Invalid decrease in the combined annual election
Error Code: EN035
Error Message: Combined Employee Election and Employer Election amounts cannot be less than employee's spending year to date
Applicable to: DCFSA, FSA, and LPFSA.
The combined annual election by both the employee and employer cannot be decreased below the total spending incurred year-to-date. Even if some spending is deemed ineligible, once a balance due is created, the combined annual election must not be less than the total spending year-to-date minus the ineligible expenses. For example:
- John’s annual FSA election is $1,500. His employer will contribute an additional $500 annually.
- John has contributed $1,200 to his FSA account so far. He has spent $1,800.
- John has a Qualifying Life Event (QLE) that allows him to change his annual election. He wants to update his FSA election to $1,200 so he can stop contributing. The $500 employer election has not changed.
- As John has already expended $1,800, he should maintain his annual election at a minimum of $1,300 to cover the remaining contributions by year-end.
- If $100 out of the $1,800 is deemed ineligible, it will create a $100 balance due on John’s account, revising his total eligible spending to $1,700. At this point, John can adjust his employee annual election to $1,200; however, he will still have a $100 balance due.