Flexible Spending Account jurisdiction

[Carter Sanders]

What is the name of your state (only U.S. law)? California

If I have a valid claim that my ex-employers FSA service stonewalled and stalled my FSA claim until it was too late to be honored, can I settle this in local small claims court?

I'll try to settle this with employer without litigation, but they're trying to get me to settle for an amount les than their obligation. I feel I have a very strong case, but I'm worried I'll show up in court and lose because the county has no jurisdiction over FSA compliance.

Thanks for any help.
Carter

 

[ecmst12]

FSAs are regulated by the IRS/federal government, so I don't see how small claims court would have jurisdiction...but I am not a lawyer. You should talk to one. It's also possible that you have no recourse whatsoever due to the strict "use it or lose it" policy of FSAs - regardless of the reason for the late approval. However since you haven't actually told us what HAPPENED, it's hard to say.

 

[Carter Sanders]

Thanks for the response.

What happened is that I left the company and sent in adequate documentation to support the claim (a bill showing procedure, date of service, amount paid by me), and PayChex then sent me mail a week or two later saying they needed more documentation. Their stated reason was that the bill was for the month following the service rather than the month I paid, and even though all the same documentation was on the bill, it showed zero dollars due since I'd paid it off.

I then spent several hours getting my hospital's billing service to send me the full accounting statement and faxed it to PayChex. After that, I tried to both log in to their website to confirm receipt of the fax, but I discovered my login had been disabled (apparently on date of termination, NOT at the end of the 90 day grace period to still file claims). I then tried to call in, but my PIN to their IVR system had also been disabled, so I had to wait on hold for a human.

After finally getting through after several attempts, they told me that the faxes were "blacked out on the top half" and that they had made no attempt to contact me to resend them. By this time, the 90 days to file + 45 days extra for sending additional docs had expired.

I suspect you're right about the jurisdiction, and the best way to fight this might be to talk to the State Attorney General's office, because they might have the ability to regulate what payroll outsourcing companies can be used by companies doing business in CA. The disabling of the web and voice access certainly seems like a significant consumer rights issue.

I did call the IRS and ask them who polices FSA cheaters, and they thought it was a great question, but had no idea. Maybe if I actually send a written letter, I'll get a better response.

 

[ecmst12]

Since the original documentation you submitted contained all the required info, it appears you have met your obligation and should have received the reimbursement. The date of service is all that's needed, whether or not you have paid it yet or have a balance due is irrelevent. You may be able to pursue and get your money, but might be difficult. You could try the state or federal DOL, or the insurance commissioner.