Flexible Spending Question--DH quitting job

[emdav]

I don't understand how you can morally take advantage of monies you are not entitled too? You know you will not pay for the benefit!

It wold be different if you used the program in good faith and then resigned but you are purposely trying to get something for nothing.

We did use the program in good faith. When the election was made, we had no idea he would be leaving the company. We are entitled to this money because we made the election. It's not hurting the company's bottom line. They will fund our claims with money leftover from other's accounts. Do you think companies are morally wrong when they keep the money? I don't and it's against the tax codes for them to return it. It's part of the agreement. It just so happens that we will come out ahead on the FSA. It's a benefit the company offered. They are not forced to offer it. They fully realize that some employees may leave before the fund the amount they receive. It's a risk they were willing to take when they decided to offer FSA accounts. If I didn't make appointments for next week, I would be leaving money on the table and quite frankly, I'm not willing to do that.

 

[chicagodisneyfan]

We did use the program in good faith. When the election was made, we had no idea he would be leaving the company. We are entitled to this money because we made the election. If I didn't make appointments for next week, I would be leaving money on the table and quite frankly, I'm not willing to do that.

Sorry, I disagree. You are not acting in good faith - you made an election but have paid NOTHING into the 2012 election.

Spend 1/12 of your election which is all you are entitled too. Otherwise, I believe it is stealing.

What else do you call it when you take things you have not paid for?

 

[emdav]

Sorry, I disagree. You are not acting in good faith - you made an election but have paid NOTHING into the 2012 election.

Spend 1/12 of your election which is all you are entitled too. Otherwise, I believe it is stealing.

What else do you call it when you take things you have not paid for?

Why do you assume we are putting nothing into it? We will have a payroll deduction. Dh has worked very, very hard for this benefit. He has earned it. He is paid in cash and benefits.

He has also accrued many, many hours of vacation time which he will be leaving on the table. Is the employer stealing by not reimbursing him for his vacation time? No, it was part of the agreement. We are living up to our agreement, nothing more or less. It just happens to be in our favor for the FSA and grossly out of our favor for the vacation time.

 

[GAGirlInVA]

We've NEVER had pay back anything over what we've contributed when we have left mid-plan year.

When I worked in HR solutions administering FSA, we were taught that this was the way it was done. It is to even the playing field a bit since the company gets to keep anything set aside but not claimed.

The best bet is to check how your FSA is run-- since others here are saying they had to pay some back. Honestly-- that shocks me though.

 

[bumbershoot]

I did a bit of research and IRS Publication 969 addresses FSA's. The entire election amount has to be made available at the beginning of the year and there is no provision for the employer to seek reimbursement. Of course an employer can ask, but there is no legal standing.

Yep.

Company can ask, but they cannot take it out legally.


I almost did this, but decided to stick it out at work until I'd paid it all back instead. Just felt uncomfortable with it.

But I could have done it and it would have been totally legal and allowable.

 

[kaytieeldr]

I don't understand how you can morally take advantage of monies you are not entitled too? You know you will not pay for the benefit!

It wold be different if you used the program in good faith and then resigned but you are purposely trying to get something for nothing.

I'm a little confused. It's legal to use the full elected amount of a calendar year's FSA as of the first day of that year. See the IRS publication to which the OP refers. Heck, I wish her husband worked for the company that laid me off in 2009 - they didn't explain it properly and I left thinking they meant I had to submit all my claims by the next day; not that I could redeem more expenditures! I left a few hundred dollars... as did, I'm sure, many others.

You see, it balances out.

 

[jedijill]

To the people that think its immoral to leave your job before you've paid in 100% of what you claim, do you expect the company to pay you back unused money at the end of the year? That does not happen..it's use it or lose it. The way the system is set up it becomes a wash.

Jill in CO

 

[momxx5]

Personal experience:

The Flex Spending account will be fully funded at the first of the month. It is yours to spend and I suggest you spend every bit you can.

When DH lost his job, little did we know that we had a certain number of days to file and if we were smart we would have paid off all medical expenses including braces because, it is very similar to "if you don't spend it you lose it"......."you can spend it all at once and not owe the balance".....ALL perfectly legal.

 

[aprilgail2]

Sorry, I disagree. You are not acting in good faith - you made an election but have paid NOTHING into the 2012 election.

Spend 1/12 of your election which is all you are entitled too. Otherwise, I believe it is stealing.

What else do you call it when you take things you have not paid for?

I don't understand how you can morally take advantage of monies you are not entitled too? You know you will not pay for the benefit!

