Employees Cannot Change Their Flex Spending Elections During the Year - except…

Article Posted on 02/17/2020

It happens. That employee shows up in your office and asks if they can change their flex spending account (FSA) election because their child needs braces or broke their arm. Well the answer most the time is "no" they cannot change that election. The IRS does however, allow for changes in the following circumstances:

Life events that change your status - for example marriage, birth, or adoption of a child and certain changes in employment. The change has to be consistent. For example if you are having a baby then it would be assumed that you want to increase the FSA election. If you want to decrease it - that doesn't work. 

Your insurance premiums change during the year instead of in line with the FSA plan year. For example, the premium goes up midyear and an FSA typically runs calendar year. Not all plans allow this so you should ask your plan administrator for clarification.

Court order or law change occurs. This one is complicated. Talking to your FSA administrator is suggested here.

The fact is having an FSA is a great tool however there are rules that must be followed. It's important that you call your plan administrator when you're not sure. 

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