How to process mid-year election changes

After the plan starts (for existing employees) or the account starts (for new hires), employees have the option to adjust their benefit election amounts or opt out of contributing to a benefit entirely. Typically, the following rules apply:

• FSA, LPFSA, DCFSA require a Qualifying Life Event (QLE) to change elections mid-year. 
• HSA elections can be updated anytime without a QLE. 
• Transit and Parking elections can be updated anytime without a QLE. Generally, employees should be allowed to change their commuter elections once per month and those changes should be effective the month following notification of the change.

See How does 'QLE Change' work on election files? .

Employee stops making contributions but is still eligible to participate in pre-tax benefits

This is commonly seen with Transit and Parking accounts. When an employee stops making contributions but is still eligible to participate in the program, make the following changes to your elections file. 

• Update ‘Employee Pay Period’ Election to 0
• Update ‘Employer Pay Period Election’ (if applicable)
• Keep ‘Account Status’ as ‘Active’ to allow employees to continue accessing the funds that they’ve already contributed.
• Update ‘Account Start Date’ to the date when the change will take effect. This action will not change the account start date recorded in Forma because it determines the coverage start date, but can be used for record keeping.

Example 1: Sonia contributed $100 per month to her Transit account starting January 1, 2025. She wants to stop contributions in May. Send the following information on the elections file:

• Account Type = Transit
• Employee Pay Period Election = 0
• Account Status = Active
• Account Start Date = 2025-05-01

Example 2: Sam elected $1000 to an FSA starting January 1, 2025. He was married in April and wants to stop contributing to the FSA in May. Sam hasn’t spent any FSA funds.

• Account Type = FSA
• Employee Pay Period Election = 0
• Based on the original annual election of $1000, his pay period election was $41.66. Sam had 8 payroll deductions between January and April, with a total contribution amount of $333.33.
  • The annual election cannot be reduced to less than the total contributions made during the plan year. For this example, enter 333.33 as the ‘Employee Annual Election’. 
    • Note that each ben-admin system may calculate pay period elections differently. This calculation method is only an example.
• Account Status = Active
• Account Start Date = 2025-05-01
• Optionally, send QLE Change = TRUE

Employee stops making contributions and becomes ineligible to participate in pre-tax benefits

When an employee no longer qualifies for pre-tax benefits, it's important to halt contributions and terminate their account access. In such instances, implement the following changes to the elections file:

• Update ‘Employee Pay Period Election’ to 0
• Update ‘Employer Pay Period Election’ to 0
• Update ‘Employee Annual Election’
  • Leave blank for Transit and Parking
  • Amount must not be less than the total employee contributions or total spend so far.
• Update ‘Employee Annual Election’ 
  • Leave blank for Transit and Parking.
  • Amount must not be less than the total employee contributions or total spend so far.
• Update ‘Account Status’ to ‘Terminated’
• Leave ‘Account Start Date’ unchanged
• Optionally, provide ‘Account End Date’ as the date when coverage should be terminated

Example 1: Jess contributed $100 per month to her Transit account starting January 1, 2025. She relocated to Canada in May and is no longer eligible for US pre-tax benefits. Send the following information on the elections file:

• Account Type = Transit
• Employee Pay Period Election = 0 
• Account Status = Terminated
• Employee Annual Election = blank 
• Account Start Date = 2025-01-01
• Optionally, send Account End Date = 2025-04-30 

Example 2: Vicky initially elected $1000 to her FSA, effective January 1, 2025. Her marital status changed in April, allowing her to make a benefit change. She now elects an HDHP and intends to begin contributing to the HSA in May. It's important to note that she cannot maintain an active FSA while contributing to the HSA. Additionally, Vicky hasn't utilized any FSA funds. Send the following information on the elections file:

• Account Type = FSA
• Employee Pay Period Election = 166.67
• Based on the original annual election of $1000, her pay period election was $41.66. Vicky has had 8 payroll deductions between January and April, with a total contribution amount of $333.33.
  • You cannot reduce the annual election to less than the total contributions made during the plan year. Enter 333.33 as the ‘Employee Annual Election’. 
    • Note that each ben-admin system may calculate pay period elections differently. This calculation method is only an example.
• Account Status = Terminated
• Account Start Date = 2025-01-01
• Optionally, send Account End Date = 2025-04-30 
• Optionally, provide QLE change = TRUE

Employee changes their monthly or annual election amount

If an employee wishes to adjust their monthly or annual election, follow these steps to update the elections file. This process is applicable to any pre-tax account type.