It wold be different if you used the program in good faith and then resigned but you are purposely trying to get something for nothing.

I agree- I personally could not do this since it would feel to much like stealing to me. I am retiring in June of 2013 and this will be my last year using the flex spending account-I will not sign up for it next year since I know I am retiring and won't be able to pay back all the money into it.
I think it is terrible to take advantage of it when you KNOW you are not going to be there to fully fund it.....if you are laid off that is one thing but to KNOW you are leaving the company and do that I think that is a really slimey thing to do.

 

[powellrj]

don't be too surprised if your DHs company doesn't let him work his full 2 weeks and tells him good-bye early. DH and I have both seen this happen over the years at many of the jobs we have had. Be careful, you may end up with appointments you can't use.

 

[kaytieeldr]

I agree- I personally could not do this since it would feel to much like stealing to me. I am retiring in June of 2013 and this will be my last year using the flex spending account-I will not sign up for it next year since I know I am retiring and won't be able to pay back all the money into it.

While what the OP intends to do is entirely legal (and her husband's employer is aware it can happen but will likely come out ahead because of the employees who don't use their full FSA contributions in 2012), your situation is different.

You absolutely can, legally and ethically, contribute to a Flexible Spending Account in 2013. You contribute via a deduction from each paycheck, as you know - then you just submit for reimbursement expenses you incurred up to the total you paid into your FSA. If, for example, you think you'll have $500 of allowed expenses by retirement date, have $19.23 deducted each week and applied to your FSA.

 

[PrincessDadx2]

I don't understand how you can morally take advantage of monies you are not entitled too? You know you will not pay for the benefit!

It wold be different if you used the program in good faith and then resigned but you are purposely trying to get something for nothing.

LOL, I don't think anyone ever accused the IRS of being moral

When you make the election in your open enrollment you are entitled to the money - period end of story.

That is the benefit your company chose to offer under the IRS guidelines. They have their big girl panties on when they compete for employees.

As PP have said the quid pro quo is that they keep the money that is not spent, use it our lose it.

If your morals include not getting the benefits you are entitled to, but allowing your employer to get benefits that they are not entitled to, then pay them back. That is how the system works.

Whether or not it makes sense is another story, but no one ever accused the IRS of being logical either

 

[emdav]

don't be too surprised if your DHs company doesn't let him work his full 2 weeks and tells him good-bye early. DH and I have both seen this happen over the years at many of the jobs we have had. Be careful, you may end up with appointments you can't use.

And that was a very real concern. Dh is in management and has fiduciary responsibilities. He has shown some of his employees the door on the day they gave notice although they have kept them on payroll for two weeks. Dh went in yesterday ready to turn in all his equipment and the company car. They wouldn't let him off the hook that easily.

 

[sdjen]

It depends on the company.

While the entire amount we elected is available on the card on January 1st, if we leave the company and use more than we elect, we need to pay it back. It automatically comes out of our last check. If the total dollar amount exceeds the last check, we have to write a check for it. I guess my company doesn't want to give us free money.

I work for an insurance company and we do handle FSA accounts. This is actually illegal. They can ask for the money back but you DO NOT have to pay it back. They cannot legally withhold the money from your last check.

 

[sdjen]

To add a little more.

THere are actually two types of FSA accounts - medical and dependent care. For dependent care you can only get out what you have contributed to the FSA at the time of the claim.

For medical, the full election amount is available the 1st day of the plan year. So, if you have a calendar year plan year, the full amount is available on January 1st.

I also agree with the other statements. This is a risk that the company takes in offering FSA plans. They are aware of it - they may not like it but they know it can happen. They can ask you to pay it back but you do not have to.

 

[believe]

Our company started the FSA plans several years ago. We were told that if we left the company prior to contributing the full amount, but had spent the full amount we would be expected to pay what had not yet been paid in.

I do believe they will take the first payment from his paycheck in January unless you check with his HR and see if they can reverse his request to use the FSA benefit.

 

[Bob NC]

Sorry, I disagree. You are not acting in good faith - you made an election but have paid NOTHING into the 2012 election.

Spend 1/12 of your election which is all you are entitled too. Otherwise, I believe it is stealing.

What else do you call it when you take things you have not paid for?

I think you need to do a little research before making any accusations. Oh wait, I forgot this is the DIS, make any groundless accusations you'd like.

 

[silmarg]

i think you need to do a little research before making any accusations. Oh wait, i forgot this is the dis, make any groundless accusations you'd like.

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