Flexible Spending Account Q.

[skipdaniel]

This is in Illinois.

My employer offers a flexible spending account, where I pay into an account pretax and can make withdrawals for qualified expenses. You can opt into the plan either at the beginning of the year or after you have a qualifying life event. Well we had a baby midyear so I elected to put aside some money to pay for.....having the baby . The bill from the hospital has a range of dates from one day before having the baby to several days after having the baby. Since the bill service date range starts one day before, the benefits department is denying me my withdrawal based on the service dates beginning before I was enrolled in the plan. So it's kind of a chicken and egg thing. The plan document only says you have to be enrolled on the date of service, which is why I enrolled. It's a lot of money and completely annoying but what can I do? I still work here, and I really don't want to bring a lawsuit against my employer while I work here. But it's kind of an expensive lesson in them stealing my money over technicalities that I had no access to before I enrolled.

[ecmst12]

The charges for mom's hospital stay will not be covered since they began before the coverage was in place. MOM did not have a qualifying event, baby did. Baby's charges should be separate and begin on the DOB, so you can claim those as well as any other charges incurred BEGINNING on the DOB (enrollment date). But mom's hospital stay is one bill, one event, so the entire event would have had to take place after enrollment was in place for it to be covered.

Yes, this does mean that if she'd managed to have the baby on the same day she was admitted to the hospital, the charges would have been covered. Unfortunately, that's the way it is. This is federal law and non-negotiable.

[skipdaniel]

Originally Posted by ecmst12

Yes, this does mean that if she'd managed to have the baby on the same day she was admitted to the hospital, the charges would have been covered.

Thanks for the response. Interesting that they didn't say a single thing about these facts when I enrolled. I guess I need a lawyer handy when I enroll. So they keep the money that I set aside for paying my bills. Great business for them. Make it sound like I'm putting aside money for my family when I'm really just putting money into an account that I'll have to forfeit because of a technicality. What a filthy business model. I'm going to be buying a LOT of aspirin in December.

[ecmst12]

Oh don't worry you should have plenty of valid things to spend the money on with the baby's care!

[skipdaniel]

Originally Posted by ecmst12

Oh don't worry you should have plenty of valid things to spend the money on with the baby's care!

actually it's pretty dang hard to spend that much. my part of the hospital bill came to 750 bucks. the baby visits to the pediatrician are only 30 bucks each. so basically i have to go find a 750 expense. the sick thing is that i spent a considerable amount of time trying to figure out how much to put aside, thinking that the life event was actually the whole reason they allow you to put money aside. apparently the benefit is for anything occuring 'after' the life event. kind of a critical little detail they convienently left out of the documentation so they could get my money. it's disgusting.

[slwx]

you need to look at the list of things you can turn in.

not only the doctor's co-pays, but also prescription meds.
i'm sure your wife will need some follup care that could be covered.

add to that any over-the-counter meds, glasses, contacts, contact solutions, humidifiers, etc.

and our company allows us a grace period through the end of march to spend it -- until april 15 to turn in all the receipts.

if you have any dental work you need, that's a pretty good way to use it too.

[cbg]

Common sense should have told you that nothing prior to the life event would be covered, since it's only because of the life event that you're allowed to add the benefit in the first place. I hardly think the employer deliberately failed to emphasize something that obvious for the express purpose of "getting your money".

Not to mention the fact that the rules are set by Federal law and your employer has no control over them.

[skipdaniel]

Originally Posted by cbg

Common sense should have told you that nothing prior to the life event would be covered, since it's only because of the life event that you're allowed to add the benefit in the first place. I hardly think the employer deliberately failed to emphasize something that obvious for the express purpose of "getting your money".

Not to mention the fact that the rules are set by Federal law and your employer has no control over them.

I find very little common sense in this whole program. It's a complete guess how much you are going to spend in any given year on healthcare, and anything you've set aside that you don't spend your employer and/or administrator keep for themselves! The only reason I put money aside was because of the guidance I was given on the website which made no mention of anything about the fact that if my wife had the baby 15 minutes earlier I would be able to use my money instead of them keeping it. I suppose it's common sense if this is presented as a risk based product whereby I'm gambling on how much I'll spend after the life event but it was definitely never presented that way.

I understand ignorance of the law is no excuse and I totally accept that I made a bad choice based on misinformation, and I'm sure my employer isn't really making out on my unfortunate miscalculation. I will however contact the people who run this and let them know that they really should present the plan better. It's not really a small detail to leave out, and should be explained no matter how 'common' the knowledge may seem.

It's not that hard to educate people, really:
1. You had a baby,
2. Set some money aside tax free for medical expenses!
3. Remember that expenses regarding you or your partner's stay at the hospital cannot be paid for from this account......unless of course you had the baby the same day that you entered the hospital. In that case you CAN use the money for expenses regarding the hospital stay.

[pattytx]

It's a complete guess how much you are going to spend in any given year on healthcare, and anything you've set aside that you don't spend your employer and/or administrator keep for themselves! I suppose it's common sense if this is presented as a risk based product whereby I'm gambling on how much I'll spend

Conversely, however, it is also a risk for the employer. Let's say you commit for $1200 for the year. The first deduction is a pro-rata percentage of that, depending on how many paychecks are left in the calendar year. After the first deduction is made (let's say this is January and you are paid monthly), you have contributed $100. You can submit qualified expenses of up to the entire $1200 on January 31. And on February 28, you quit. You have contributed $200 of the $1200 paid out to you and the employer eats the rest and cannot require (or even request) that you come up with the unfunded (by you) $1000.

[ecmst12]

I think it's very clear on any FSA paperwork I've ever seen that it is a "use it or lose it" program. I don't have much trouble figuring out how much I'm likely to spend on healthcare each year. I take a few prescriptions so there's those copays, I see my doctors at least 3 times a year for checkups/rx renewal and usually 1 or 2 other times for illness. I get my eyes checked and new contacts every year. The FSA isn't to pay for UNPLANNED medical expenses, but it's great for expenses that you know you will definitely have. I save a chunk of money with it every year, and even more importantly, I never have to worry about whether I'll have the cash on hand to pay for my prescriptions. You just have to use it for what it's intended for.

[skipdaniel]

All,

Thanks for listening to me whine about this and commenting.

FSA is a good plan for saving a little money on predictable medical expenses. If I were a betting man, I'd bet that the US government repeals this as they continue to look for more ways to find revenue.

[anteater]

Originally Posted by skipdaniel

...I'd bet that the US government repeals this as they continue to look for more ways to find revenue.

Maybe not outright repeal. But there are proposals to limit annual contributions to $2,500.