Comments on: Employer Trying To Get FSA Overspend http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html personal finance blog with anecdotes, advice and commentary. Sun, 12 Feb 2012 22:21:00 +0000 hourly 1 By: Mez http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-383786 Mez Wed, 18 Jan 2012 15:45:36 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-383786 Some of you need to look up the term INTEGRITY in the dictionary. In this day and age, no employee should ever have unused funds in their FSA at the end of the year. It's as siimple as going to Walmart and purchasing extra contacts, bandages, cough medicines, etc. So the employer probably sees a few dollars left over in some accounts, but would take it in the shorts from everyone of you who thinks it's okay to not have to pay back money that you did not set aside. Isn't that the definition of stealing? Conscience be damned, this isn't an ethical or legal dilema. Taking something that isn't yours is theft. Just because you can't be prosecuted for it doesn't make it right. Some of you need to look up the term INTEGRITY in the dictionary.

In this day and age, no employee should ever have unused funds in their FSA at the end of the year. It’s as siimple as going to Walmart and purchasing extra contacts, bandages, cough medicines, etc.

So the employer probably sees a few dollars left over in some accounts, but would take it in the shorts from everyone of you who thinks it’s okay to not have to pay back money that you did not set aside. Isn’t that the definition of stealing?

Conscience be damned, this isn’t an ethical or legal dilema. Taking something that isn’t yours is theft. Just because you can’t be prosecuted for it doesn’t make it right.

]]> By: Dave A http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-383114 Dave A Thu, 05 Jan 2012 23:33:23 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-383114 Employers get to keep unspent funds. Employyess DO NOT have to pay back used amounts if they leave. It is not stealing. It is the law. Employers get to keep unspent funds. Employyess DO NOT have to pay back used amounts if they leave. It is not stealing. It is the law.

]]> By: Josh http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-381387 Josh Fri, 02 Dec 2011 20:37:24 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-381387 People love to spout of a bunch of B.S. and really have no idea what they are saying. As said a large number of times above and I'll summarize. If you quit/lose a job and you have extra money in your account you lose out. Sorry that's how the FSA works. If you quit/lose a job and you have spent more than you funded you do not have to pay it back. Sorry that's how the law works. Not ethics- simply the law. Now where does ethics come in? Funding the full amount for the next year, getting Lasik in January and then promptly quitting a job is unethical. At that point ask if you can live with your conscience, and decide. People love to spout of a bunch of B.S. and really have no idea what they are saying.

As said a large number of times above and I’ll summarize.

If you quit/lose a job and you have extra money in your account you lose out. Sorry that’s how the FSA works.

If you quit/lose a job and you have spent more than you funded you do not have to pay it back. Sorry that’s how the law works.

Not ethics- simply the law.

Now where does ethics come in? Funding the full amount for the next year, getting Lasik in January and then promptly quitting a job is unethical. At that point ask if you can live with your conscience, and decide.

]]> By: Duh http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-380943 Duh Sun, 20 Nov 2011 06:52:38 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-380943 Companies make a lot of money off of unspent money in employee's FSA accounts. This includes people not using the money by the year's end, of course...but ALSO it includes money left in the account when the employees quit (voluntarily or due to downsizing or being terminated). For the employee and the employer, the risk is the same. Please grow an ethical brain to go along with your ethical backbone. Companies make a lot of money off of unspent money in employee’s FSA accounts. This includes people not using the money by the year’s end, of course…but ALSO it includes money left in the account when the employees quit (voluntarily or due to downsizing or being terminated). For the employee and the employer, the risk is the same.

Please grow an ethical brain to go along with your ethical backbone.

]]> By: Katie http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-380202 Katie Tue, 08 Nov 2011 04:30:10 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-380202 The end of January is an ideal time to leave a position because you will be eligible to reimburse medical procedures in the first part of January with a 90% employer match. It's called the Uniform Coverage Rule, and knowing about it shows you've done your homework. If you say it's unethical, you work for the IRS. The end of January is an ideal time to leave a position because you will be eligible to reimburse medical procedures in the first part of January with a 90% employer match. It’s called the Uniform Coverage Rule, and knowing about it shows you’ve done your homework. If you say it’s unethical, you work for the IRS.

]]> By: M http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-379974 M Thu, 03 Nov 2011 22:03:42 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-379974 Quick Q: I had mistakenly elected for Dependent FSA and had deductions in 6 pay cycles. I have stopped it now, but is it possible for the Company to return this money to me (i.e. Cancel this Dependent piece and return the amount - after deducting taxes of course). I am still continuing on my regular FSA. (I am told that Dependent FSA can only be used for ChildCare and I do not have children). Is this money lost for ever ? Are there any other expenses for which I can use this money for? Thanks in advance for your help in this regard Quick Q:

I had mistakenly elected for Dependent FSA and had deductions in 6 pay cycles. I have stopped it now, but is it possible for the Company to return this money to me (i.e. Cancel this Dependent piece and return the amount – after deducting taxes of course). I am still continuing on my regular FSA.

