Accidental Enrollment in Dependent Care FSA

[CTU]

I'm very thankful to the both of you! This information is truly helpful, and despite the crappy circumstances, I'm glad that I found this forum.

Stope, cbg will likely respond again in the morning, if not tonight.

 

[cbg]

cbg will be back on Monday. cbg is tired of having to explain the point she is making over and over to people who either don't know how it works at all, or know it from a different angle and don't know how it works from cbg's end. cbg has never once said that the correction could not be made. cbg has only said that she can understand why the employer is reluctant to do so and why the employer is not in violation of the law by refusing.

cbg out for the rest of the weekend.

 

[stope265]

cbg, stope265 understands where you are coming from, and I sincerely appreciate your expert knowledge regarding the position that I am in. I have taken no offense, and I'm glad that you are forthcoming with the facts of the matter, whether I like what I hear or not. I've always told people that I prefer the truth. I can deal with the truth, the facts, but anything else is not solid ground. (I also appreciate the tax perspective since that helps explain why no attorney seems interested I helping my case.)

Anyway, this is all a moot point now. My employer gave me the "you have been laid off" letter on Friday, so my problem has been resolved. (One other person was also let go due to the dismal state of our industry.) I've lost almost $2000, but at least now with unemployment, my salary will be higher than it was while I was working and having this money withheld. (Crazy, right?) Also, I've been fortunate to have a phone interview that has moved forward to the next stage in the hiring process with a company that is in a different industry and is closer to my home. Perhaps this was all for the best. Still, I could have done without the income loss and overwhelming stress.

You can bet your sweet ass that I will be a detailed freak when it comes to signing up for benefits at whatever new job that I may be fortunate enough to land. And if their website blows, and is crazy bad lime this one, I will *insist* that an HR person walk me through it. I will swallow my pride and let them think that I'm a moron so long as I end up where I need to be. LESSON LEARNED.

 

[cbg]

(My most recent post was not directed at you, stope)

I'm sorry to hear that you were laid off, but I'm glad to hear that it may better your position. Stop back to this thread tomorrow, anyway; I still think it would be worth your using the argument I'm planning to give you, to get some of that money back. It may or may not work but it's worth a shot anyway.

 

[stope265]

cbg, THANK YOU SO MUCH! I don't have anything more to lose, so anything to help try to get the money back would be much appreciated, even if it doesn't work.

 

[cbg]

Okay, here we go. I was able to get my hands on the documents I wanted and they don't have quite as much information as I remembered but they should be enough to get you going. I remembered their being more official language and less in-house, sorry! I also found this link to a previous thread here on this forum.

https://forum.freeadvice.com/fringe-benefits-95/fsa-election-mistake-correction-350349.html

What you are looking at is called "the Impossibility Standard". The IRS leaves it up to the employer whether to allow corrections or not. I am looking at my own in-house materials which I cannot share specifically and which are not binding on another employer, but this is the standard my employer uses to determine when we will and when we will not. The Impossibility Standard is our first approach - would it be impossible for the employee to benefit from his or her election? In your case, it would be. Therefore, under the Impossibility Standard IRS will not prohibit the employer from making a correction to reverse the election and refunding your deductions. It will not require it, either, but it will not prohibit it. Generally we will allow corrections under the Impossibility Standard at any time within the plan year (we have more restrictive requirements for other corrections).

What I would do in your case is submit a formal, written request for the employer to refund your money on the basis that the IRS recognizes the Impossibility Standard and informally allows corrections on that basis. If you have a friend or relative who is an attorney, or if you can have an attorney write the letter for you at a low cost, that might be the way to go. Otherwise you can do it yourself, but coming from an attorney might scare them a little more.

It's not a sure thing. As a friend of mine says; try it - it works or it doesn't. But it's not going to work if you don't try.

Let me know how it turns out!

 

[stope265]

Okay, here we go. I was able to get my hands on the documents I wanted and they don't have quite as much information as I remembered but they should be enough to get you going. I remembered their being more official language and less in-house, sorry! I also found this link to a previous thread here on this forum.

https://forum.freeadvice.com/fringe-benefits-95/fsa-election-mistake-correction-350349.html

What you are looking at is called "the Impossibility Standard". The IRS leaves it up to the employer whether to allow corrections or not. I am looking at my own in-house materials which I cannot share specifically and which are not binding on another employer, but this is the standard my employer uses to determine when we will and when we will not. The Impossibility Standard is our first approach - would it be impossible for the employee to benefit from his or her election? In your case, it would be. Therefore, under the Impossibility Standard IRS will not prohibit the employer from making a correction to reverse the election and refunding your deductions. It will not require it, either, but it will not prohibit it. Generally we will allow corrections under the Impossibility Standard at any time within the plan year (we have more restrictive requirements for other corrections).

What I would do in your case is submit a formal, written request for the employer to refund your money on the basis that the IRS recognizes the Impossibility Standard and informally allows corrections on that basis. If you have a friend or relative who is an attorney, or if you can have an attorney write the letter for you at a low cost, that might be the way to go. Otherwise you can do it yourself, but coming from an attorney might scare them a little more.

It's not a sure thing. As a friend of mine says; try it - it works or it doesn't. But it's not going to work if you don't try.

Let me know how it turns out!

Thanks so much for this information. Interesting update: I mentioned earlier that I submitted a "Life Event" change (before they laid me off) by selecting the life event change entitled "Children No Longer Eligible". I have since seen how much my last paycheck will be. LO AND BEHOLD, all elected deductions EXCEPT the DCFSA have been withheld! I can only assume that they approved the change, then let me go. How would you suggest that I word my letter to refund that money as of the "date of life event change"? The website would not accept the actual date of employment, so I ended up using the day that I entered the change. Also, I cannot find the SPDs (Summary Plan Descriptions) or SBCs (Summary of Benefits & Coverage) documents anywhere on the website although the Summary Guide and other areas on the site refer to it.

One last question, am I able to continue using my Health FSA card? I can't get an answer from anyone on that either. Thank you!

 

[cbg]

Whether you can still use your Health FSA card depends on your administrator. It can't hurt to try and see. The worst that can happen is that you're turned down and you pay cash or use another card instead.

When I get back to work tomorrow I'll see what language we used in our samples. Do not hesitate to prompt me if you don't see anything by mid-day Eastern time since after tomorrow I'm on vacation for a week.