F.A.Q.

This page is to help answer common question that employer's may have about Flexible Spending Accounts.

	What are the government requirements for establishing and maintaining a Section 125 Cafeteria Plan?
	The Employer, as the legal Plan Administrator, must have plan documents executed prior to the plan's effective date which include an Adoption Agreement, Plan Document, Summary Plan Description, Plan Information Summary, Board Resolution and signed employee enrollment form(s). After the Plan Documents are executed, each eligible employee should receive a copy of the Summary Plan Description and Plan Information Summary along with any other communication material. The Employer, as the legal Plan Administrator, is responsible for insuring that the required nondiscrimination tests are conducted each plan year as well as taking corrective action upon the failure of any one of the nondiscrimination tests. Lastly, regulations such as ERISA, COBRA, HIPAA and FMLA may apply to the underlying benefit(s) and/or component plan(s) offered under your Section 125 Cafeteria Plan. The Employer/Plan Administrator is also responsible for maintaining compliance with these regulations as well. As your Plan Service Provider, we will update your Section 125 Cafeteria Plan documents, whenever necessary, based on mandates by your organization, Internal Revenue Service or other governmental institutions.
	What is the purpose of the Section 125 Cafeteria Plan Administration Guide?
	The Administration Guide was created to assist the Employer/Plan Administrator with various components of cafeteria plan administration. This Administration Guide should be utilized in conjunction with your Plan Documents, as well as any other reference material. Some of the issues addressed in this guide are enrollment forms, change of status forms, communication material and the contribution billing report review process. It also includes sample forms for easy reference. Of course, as your Plan Service Provider, we are always available to assist you in any way we can.
	If my company has a Premium Reduction Option Plus Flexible Spending Section 125 Cafeteria Plan, do I have to open a separate bank account for the Unreimbursed Medical Plan and Unreimbursed Dependent Care Plan contributions and claims?
	No, you can use your general asset bank account. However, if you decide to open a separate bank account for these contributions and claims, the account name must NOT be in the name of the Section 125 Cafeteria Plan in order to avoid trust requirements. The bank account should also be non-interest bearing. In addition, we will require copies of the actual deposit ticket or wire confirmation each time a deposit is made to this account.
	I already have a supply of reimbursement request forms, but your office forwarded new versions of these forms. Why can't I continue using the older versions?
	Anytime there is a change in Internal Revenue Service or Department of Labor regulations, documents and forms may be modified to reflect these changes. It is in your best interest to replace any outdated forms with the amended versions that are supplied to you. As your Plan Service Provider, we will monitor and update your forms whenever necessary.
	I just received a Contribution Billing Report. What do I do with it?
	You should first compare it with your pre-tax payroll deduction register each pay period. If there are any newly eligible participants, qualified changes in status or terminations of employment, please make sure you have a completed the appropriate Enrollment and/or Change of Status form that corresponds with each scenario. If there were any abnormal pre-tax contributions deducted, these contributions should be reflected on the report and accompanied by the specific details surrounding the adjustment. Once you made all the necessary changes, please adjust the individual totals for each applicable section AND the grand totals listed on the last page of the report. Lastly, the authorization page on the front of the report should be signed and dated as well. The entire Contribution Billing Reports along with all applicable Enrollment and/or Change of Status forms should be returned to O.C.A. Benefit Services. PLEASE NOTE: Your prompt return of this report, along with any forms, is essential to the maintenance of accurate data. If you are a Premium Reduction Option Plus Flexible Spending Plan client, it is vitally important that Contribution Billing Reports be forwarded to O.C.A. Benefit Services as quickly as possible. When a delay in receiving a Contribution Billing Report is experienced, it will affect the payment of claims to Unreimbursed Dependent Care participants since this plan is adjudicated based upon the actual cash balance at the time the claim is submitted. If the participant's account balance is not posted to date, the availability of funds is impacted. A delay in the receipt of Contribution Billing Reports will also impact the re-enrollment of your group for the following plan year. As your Plan Service Provider, the Contribution Billing Report allows us to take a pro-active approach in assisting your organization with maintaining audit compliance.
	When do you complete a Change of Status form?
	A Change of Status form would be completed by the employee and employer when an employee wishes to make a qualified change to his or her pre-tax contribution(s). It is important to pay close attention to the action taken by the employee since it has to be on account of and correspond with the qualified Section 125 Cafeteria Plan change of status event. Secondly, the election change has to be made on a prospective basis except for a birth or adoption of a child. The Section 125 Cafeteria Plan qualified changes of status are located in your Plan Document. You can also find a sample Change of Status form and Change of Status matrix in your Administration Guide.
	When I fill out the Acceptance of Change Request box on the bottom of the Change of Status form, what pay date do I use?
	If an employee terminated employment, the date should reflect the first check date (the date that appears on the payroll check) that the employee will no longer have pre-tax contributions deducted. If the employee is changing his or her pre-tax election (i.e. single medical coverage to family medical coverage), the date should reflect first check date that the new pre-tax contributions will commence.