What happens if there are not enough claims to use up elected benefits for the Plan Year?
They will be forfeited to the Employer to be used to pay Plan fees (if elected in the document). This is why it very important to calculate the amount in which to be set aside to use. The IRS regulation governing this procedure has been changed to allow an Employer to amend their Cafeteria Plan to allow and additional 2 months after the Plan Year-end for claims from the previous year. This change can only be effective with a Plan amendment. Please refer to your Plan Document or Summary Plan Description, or call our office for assistance.
Related Questions
- I elected to contribute $100 per month or $1,200 for the plan year into a medical expense FSA. If I have $100 in my account in September, but incur a $300 expense, how much can I be reimbursed?
- What happens to any unused contribution? Why can the participants get a refund of their unused contributions at the end of the Plan Year?
- What happens if there are not enough claims to use up elected benefits for the Plan Year?
