Flexible Spending Account First Pay Period Rate for Rounding

We had an issue this year with FSA.  We had several employees where the amount accrued for the year was lacking a few cents.  This caused several things to happen, including trying to generate refunds if their election amount was less than the previous year.  It generally collected what it needed and end dated the element.  This is normally what it does when it collects the full amount except we are in a new plan year, and it was not a good thing.

In researching the problem we observed that when it calculates the rates. it collects any small division remainder on the first pay period of the year. This is what it did the years prior to 2017.  However, in 2017 it did not do this.  Hence, we came up at the end of the year with the total amount not being met by a few cents.