Why is the FRA monthly administrative fee being reinstated?
The administrative fee has always existed, but has been paid by the flexible benefits program. It covers administration for both medical and dependent care flexible reimbursement accounts, and claims processing and reimbursement among other things. The last time participants paid the fee was in 2001. Since that time, the flex program has paid the fee for participants out of forfeitures (the money left in the FRA fund due to “use it or “lose it”). Unfortunately, the forfeiture fund is depleted, and there are no remaining funds to pay the fee. While employees will now pay the administrative fee, it is deducted on a pre-tax basis.
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