Principal Issues:
1) health spending account & whether the plan year can vary according to employee
2) can the plan use the health care spending account to adjust for changes in flex credits allocated by salary or for changes in cost of benefits
-other issues include c/f of credits at year end, changes for life events
Position:
1) yes, the plan year for each employee can begin with the employee's month of birth
2) no the amount of flex credits must be fixed at beginning of year & cannot be reallocated except in the event of a life event (although some portion of the fixed amount of credits allocated prior to the start of the plan yr may have been calculated with reference to the employee's salary at that time
Reasons:
if the credits can be transferred between options or if the amount of credits is not fixed, the credits may be seen as additional remuneration or the flex plan may be considered an employee benefit plan