(I am told that Dependent FSA can only be used for ChildCare and I do not have children).

Is this money lost for ever ? Are there any other expenses for which I can use this money for?

Thanks in advance for your help in this regard

]]> By: MANDI http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-379001 MANDI Fri, 21 Oct 2011 12:28:43 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-379001 I see many posts where everyone is judging everyone else. Many of you seem to think that just because someone used their flex spending and then leaves a position they are "unethical" for not returning it. You really need to walk a mile in someone's shoes before you spout off. I am a left leg amputee and am missing my hip joint. I have worked my whole life and have used flex spending for years to help off set my medical costs (which reach into the thousands every year). This year I worked at a company that was forever "forgetting" to pay us all of our hours, demanding that we pay for all of our own office supplies, copy paper, etc. I made $10 per hour....I couldn't afford this. To make it worse the doctors that I worked for are driving porsche and BMW's as their "back up" cars. They screamed adn yelled at the "clerical staff" daily. Often times cussing at us in front of patients. I finally had enough last Friday and I left. My next payday would be today and surprise surprise they are holding my check....because I used my FSA dollars already. It's illegal I know, but I do not have the money to hire a lawyer and fight them - they know that. So, not only did they get a great deal of my money in supplies, they also got my last paycheck.....this paycheck also had hours on it that should have been paid out in the previous pay period but were "forgotten" about and not put on my check. So, I am loosing money all the way around. Just asking some of you not to judge so darn quick. Some employers are unethical and do not deserve repayment of anything! I see many posts where everyone is judging everyone else. Many of you seem to think that just because someone used their flex spending and then leaves a position they are “unethical” for not returning it. You really need to walk a mile in someone’s shoes before you spout off. I am a left leg amputee and am missing my hip joint. I have worked my whole life and have used flex spending for years to help off set my medical costs (which reach into the thousands every year). This year I worked at a company that was forever “forgetting” to pay us all of our hours, demanding that we pay for all of our own office supplies, copy paper, etc. I made $10 per hour….I couldn’t afford this. To make it worse the doctors that I worked for are driving porsche and BMW’s as their “back up” cars. They screamed adn yelled at the “clerical staff” daily. Often times cussing at us in front of patients. I finally had enough last Friday and I left. My next payday would be today and surprise surprise they are holding my check….because I used my FSA dollars already. It’s illegal I know, but I do not have the money to hire a lawyer and fight them – they know that. So, not only did they get a great deal of my money in supplies, they also got my last paycheck…..this paycheck also had hours on it that should have been paid out in the previous pay period but were “forgotten” about and not put on my check. So, I am loosing money all the way around. Just asking some of you not to judge so darn quick. Some employers are unethical and do not deserve repayment of anything!

]]> By: matt http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-374453 matt Tue, 20 Sep 2011 22:57:03 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-374453 I think there is a difference here if it is a Medical FSA versus a Dependent Care FSA. Medical is prefunded and Dependent is paid as you fund it. Can they ask for Dependent FSA overpayment back? I know that Medical they can not. I think there is a difference here if it is a Medical FSA versus a Dependent Care FSA. Medical is prefunded and Dependent is paid as you fund it. Can they ask for Dependent FSA overpayment back? I know that Medical they can not.

]]> By: jrc http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-367174 jrc Tue, 19 Apr 2011 16:45:02 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-367174 also see attached link http://www.probenefits.com/pub/faq/Question.html?id=128&back=/Participants/Flex-Q-and-A.html also see attached link
http://www.probenefits.com/pub/faq/Question.html?id=128&back=/Participants/Flex-Q-and-A.html

]]> By: jrc http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-367173 jrc Tue, 19 Apr 2011 16:38:40 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-367173 See prop reg 1.125-1 Q 7: FSA will not qualfiy for tax favored treatment under IRC 105 or 106 if the effect of the reimbursement arrangement eliminates substantially all of the risk of loss to the employer maintaining the plan. Which means that if there is no employer risk they lose the tax favored treatment. There has to be a risk for both employer & employee. The employees risk is that they dont use the entire amount of annual contribution & the employers risk is if the employee leaves & has used more than they have contributed. See prop reg 1.125-1 Q 7: FSA will not qualfiy for tax favored treatment under IRC 105 or 106 if the effect of the reimbursement arrangement eliminates substantially all of the risk of loss to the employer maintaining the plan. Which means that if there is no employer risk they lose the tax favored treatment. There has to be a risk for both employer & employee. The employees risk is that they dont use the entire amount of annual contribution & the employers risk is if the employee leaves & has used more than they have contributed.

