Need help with $5000 Flex Account mistake!

I have to ask this. Even though this HR person recommended that you take these loans didn't you read the terms of the loan?



Perhaps there is some way to negotiate a payment plan. I hope you can find some helpful solution.

Typically there is a flex medical and a flex dependent care offered at a company.,if both are offered and she signed u up for the wrong one, have the hr person call their carrier and switch them.. If there is no way to get out of it, you would most likely need to find someone to to "provide daycare" to. The child and submit claims for that..but that would be considered income to that person..but if hr made an error, make them fix it and get you unenrolled and have them say it was their error!
class='post_sig'>Diagnosis 12/15/2010 IDC 3cm 0/6 nodes stage IIa,grade 3' Triple Negative</div

Was this HR person pushing a program? Falsifying documents? That might be an opening to who is responsible for this mess. I don't understand how you could borrow funds from a child care flex program if as you say there needed to be information that both parents are employed! It should have been denied.

I found a couple things online that indicate that there are IRS guidelines somewhere that "mistaken elections" can be corrected if there is "clear and convincing evidence" of the error.  Sounds like you have a case for this since you were not and are not working and therefore were not eligible to enroll in the DCFSA in the first place.  So it would be be reasonable to say that you enrolled in the DCFSA by mistake and that you had meant to enroll in the HCFSA. 

None of these links actually tell where the IRS guidelines are, but they all refer to their existence.  I'll keep looking to see if I can find more info.  Thought I'd share these links so you could look further also... 

http://www.opm.gov/retire/pubs/bals/2006/06-801.pdf

http://www.lawknowledge.org/employment-labor-law/30044/

http://forum.freeadvice.com/fringe-benefits-95/fsa-election-mistake-correction-350349.html

I'm so sorry for this confusion for you.  As an HR professional, let me try to help here.

Section 125 of the IRS code allows pre-tax contributions to be made to either a Flexible Spending Account, or a Dependent Care account.

 In your case, you wanted the Flexible Spending Account.  The DCA is either for children (daycare) or any other 'dependent' (elderly parents) where you are the 'legal guardian'.

You can contact that HR person or higher up and explain that an honest error was made during Open Enrollment and you were signed up for the wrong account.  It doesn't matter whose error it is at this point, you need it fixed.  There is no reason why your company cannot do this for you, especially if you have not submitted any claims yet.  Explain what the initial intent was that you needed the funds for.

I help the employees out all the time, with no problem.  You may need to get approval from the person who makes the benefit decisions for your company.  It isn't that HR person.  Maybe a CFO?

Anyhow, it's a typical error made over and over and easy to fix.

 I hope this helps.

Just saw this - I wonder if you can threaten to report them for not administering the plan correctly - not making sure that the rules of the plans are clear in the enrollment process.  If it were investigated, maybe they would get in trouble.  This makes my blood boil.

Also - you have to be careful - if you pay your mother, I believe she will have to claim it as income (self employment income) and pay tax on it - including both portions of social security(employer and employee portions)...  Not sure what kind of documentation she/you would have to have to prove she provided child care services...

Not sure about the "you have cancer and can't work" part.  Unless you are on disability, I'm not sure the government would say you "can't" work and can therefore use those funds for child care.  Sounds like HR is giving you wrong information about the benefit plan AGAIN. 

I want them to get in trouble for being misleading in their benefits administration and for their LAZINESS in not wanting to correct the honest error that you have "clear and convincing evidence" for that is going to result in financial hardship for you - either loss of funds, inability to use the funds for the purpose intended (child care instead of health care) OR inability to use the amount of funds needed to cover medical expenses(by their stopping the deductions instead of just moving them to the correct account.) 

I would especially show them the link to the government pdf document where a government agency documented instructions on how they can make the correction.  If the government is going to make the correction for its employees, your husband's company most certainly should.

Well, if worse comes to worse, if they are willing to stop the deductions so you don't lose more than you've already contributed, at least you can minimize how much you lose. It still sucks that you won't get the tax savings on the money you need to spend on your healthcare - which is what the plan is for.  They really need to do a better job explaining the benefit plans to the employees.  People should not have to lose their hard-earned money because their employer is incompetent.  I want to go ape-s**t on that lady and it's not even my money...  (((((HUGS)))))