Extended 125 Deadline

Hunter1

Our employees have 90 days after the end of our Section 125 plan year to make claims. During the year, the TPA for our 125 plan changed addresses. We notified employees in several ways, plus, they get statements in Oct, Nov, and Dec, plus one in Feb for the previous year, with the claims address on. An employee mailed in a claim at the absolute last minute, to the wrong address and it was returned after the deadline. The employee, of course, wants us to extend the deadline. Thoughts? law?

Scott Ruth

If the expense is otherwise valid (a permissible expense incurred before the end of the year), I would tend to think you should pay it. I am surprised that the TPA wouldn't have mail forwarded during this period. In any event, I know you have probably given the participant lots of notices of the address change and probably in the last minute haste he or she just found the wrong address, but in the end you'll be seen as denying a claim based upon a technicality. The person did everything required, but made a mistake. I would require a postmark before the end of the 90 day deadline, though, or other proof that it was actually mailed within the required time.