FSA Accounts and changing monthly contributions


A

anthonymmfalcone

I understand how Flexible Spending Accounts (FSA) work. My
question is, if I am allowed to change my 401k contribution
on a monthly basis, why can the FSA contribution be changed
only once a year, or only upon a life-changing event
(birth/adoption/death etc)? Why not monthly?

Is this a federal government rule? IRS rule? or just a
function of the specific company one works for?

Thank you.

Tony Falcone
 
Last edited by a moderator:
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A

A.G. Kalman

I understand how Flexible Spending Accounts (FSA) work. My
question is, if I am allowed to change my 401k contribution
on a monthly basis, why can the FSA contribution be changed
only once a year, or only upon a life-changing event
(birth/adoption/death etc)? Why not monthly?

Is this a federal government rule? IRS rule? or just a
function of the specific company one works for?
IRS regulations dictate that the amount of the reduction
cannot be changed during the plan year unless an employee
experiences a change in family status (newborns, adoptions,
marriage, divorce, dependent death, or spouse stops
working). A plan is allowed to provide the employees the
right to change their election if there is a significant
change to the cost or coverage of the health.
 
Last edited by a moderator:
A

anthonymmfalcone

Thanks for the info, Alan. So, if I wanted to start a
grassroots effort to change that rule, it would require an
Executive ruling by the President, or a new law in Congress?
Not that I would be successful in such a herculean tastk...
but I was just wondering.
 
Last edited by a moderator:
A

A.G. Kalman

A.G. Kalman said:
(e-mail address removed) wrote:
IRS regulations dictate that the amount of the reduction
cannot be changed during the plan year unless an employee
experiences a change in family status (newborns, adoptions,
marriage, divorce, dependent death, or spouse stops
working). A plan is allowed to provide the employees the
right to change their election if there is a significant
change to the cost or coverage of the health.
Last part of the last sentence of my post should have said
"health plan."
 
Last edited by a moderator:
A

A.G. Kalman

Thanks for the info, Alan. So, if I wanted to start a
grassroots effort to change that rule, it would require an
Executive ruling by the President, or a new law in Congress?
Not that I would be successful in such a herculean tastk...
but I was just wondering.
You need legislative action.
 
Last edited by a moderator:
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A

A.G. Kalman

A.G. Kalman said:
(e-mail address removed) wrote:
IRS regulations dictate that the amount of the reduction
cannot be changed during the plan year unless an employee
experiences a change in family status (newborns, adoptions,
marriage, divorce, dependent death, or spouse stops
working). A plan is allowed to provide the employees the
right to change their election if there is a significant
change to the cost or coverage of the health.
Last part of the last sentence of my post should have said
"health plan."
 
Last edited by a moderator:

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