After the initial panic wore off, I realized this is just my FSA* provider, and my exposure is limited to $381. Had it been my 401(k), I would be turning green and menacing. My editorial comments appear in red.
Dear Valued Client, (Uh, oh.)
It is with tremendous regret that we must inform you of an unfortunate situation with your Flexible Benefits Administrator – 1Point Solutions. On September 22nd, they closed their doors and issued termination notices to all of their employees. Essentially, we were notified around midday today, however, with very little detail. As we were able to extrapolate additional information (A google search on the newswire.), the closure appears to be the result of multiple lawsuits relating to 1Point’s inability to properly account for several employers’ 401(k) plans. (More likely, losing a large contract that would maintain the financial shell game.) At 12:50 this afternoon we were notified by 1Point that the Judge overseeing the case along with the legal counsel have tentatively approved a plan to have a court approved administrator take over the 1Point flex plan administration. Further details are to be issued tomorrow morning. Unfortunately there are still a large number of details that remain unanswered.
We have contacted the Tennessee State Attorney General’s office and the legal counsel for 1Point Solutions. We assure you we will do everything possible on your behalf to resolve this situation.
The concept of having a third party manage the flexible spending accounts seems inherently bogus, because all they do is hold onto the money and dole out checks a month after I submit claims for reimbursement.
(*FSA accounts let you set aside a lump sum for certain medical, child care and transit purposes. The amount is in pre-tax dollars, thank you John Q. Public. Any money you don’t use by the end of the year is forfeited.)