• Update ‘Employee Pay Period Election’ to the newly calculated monthly or annual employee election amount
• Update ‘Employer Pay Period Election’ to the newly calculated monthly or annual employer election amount
• Update ‘Employee Annual Election’ to the new annual employee election
• Update ‘Employer Annual Election’ to the new annual employer election
• Leave the ‘Account Status’ as ‘Active’. 
• Update ‘Account Start Date’ to the date when new elections will take effect. When associated with a QLE, it is typically the QLE event date. This action will not change the account start date recorded in Forma as it determines the coverage start date, but can be used to distinguish the coverage amount after the new date.

Example 1: Tina contributes $100 per month to her Transit account starting January 1, 2025. She wants to update her monthly contribution amount to $200 per month in May. Tina is on a semi-monthly pay schedule. Send the following information on the elections file:

• Account Type = Transit
• Employee Pay Period Election = 100 ($100 per pay period = $200 per month)
• Account Status = Active
• Employee Annual Election = blank 
• Account Start Date = 2025-05-01

Example 2: James initially elected $1000 to his FSA, effective January 1, 2025. Following his marriage in April, he became eligible to adjust his annual election, with the change to take effect from May 1, 2025. He intends to update his annual election to $3000. James receives pay on a semi-monthly basis. Please include the following information in the elections file:

• Account Type = FSA
• Employee Pay Period Election = 166.67 (instead of 41.66, the old amount)
  • Based on the original annual election of $1000, his pay period election was $41.66. James has had 8 payroll deductions between January and April, with a total contribution amount of $333.33
  • Due to his increased annual election, for the remaining 16 payrolls he should be contributing ($3000-333.33)/16=$166.67 per pay period.
    • Note that each ben-admin system may calculate pay period elections differently. This calculation method is only an example.
• Account Status = Active
• Employee Annual Election = 3000 
• Account Start Date = 2025-05-01
• Optionally, send QLE Change = TRUE

Mid-year election change FAQS

• When the change is retroactive or a correction (not a QLE), it is not necessary to update the ‘Account Start Date’. 
• The updated annual election cannot be lower than the total contributions or total spend for the plan year. If it is, you will receive a file error to prevent a reduction in the annual election amount.
• The updated annual election should be the full, new annual election, not the remaining contributions or the difference in the election amount. In Jame’s example, do not send 2666.67 (the remaining contributions) or 2000 (the difference in the annual election). 
• An increase in the annual election can only be used to cover expenses incurred after the new account start date. If James made a $2500 payment in February, he will only be reimbursed up to $1000. If the same payment was made in June, since his new election amount is $3000, he could be fully reimbursed. 
• A decrease in the annual election amount prevents an employee from claiming more than the new annual election for expenses incurred after the change. If James was changing his election from $3000 to $1000, a $2500 payment in June could only be reimbursed up to $1000. If the $2500 payment was made in January:
  • James could be reimbursed fully prior to making the election change. However, this would prevent him from decreasing his annual election to $1000 because it is lower than the total spend.
  • After the change takes effect, he can only be reimbursed a maximum of $1000. 

When to send updated election files when auto-deposit is enabled? 

Auto-deposit uses the latest ‘Pay Period Election’ amount from the elections file on the scheduled contribution date, so timing to update the pay period election amount is critical. 

Example 1: if your Transit account is set up with a monthly auto-deposit that runs on the 5th of the month, you’ll want to make sure any election changes for May are sent after April 5 but before May 5.  

Example 2: If your Transit account is set up with a semi-monthly auto-deposit that runs on the 15th and 30th of the month, you’ll want to make sure any election changes for May are sent after April 30 but before May 15.