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Can I change my Flexible Spending Account election mid-year?

Can I change my Flexible Spending Account election mid-year?
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  • I began a new job on Oct 1, 2015. I was not participating in either an HSA or FSA before this in 2015.

    If I was enrolled in an eligible HDHP as of Oct 1, and began participating in an FSA as of Nov 1, can I make an HSA contribution retroactively (before end of Dec 2015) for 1 month - October 2015, the amount of which I assume would have to be no more than 1/12 of the annual contribution limit?
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  • A friend of mine accidentally added a zero to the end of the amount that he wanted taken out yearly for his flexible spending account and it is way more than he wanted. He didn't realize this until it started coming out of his paychecks (he has only received one paycheck so far where it was taken out). He contacted HR and they are looking into it, but weren't sure if it could be changed until the end of the year because, as they said, there may be legal issues. This doesn't seem right to me that they couldn't change simple human error. Do you know if something could be done about this?
    • Hi Mary,

      The reason why this may not be able to be changed is that FSA accounts are federally regulated. Once the amount is chosen, only a qualifying event can open it up to changes. It would be difficult to prove that it was human error and not just a change of mind if audited, and so HR may not allow the change. They have to follow the rules set by the federal government. This is not to say they won't do it, but it is why they may not allow it. Hope this helps in your understanding of the situation, and I hope this turns out favorably for everyone involved!
    • Hi Mary,

      There must be clear and convincing evidence that an error was made, which could be challenging in the situation you described (as Erin already pointed out). We've seen employers who've allowed changes in the situation you describe and we've seen employers who have not allowed it. My recommendation would be to provide as much "proof" as possible of what the intended election was and kindly ask for grace from the employer. Evidence could include previous year medical expenses that only totaled up to the election amount your friend intended to make, any kind of written communication between your friend and someone else about the election, etc. Hope this helps, let me know if you have any other questions.
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  • My husband enrolled in an FSA in Sept of 2017 while I was on another insurance with an HSA with my company. Later we realized that we could not have both and reached out to his benefit people. They provided a letter indicating that the FSA is limited to covering the employee only and not the spouse which my tax accountant believes will provide sufficient legal protection so that I can keep up my HSA. On Jan 1 of 2018 he joined my HDHP and HSA and his benefits people indicated that he would be able to cancel his FSA at that time. Now they are saying they cannot cancel it until it end in Oct. 2018. My questions are below:

    1. Can I in fact have an HSA while he has a FSA so long as the plan indicates that it cannot cover me (which should avoid the pre-deductible coverage exclusion as it is effectively limited)

    2. Since he now has new insurance is this not a qualifying event which would allow him to cancel the FSA? They let him cancel everything else.

    3. If the FSA cannot be canceled can we make his full contribution from Oct. 2018 on once his FSA has ended? I know we would have to maintain eligibility for the full year after if we make the full contribution rather than proportional.
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