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During open enrollment, I opened FSAs for healthcare and childcare which are "known" expenses for my family to take advantage of the tax break and account balance forwarding. Like any other parent, I opted for the maximum childcare deduction. Or so I thought I did.

I don't have any recollection or visible proof, but the website for opting for benefits was insanely difficult to use, and on account of a company merger, my requests for help were ignored. Needless to say, my childcare FSA didn't enter as a change to my enrollment profile (the healthcare did). So I am at a loss... I emailed the HR manager who finally responded along the lines of "You're SooL".

Is this actually true? Or are they being a lazy idiot and I need to escalate the issue? I reached out to the FSA management firm and they said I needed to speak to my employer, implying there might be some special arrangement for such a case.

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  • How long ago was the open enrollment period?
    – shoover
    Jul 1 '20 at 18:19
  • It lasted from March 1 - 15 (beware the ides of March). Benefits took effect April 1st, and I didn't think to inspect my paystub until June. :-/ We went to biweekly pay instead of twice-monthly and I was too busy actually doing my job.
    – AdamO
    Jul 1 '20 at 18:24
  • @AdamO - Hope you learned to verify your enrollment next year. Open enrollment exists for a reason. I agree you can escalate the issue but be prepared to find an alternative
    – Donald
    Jul 2 '20 at 10:55
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You may be in luck. Due to COVID-19 many people are having problems estimating their dependent care FSA amounts. Some people have needed more care, while others have needed less. One of the changes covered in the CARES act is related to Health Savins account, and Flexible spending accounts.

This is from the IRS: COVID-19 GUIDANCE UNDER § 125 CAFETERIA PLANS AND RELATED TO HIGH DEDUCTIBLE HEALTH PLANS Notice 2020-29

I put the key parts in bold.

To assist with the nation’s response to the 2019 Novel Coronavirus outbreak (COVID-19), this notice provides for increased flexibility with respect to mid-year elections under a § 125 cafeteria plan during calendar year 2020 related to employer-sponsored health coverage, health Flexible Spending Arrangements (health FSAs), and dependent care assistance programs.

This notice provides temporary flexibility for § 125 cafeteria plans to permit employees to make certain prospective mid-year election changes for employer-sponsored health coverage, health FSAs, and dependent care assistance programs during calendar year 2020 that the plan chooses to permit. Specifically, an employer, in its discretion, may amend one or more of its § 125 cafeteria plans (including limiting the period during which election changes may be made) to allow each employee who is eligible to make salary reduction contributions under the plan to make prospective election changes (including an initial election) during calendar year 2020 regarding employer-sponsored health coverage, a health FSA, or a dependent care assistance program, regardless of whether the basis for the election change satisfies the criteria set forth in Treas. Reg. § 1.125-4. In particular, an employer may amend one or more of its § 125 cafeteria plans to allow employees to: (1) make a new election for employer-sponsored health coverage on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage; (2) revoke an existing election for employer-sponsored health coverage and make a new election to enroll in different health coverage sponsored by the same employer on a prospective basis (including changing enrollment from self-only coverage to family coverage); (3) revoke an existing election for employer-sponsored health coverage on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer; (4) revoke an election, make a new election, or decrease or increase an existing election regarding a health FSA on a prospective basis; and (5) revoke an election, make a new election, or decrease or increase an existing election regarding a dependent care assistance program on a prospective basis.

My reading is that this is optional, but the IRS will allow it this year. Talk to HR, show them the information from the IRS. Talk to the company that is administrating the plan. I have found similar information on several administrator web sites.

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  • This is an awesome answer for two reasons. 1) in other words, were there not a giant pandemic, the answer is plainly I'm f@#$ed. 2) this is the first time I've heard of this announcement. HR and plan administration have been silent hitherto. Are we surprised? I sent them the announcement (notice 2020-29) irs.gov/pub/irs-drop/n-20-29.pdf and they intend to follow-up.
    – AdamO
    Jul 8 '20 at 22:27
  • A follow-up, a month ago (more than 3 months after reaching out and hounding them), they said they had no plan to change midyear elections even with the bill in place. I have left that employer.
    – AdamO
    Dec 31 '20 at 19:13

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