SAR and FSA......HELP!!!!!!!!!

scottorr

I thought I posted this yesterday but I can't seem to find the thread. I think it may have been pulled for using our FSA company's name.

I am trying to figure out who is right. Our FSA comapny is telling I do not have to file a summary annual report for our FSA, and that they have never heard of a company that has done so. The FSA company is a large company with a good reputation, so I have always trusted their judgement in the past. Our corporate attoney is tell me that we have to complete a SAR for our FSA. Does anyone know who is right?

Betty I_O

Unfortunately, corporate attorneys most often are not conversant in either HR or benefits issues.

Your FSA provider could be correct. The IRS suspended some filing requirements for specified fringe benefits plans (cafeteria plans, education assistance, and adoption assistance programs). For example, we did not have to file a 5500 for our Pre-Tax Program. That did not affect the annual reporting requirements under Title I of ERISA--welfare plans still must file Form 5500 and attach the appropriate schedules. (We've been told the rule is: File a 5500 = provide an SAR to employees.) BUT . . . a health care flexible spending account that is BOTH a welfare plan under ERISA (because it reimburses medical expenses) AND a cafeteria plan still is required to file a Form 5500 if it has 100 or more participants. If your plan is both a welfare and cafeteria plan, a 5500 should be filed and an SAR distributed to employees. How is your plan defined in the plan document?

Occasionally, we have found it helpful when there is a difference of opinion to consult an attorney who specializes in benefits. We also have sought advice from our corporate auditing firm (they have an HR/Benefits consulting group). In any event, have your provider put their opinion--and why--in a letter to you.

Brad Forrister

FYI, we didn't delete your original version of this, but we did move it to the Benefits area. Sorry you lost it.

Brad Forrister
Director of Publishing
M. Lee Smith Publishers