Posted by: brucestein | June 25, 2012

Standing Up for the Customer

TASC will respond to the Healthcare Reform legislation and implement the necessary changes and administrative process updates to comply. In every instance, TASC will be pro-Client and pro-Participant, and will keep our customers at the forefront of our decision making processes.

These two lines, which appear on every Position Paper we write regarding the Patient Protection and Affordable Care Act (PPACA), guide how TASC approaches all changes that affect our customers. Whether it’s a government mandated change, a change brought on by technology, or a marketplace-driven change, at TASC we’re always looking out for our customers.

That is why TASC took the stance we did regarding the health Flexible Spending Accounts (FSAs) cap. As a reminder, this provision of PPACA states “…that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such [an] arrangement.”

It has been TASC’s position that the cap does not pertain to Plan Years that commence before January 1, 2013, even if most of the Plan Year is in 2013. Frankly, we took some heat from others in the industry for our position. But, on May 30, 2012, the IRS issued final guidance regarding the cap. Lo and behold, TASC had it right! The IRS Notice made two main points:

  1. Because employees make salary reduction contribution elections for health FSAs on a Plan Year basis only, the term “taxable year” refers to the Plan Year of the Plan. Accordingly, the $2,500 limit on health FSA salary reduction contributions also applies on a Plan Year basis only. Therefore, the rule will not affect any Plans beginning prior to January 1, 2013.
  2. The $2,500 limit on salary reduction contributions to a health FSA applies on an employee-by-employee basis; meaning that each spouse may elect to make salary reduction contributions of up to $2,500, even if both participate in the same health FSA sponsored by the same employer.

Now, I am not saying that TASC gets it right 100 percent of the time. But I am saying that TASC stands up for our customers 100 percent of the time. In this case we were right, and that’s great news, especially for non-calendar year Plan sponsors and Participants.


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