For a limited time only, a same-sex legally married spouse may make a change of election in his/her flexible spending plan.
Calling it an unconstitutional violation of the Fifth Amendment, the U.S. Supreme Court has struck down a federal law defining marriage as between one man and one woman. Same-sex couples who wed in states where allowed* now must be treated as spouses under the Internal Revenue Code (IRC), the Employee Retirement Income Security Act (ERISA), and more than 1,000 other federal laws.
What does this mean for FlexSystem Flexible Spending Accounts (FSA)?
For federal purposes, including employee FSA benefits, the change became effective on June 26, 2013. Going forward, a same sex couple that is married under state law has the same right to use a spouse’s FSA as does a heterosexual married couple. This is applicable to individuals residing in one of the states below and if the marriage is lawful within the state. Therefore, TASC will administer FlexSystem for same sex couples meeting this criteria exactly as for opposite sex couples. This change does not affect domestic partner coverage you may currently have in place, as it does not address nor grant rights to domestic partners.
What do you need to do?
Begin by informing your employees** that the DOMA ruling is viewed as a qualifying event for FlexSystem. This means they may change their current year annual election, up to a maximum of $2,500. You may also wish to communicate to employees who did not previously elect FlexSystem and allow them to now consider enrolling.
Enter a change of election or new enrollment for any Participant who is in a same-sex legal marriage and wishes to adjust his/her annual benefits contribution.
Customarily, Participants are allowed 30 days in which to make a change of election due to a qualifying event. TASC has extended this time limit and asks that you enter all DOMA-affected changes of election and new enrollments by August 31, 2013.
To make a change of election due to DOMA as a qualifying event:
- Login to your MyTASC account at www.tasconline.com. (Please note: if Participant eligibility changes are sent on electronic file feeds, send as a change on the file only and disregard 2-10 below.)
- From the Client Manager, click Participant List.
- Select the appropriate plan from the drop down menu.
- Locate the Participant with the change in status and click Account.
- On the Participant’s Account Summary, click the Contributions tab.
- Click on the Change link next to the un-posted Payroll Contribution for the applicable benefit.
- Deselect the auto adjust option on the bottom left of the page. (If you instead continue with the auto adjust option selected, all remaining contributions will be automatically updated to equal the current annual election amount.)
- Enter the new contribution amount for each remaining pay period contribution. Select the Next button when complete.
- Continue to follow the prompts and select the qualifying event “Dependent satisfies or ceases to satisfy eligibility requirements.”
- Repeat steps for each benefits contribution that needs to be changed.
DOMA helps you and your employees benefit even more from FlexSystem. The more Participants in your FlexSystem Plan and the more funds they run through their Plan, the more you save in taxes! Plus, the more pre-tax dollars Participants put in an FSA, the more they save in taxes, too. It’s a win-win!
*Legal same-sex marriages are recognized in California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington, and Washington DC.