]]> By: Poofeybug http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-358416 Poofeybug Tue, 09 Nov 2010 14:23:37 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-358416 Wow. Tough, tough, tough crowd! I left a position in October and was not required to pay any kind of balance. It never even came up. In my mind it is all baanced by the fact that the previous year I left $25 in the account because the doggone debit card was declined twice in late March and I didn't have the psychic capital to fight the small loss. Leaving in the following October with a negative balance I hardly thought I was morally bankrupt and ripping off my employer -- jeez! I don't think employers out there lose sleep and consider themselves bloodsuckers when people don't use all the funds they put in and it's forfeited to the overall admin costs of the plan, right? Wow. Tough, tough, tough crowd! I left a position in October and was not required to pay any kind of balance. It never even came up. In my mind it is all baanced by the fact that the previous year I left $25 in the account because the doggone debit card was declined twice in late March and I didn’t have the psychic capital to fight the small loss. Leaving in the following October with a negative balance I hardly thought I was morally bankrupt and ripping off my employer — jeez! I don’t think employers out there lose sleep and consider themselves bloodsuckers when people don’t use all the funds they put in and it’s forfeited to the overall admin costs of the plan, right?

]]> By: PHR http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-345499 PHR Thu, 20 May 2010 04:23:11 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-345499 Kelly has hit this one out of the park. There is just one caveat. Your qualified expenses must be incurred prior to you leaving employment. Also this rule does not apply to dependent-care reimbursement accounts. http://www.irs.gov/publications/p969/ar02.html A qualified Jim Kelly has hit this one out of the park. There is just one caveat. Your qualified expenses must be incurred prior to you leaving employment. Also this rule does not apply to dependent-care reimbursement accounts.

http://www.irs.gov/publications/p969/ar02.html

A qualified Jim

]]> By: Lloyd http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-327565 Lloyd Fri, 18 Sep 2009 14:49:39 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-327565 There is no ethical dilemma here though. As others have said, there is mutual risk with an FSA that you BOTH agree to. Let's turn it around. Let's say the employer decides to lay you off. Do you think they're going to pay you back for what you didn't use? Of course not. There is no ethical dilemma here though. As others have said, there is mutual risk with an FSA that you BOTH agree to. Let’s turn it around. Let’s say the employer decides to lay you off. Do you think they’re going to pay you back for what you didn’t use? Of course not.

]]> By: Hello http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-304832 Hello Tue, 02 Jun 2009 14:28:07 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-304832 What an idiot. Pay back what you owe. You borrow money, you need to pay up now. Its such a wonderful employee benefit program. I use it all the time. What an idiot. Pay back what you owe. You borrow money, you need to pay up now. Its such a wonderful employee benefit program. I use it all the time.

]]> By: fer http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html/comment-page-1#comment-299861 fer Fri, 13 Mar 2009 07:52:18 +0000 http://www.bargaineering.com/articles/employer-trying-to-get-fsa-overspend.html#comment-299861 I almost lost $5000 to an employer by being signed up to a Flexible Spending Account in error. The employer had presented it as a Dependent Care Account and described it to the staff as a type of insurance available to cover subscribers in the event we have to leave work to care for an ill dependent. I'll give this manager the benefit of the doubt and call it confusion. None-the-less, I had to fight to get my $5000 back when I terminated employment under the use it or lose it rule. I could never have used it if it had been a Flexible Spending Program for Dependent Care. I have no dependents! To make matters worse, when the employer finally did send my refund, the Unemployment Benefits Administration arranged an eligibility review meeting with me to determine whether to treat this refund like "wages" and deny several weeks of check payments. I almost lost $5000 to an employer by being signed up to a Flexible Spending Account in error. The employer had presented it as a Dependent Care Account and described it to the staff as a type of insurance available to cover subscribers in the event we have to leave work to care for an ill dependent. I’ll give this manager the benefit of the doubt and call it confusion. None-the-less, I had to fight to get my $5000 back when I terminated employment under the use it or lose it rule. I could never have used it if it had been a Flexible Spending Program for Dependent Care. I have no dependents!

To make matters worse, when the employer finally did send my refund, the Unemployment Benefits Administration arranged an eligibility review meeting with me to determine whether to treat this refund like “wages” and deny several weeks of check payments.

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