Cold Spaghetti

I’ve been lamenting on the Royal Screw we’re getting from Creative Benefits, the third party that SAIC (Paul’s company) uses to manage it’s Flexible Spending Account (FSA) programs. My Dad offered to have his labor attorneys look over the situation, so I got PDFs of all the paperwork Paul signed and emailed it on. Reading over it, I’m thoroughly disgusted. I’m no attorney, but I think I can figure out right from wrong, and as far as I can tell, those bastards are seriously in the wrong.

Here is the situation. Paul opted to enroll in the FSA program to withhold $1300 for the 2005 calendar year to pay for one semester of Will’s 2-day a week preschool at Newcomb School, the preschool run by Tulane University. His program was to start in the first week of September. When Katrina hit New Orleans, Newcomb School was flooded and Tulane was closed for the fall. Since Will was obviously not going to be going to Newcomb in 2005 and we were unsure of how much, if any, childcare we were going to be able to find, we opted to stop withholding. That’s it; all he did was re-sign the same form changing his paycheck withholding amount, based on our change of family status, and within the guidelines of what is allowed for a change of status (evacuation due to hurricane Katrina). The paperwork clearly states: “For each calendar year, any unspent balance from my flexcomp contribution above will be forfeited.” This is the only circumstance listed in the paperwork for a forfeiture of funds; and specifies that the loss is to occur only if an unspent balance is not used during the current calendar year.

We were able to find an alternative childcare provider in late October. Will attended University Montessori School, a provider who follows FSA guidelines and specifications for using FSA funds, from late October until mid-December 2005. The school worked with us to submit the proper paperwork required by the company which runs the FSA program (Creative Benefits). We were shocked to find that Creative Benefits rejected the claim, saying that Paul “was not enrolled during that time period.” (We found this out by logging into their website to check the status of our refund from the account.) The paperwork specifies that the withholding applies to an entire year of use, regardless of amount being currently withheld.

Our impression from FSA programs and the forms Paul signed is that we saved funds to be used during the 2005 calendar year. For example, if Paul had been laid off by SAIC at the end of August (rather than hit by a hurricane) his rights to the FSA money would not have forfeited, even though he would have no longer been contributing to the program. Therefore, whether or not we were putting money into the account during the time of use shouldn’t matter: it was within the 2005 calendar year and we had money in the account that was saved during the 2005 calendar year. It seems very clear to us. From what we understand, human resources representatives from Paul’s company (SAIC) are “looking into it” although we have not received updates nor do we know exactly who is advocating for us or on what level. Considering that Paul’s company provides him with stimulating work he enjoys and the amazing quality of life gained from working from home, we don’t exactly want to burn bridges.

So what’s a frustrated family to do? Argh.