We have just discovered that we failed to notify 15 people that they have account balances in their FSA for 2002.

How do we rectify this? Can we notify them now and give them until the end of April to request a reimbursement.

Help!

The IRS doesn’t specifically say that you have to notify FSA participants of their balances at all. It’s up to employees to keep track of their own money. I think you could go either way on this. You would probably be OK saying that they are out of luck, but I agree that the right thing to do is to extend the filing time for these individuals. I bet the IRS would see this as a good faith effort to correct a wrong. The end of April seems like a good cut off to me, as well.

Considering that the Administrator is usually paid a fee, whether by the employer or employee, I do not see why it should not be a duty of the Administrator to notify employees about their balances, It takes little more effort than "pushing a button" and mailing the notice.

What does your SPD, PD and TPA Agreement say?

Check out your plan documents as they tell you how long after the plan year ends ee's have to submit claims for expenses incurred in the prior plan year. That should be your guide at this point. I see most plans have a 60 to 90 day "run out" period, although I have once client that has 180 days! Use that first - if the run out period is over - then that is that. No reimbursements can be made!

Don't you think that greater care should be taken beyond the Plan Document? What happens if the SPD and/or actual practice gives more time or a looser time frame? Bear in mind such cases as :

http://www.ebia.com/weekly/articles/2000/C...0831Grande.html