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Processing UW FSA and LPFSA Qualifying Events in HRS


This business process outlines the procedure for making a change to an employee's FSA election during a qualifying event.

Process Considerations:

  • Employees can change their FSA elections only under limited circumstances as provided by established IRS guidelines.
  • The Change of Election form is to be used by employees to enroll in (if not already enrolled), or make changes to their Medical, Dependent Care, or Limited Purpose FSA annual elections within 30 days of a qualifying life event. It is the institution’s responsibility to review and approve/deny the request based on IRS guidelines, using the  ETF Qualifying Event Matrix.
  • Applications must be submitted within 30 days of the employee's qualifying event (unless due to birth of child - 60 days).
  • If the employee is enrolling in the Limited Purpose FSA (LPFSA), verify in HRS that the employee is enrolled in the HDHP & HSA plans first. If they have not enrolled in HDHP & HSA, please reach out to employee and request proof of other HDHP coverage. Proof of other HDHP coverage needs to be sent to UW Shared Services - Benefits Team via a Cherwell ticket. If the employee is not enrolled in these plans and/or is not covered by their spouse's HDHP/HSA, then they are not eligible for the LPFSA. Check with the employee to see if they meant to enroll in the Medical FSA plan instead.
  • P&T=Parking and Transit
FSA Overrides:
  • Employee contributions will be deducted in equal amounts from each paycheck, pre-tax, throughout the Plan Year.
  • Employees must follow the 26 or 20 pay schedules
  • Only 20 bi-weekly pay employees will have overrides on their accounts
  • UWSS Benefits Team will be querying for overrides that are placed on employee Spending Accounts and will remove them
  • Employees may NOT have overrides placed on their FSA accounts UNLESS it is their final paycheck prior to retirement/termination
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1. Receive FSA Change in Election form within 30 days of a qualifying event.

2. Review the Qualifying Event Matrix to determine if the qualifying event is valid. Request additional information from employee if you need more information to determine validity.

  •  For example: Employee checks “Change in Employment Status." You can request more information regarding the change—is it increase/decrease in FTE? You can also confirm with the department.
  • If the Qualifying Event is NOT valid: Institution notifies the employee. Process end.
  • If the Qualifying Event is valid, confirm that the change is consistent with the event. (Election change(s) must be consistent with the qualifying life event. Ex: If you get married or have a child, you can enroll in or increase your election, but not decrease. In the case of divorce, you can increase/enroll if you become main caretaker of the child.  If a child no longer qualifies as a dependent, you can decrease your election, but not increase. See matrix for more guidance.)
    • If enrolling, make sure employee is eligible for the plan (Ex: LPFSA, can only enroll in this if they are enrolled in HDHP & HSA). 
    • If changing election, make sure employee is already enrolled in the plan (Ex: employee enrolled in Medical FSA should not have a change indicated for LPFSA plan).
3. Confirm that the "New Annual Election" is an ANNUAL amount, not per pay period amount and does not exceed the annual IRS Contribution Limit.

4. Enter the FSA Enrollment/Change into HRS as soon as it's received to ensure employee will be enrolled in a timely manner.

  • Change is effective the first of the month on or following the qualifying event date, EXCEPT for birth/adoption or loss of coverage (change is effective the day of the qualifying event).
  • Use effective date as the FSA or ADM event.
  • 20 payroll employees: make sure to put on an override and divide the annual election over the remaining pay periods in calendar year. Make sure to subtract any deductions already taken. This assumes they are returning in the Fall. FSA deductions are not taken on summer session or summer service appointments.  Examples:
    • Employee’s FSA coverage begins 4/1/21 and elects $500 annual contribution. You will need to override and divide the $500 over the 5 months of biweekly contributions (April, May, September, October, November). 
    • Employee's annual election was $500.  Effective 4/1/21 the employee changes the annual amount to $650, but has already contributed $200. Divide the remainder, $450, over the 5 months of biweekly contributions (April, May, September, October, November) and enter the override into HRS. 
9.2 Enrollment
5. Based on the request from the employee, please check the appropriate enrollment reason box on the form.

6. File the form in the employee's benefits file.

Note: Employee(s) cannot change their annual election to an amount that is less than the amount they've already contributed.
  • If an employee decreases their annual election to be equal to what they've already contributed, they will be allowed to incur expenses up to the new, reduced annual election amount through the end of the plan year.

Additional Resources

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Keywords:FSA, Flex, Flexible Spending Account, ERA, Employee Reimbursement Account, LPFSA, Limited Purpose Savings, Change Election, Qualifying event, Life Event, Change in Status, BN, Benefits BN, Benefits   Doc ID:48812
Owner:erinn b.Group:UW–Shared Services
Created:2015-03-16 10:14 CSTUpdated:2021-10-13 12:15 CST
Sites:UW–Shared Services
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