What happens if you spend money out of flex and you lose your job?

[rudeguy]

Lets say your kid needs braces. Your cost will be $1900, so you pay that out of pocket and get reimbursed through flex. What happens if you lose your job half way through the year before you have paid in that $1900 into flex?

 

[Christobevii3]

You'd probably pay the rest outside of flex?

 

[rudeguy]

Originally posted by: Christobevii3
You'd probably pay the rest outside of flex?

Its already been paid back to you though. You spent $1900 out of pocket and the flex company sent you a check for $1900. But lets say you have only put in $900 so far that year. What happens?

 

[Freshgeardude]

your out 1k?

 

[kranky]

You win. You don't have to pay it back. No kidding.

 

[Viper GTS]

Originally posted by: kranky
You win. You don't have to pay it back. No kidding.

Yup. This is the answer. If you get notice (or are leaving on your own terms), spend every penny in your FSA.

The converse of this is also true - Your company keeps anything you don't spend when you leave.

Viper GTS

 

[awal]

Originally posted by: Viper GTS

Originally posted by: kranky
You win. You don't have to pay it back. No kidding.

Yup. This is the answer. If you get notice (or are leaving on your own terms), spend every penny in your FSA.

The converse of this is also true - Your company keeps anything you don't spend when you leave.

Viper GTS

Well that sucks, I'm glad I decided to bypass FSAs this year.

 

[sjwaste]

Originally posted by: NSFW
Lets say your kid needs braces. Your cost will be $1900, so you pay that out of pocket and get reimbursed through flex. What happens if you lose your job half way through the year before you have paid in that $1900 into flex?

I believe with FSA's, the employer eats the cost if you leave mid-year. At least, my former employer did. That was their risk, whereas mine was that I wouldn't spend my entire contribution and lose it.

 

[rudeguy]

Originally posted by: Viper GTS

Originally posted by: kranky
You win. You don't have to pay it back. No kidding.

Yup. This is the answer. If you get notice (or are leaving on your own terms), spend every penny in your FSA.

The converse of this is also true - Your company keeps anything you don't spend when you leave.

Viper GTS

Thanks guys.

My sis has been holding off getting my nephew braces because of the uncertainty of things around here. My bro in law works in tool and die, so a lot of their work comes from the Big 3. He normally works over 60 hours a week but has been cut down to 32 for a long time now. She was scared that if he lost his job they would be out the $2k.

She will greatly appreciate the info.

 

[Geekbabe]

Can't the company pull what you owe from your final paycheck or severance pay?

 

[kranky]

Originally posted by: Geekbabe
Can't the company pull what you owe from your final paycheck or severance pay?

Not for flex spending.

 

[alkemyst]

flexible spending is a use it or lose it. This is assuming you are talking about having X dollars of pre-tax money put aside each month.

If you don't use it by the end of the year you lose it

If you are fired prior to the end of the year your employer must pay it out.

 

[jlee]

Originally posted by: kranky
You win. You don't have to pay it back. No kidding.

Yep.

 

[Wreckem]

Originally posted by: Viper GTS

Originally posted by: kranky
You win. You don't have to pay it back. No kidding.

Yup. This is the answer. If you get notice (or are leaving on your own terms), spend every penny in your FSA.

The converse of this is also true - Your company keeps anything you don't spend when you leave.

Viper GTS

It depends on the program.

In Texas atleast, you are still liable to pay it all back. You either make payments or make one lump sum payment. On the other side of the coin you can still spend the remaining part after as well.

 

[Wreckem]

Originally posted by: kranky

Originally posted by: Geekbabe
Can't the company pull what you owe from your final paycheck or severance pay?

Not for flex spending.

Yeah they can. It all depends on where you work and the FSA you are using.

<----- works for the state of Texas. TexFlex, the FSA for Texas employees, you are on the hook for the full amount even upon termination. You have two options, continue to make monthly payments, or make a lump some payment out of your final check. You can continue to use the money in the TexFlex account until its empty, although after seperation from employment you can no longer use the debit card, and have to be reimbursed.

Id strongly recommend the OPs sister read the information provided from by her FSA.

 

[kranky]

That's interesting. Our benefits admin at work told me once that the IRS rules for Section 125 deductions prohibit the company from taking funds from employees who separate from the company if they have haven't yet fully funded their FSA account compared to what they spent. Something called the uniform coverage rule.

Wonder if a state government doesn't have to follow those rules.

 

[erub]

Originally posted by: Wreckem

Originally posted by: kranky

Originally posted by: Geekbabe
Can't the company pull what you owe from your final paycheck or severance pay?

Not for flex spending.

Yeah they can. It all depends on where you work and the FSA you are using.

<----- works for the state of Texas. TexFlex, the FSA for Texas employees, you are on the hook for the full amount even upon termination. You have two options, continue to make monthly payments, or make a lump some payment out of your final check. You can continue to use the money in the TexFlex account until its empty, although after seperation from employment you can no longer use the debit card, and have to be reimbursed.

Id strongly recommend the OPs sister read the information provided from by her FSA.

Strange. And you made that sound like that is the rule in the State of Texas, but really its not. Its for state of Texas EMPLOYEES. If you just have a regular job in Texas, this is not the case. It is, as others have described..you win!

The annual caps for a medical FSA varies by employer. Unlike dependent care FSAs, there is no IRS cap on medical FSAs, but employers generally limit the annual amount each employee may contribute, in order to reduce the risk of pre-funding. Should the employee leave or be terminated and thus no longer pay in to the plan, the employer does not recapture their pre-funding from the employee's payroll deduction.

Wiki

 

[Wreckem]

Originally posted by: erub

Originally posted by: Wreckem

Originally posted by: kranky

Originally posted by: Geekbabe
Can't the company pull what you owe from your final paycheck or severance pay?

Not for flex spending.

Yeah they can. It all depends on where you work and the FSA you are using.

<----- works for the state of Texas. TexFlex, the FSA for Texas employees, you are on the hook for the full amount even upon termination. You have two options, continue to make monthly payments, or make a lump some payment out of your final check. You can continue to use the money in the TexFlex account until its empty, although after seperation from employment you can no longer use the debit card, and have to be reimbursed.

Id strongly recommend the OPs sister read the information provided from by her FSA.

Strange. And you made that sound like that is the rule in the State of Texas, but really its not. Its for state of Texas EMPLOYEES. If you just have a regular job in Texas, this is not the case. It is, as others have described..you win!

The annual caps for a medical FSA varies by employer. Unlike dependent care FSAs, there is no IRS cap on medical FSAs, but employers generally limit the annual amount each employee may contribute, in order to reduce the risk of pre-funding. Should the employee leave or be terminated and thus no longer pay in to the plan, the employer does not recapture their pre-funding from the employee's payroll deduction.

Wiki

I didnt say it was a rule for the state of Texas. I said employees of Texas. And I also said the OPs sister should check with her FSA administrators.

In some circumstances(state employees, some federal employees, some non-profit employees, etc) you are on the hook for the full amount, but can still spend the full amount within a certain time frame. For instance my mom worked for a hospital and she had to pay the remainder of her FSA contributions upon seperation as well.

My FSA(TexFlex, administrated by PayFlex).

What happens to my account upon termination of employment?

Your FSA-Health is a commitment for the entire plan year, and you must continue your monthly payments. You have the option of:

Paying your remaining TexFlex pledge out of your last paycheck (tax-free funds) or
Pay your remaining pledge back monthly (after-tax dollars).

Remember that you can use your funds through 11/15 by filing Express or paper claims.