Our claim submission deadline for Flexible Spending Account claims is March 1. Are we OK to use this date since it’s reflected in our Summary Plan Description (SPD)?
 |
Thank you for your inquiry regarding deadlines for FSA claims.
Run-out period. An FSA is permitted to have a run-out period designated by the employer. A “run-out period” is a period after the end of the plan year (or grace period) during which a participant can submit a claim for reimbursement for a qualified benefit incurred during the plan year (or grace period). This means that a plan may provide a deadline on or after the end of the plan year (or grace period) for submitting a claim for reimbursement for the plan year.
Any run-out period must be provided on a uniform and consistent basis for all participants. Employers may establish a run-out period of up to 90 days, but shorter times periods are within the employer’s discretion. So, your company can establish a run-out period that ends March 1 instead of March 31.
Grace period. Employers may offer a 2-month-and-15-day grace period during which a participant who has unused contributions or benefits for a particular qualifying benefit from the just-ended plan year, and who incurs qualifying expenses for that benefit during the grace period, may be paid or reimbursed for those expenses from the unused benefits or contributions as if the expenses had been incurred in the immediately preceding plan year.
The effect of the grace period is that a participant may have as long as 14 months and 15 days to use benefits or contributions for a plan year before those amounts are forfeited. Employers may offer the grace period for a shorter period.