file that the Service Center sends to TASC to ensure employee will be enrolled at TASC in a timely manner.
- Change is effective the first of the month on or following the qualifying event date, EXCEPT for birth/adoption (change is effective the day of the qualifying event).
- Use effective date as the FSA or ADM event.
- 9-mo employees: make sure to override and divide the annual election over the remaining pay periods in calendar year. Make sure to subtract any deductions already taken. This assumes they are returning in the Fall. FSA deductions are not taken on summer session or summer service appointments.
- Examples: Employee’s FSA coverage begins 4/1/16 and elects $500 annual contribution. You will need to override and divide the $500 over 5 months (April, May, September, October, November deductions). Employee's annual election was $500. Effective 4/1/16 the employee changes the annual amount to $650, but has already contributed $200. Divide the remainder, $450, over 5 months (April, May, September, October, November deductions) and enter the override into HRS.
6. File the form in the employee's benefits file.
- If an employee decreases their annual election to be equal to what they've already contributed, they will be allowed to incur expenses up to the new, reduced annual election amount through the end of the plan year.
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