What are Qualifying Life Events and How do they affect my FSA?

Can I change contribution amounts to my Flexible Spending Account?

As a Flexible Spending Account (FSA) holder, you rely on your benefit to cover a huge range of qualifying products and services, so finding ways to maximize your payroll allocations throughout the year is pivotal to reducing your bottom line. Unfortunately, outside of the open enrollment period, you are only allowed to make changes to your contributions, if you experience a Qualifying Life Event (QLE), and if your plan allows for such changes.

When can I change my payroll allocation?

A Qualifying Life Event refers to an event defined by the Internal Revenue Service (IRS) Section 125 that allows you to change your FSA election outside of the open enrollment period.

Here are the specific events that can give you a chance to raise or reduce your allocations:

1. A change in your number of tax dependents

2. A change in your legal marital status (including marriage, legal separation, divorce or death of a spouse)

3. A death of a dependent

4. Birth of a child, adoption of a child or placement for adoption

5. A change in your employment status that affects eligibility for health insurance benefits (for yourself, a spouse or one of your dependents)

6. A change in your dependent's eligibility, such as when a child reaches age 13 and no long qualifies for coverage under a Dependent Care FSA

7. A change in child/elder care cost or coverage, but this only applies to those who use a Dependent Care FSA

8. COBRA Qualifying events, Judgments Decrees or Orders, Entitlement to Medicare and FMLA(Family Medical Leave Act)

What should I do if I experience a QLE?

When one of these events takes place or is around the corner, you should speak with your FSA administrator within 30 days of the event to make the necessary changes. It's important to remember that not all employers will offer mid-year changes to FSAs, so speaking with your benefits administrator about the regulations surrounding your account is extremely important.

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