Can they just keep my money??

[~*Alexis*~]

Does anyone have a Health Reimbursement Account? Or a Flexible spending account? Have you had problems with it??

I worked for a large healthcare company for a year and I elected for both. So they payroll deducted money every month to put into these accounts. I no longer work for this company. So I called and asked for them to cashout my accounts since I am no longer covered under their policies. Ya know what they said?

"Its not your money. The company is now in control of it and it can''t be cashed out unless you submit a claim from before your end date."

Can they do this? I was never aware of this when I was hired. Its MY money and they are telling me i CANT have it??

Anyone else know of this happening? I have almost a thousand dollars in those accounts that I put in there. They cant just keep it can they??

 

[Skippy123]

They cannot cash out your accounts unless you have valid medical expenses you can be reimbursed for. I would talk to your human resources person. You should still be able to turn in receipts. I hope you have receipts in the amount of $1000. You have a year to use the money for medical expenses.

 

[Mara]

from what i recall flex spending was not something you could cash out or get $$ back from...you either used it or you lose it kind of thing. not sure about the other one you listed.

 

[Hudson_Hawk]

You can turn in reciepts between now and March 31 (I think that''s the date) but only for 2007 reciepts.

 

[Hudson_Hawk]

You can turn in reciepts between now and March 31 (I think that''s the date) but only for 2007 reciepts. Your old company doesn''t control that money, there is a separate company who runs the flex-plan who controls the money. The only way you can cash out is for elegible charges.

 

[Rosebud8506]

I used to work for a benefits company and we implemeted FSA''s.

You can only retrive those moneys through submitting eligible expenses that include the date of services during when you worked. Anything submitted after the date you left your company is not eligible. The only way to "collect" the money in return is through submitting these types of claims, in other words, you don''t get a check back like you would for extra Paid Time Off, etc.

Hope this answers your Q?

 

[Rosebud8506]

Date: 10/8/2007 4:04:28 PM
Author: Hudson_Hawk
You can turn in reciepts between now and March 31 (I think that''s the date) but only for 2007 reciepts. Your old company doesn''t control that money, there is a separate company who runs the flex-plan who controls the money. The only way you can cash out is for elegible charges.

Technically, her old employer is the one funding the separate company who runs the flex plans, so it in turn does go back to the employer; but by law, the employer is not obligated to pay her the funds, its just the way the IRS regulates these plans. Its yucky, and I have dealt with a lot of employees who got stuck losing thousands

 

[SuzyQZ]

Date: 10/8/2007 5:31:31 PM
Author: Rosebud8506
I used to work for a benefits company and we implemeted FSA''s.

You can only retrive those moneys through submitting eligible expenses that include the date of services during when you worked. Anything submitted after the date you left your company is not eligible. The only way to ''collect'' the money in return is through submitting these types of claims, in other words, you don''t get a check back like you would for extra Paid Time Off, etc.

Hope this answers your Q?

Rosebud, question for you, since you have a little more experience with this.

I''ve been wondering if the flip side of this is also true.

Hypothetically speaking:

If you commit to fund, let''s say, $3,000 annually into your FSA taken out in monthly installments of $250/month.

In the first couple of months you have an expensive proceedure that takes up the entire $3,000 and they remimburse you.

You quit your job shortly thereafter and they''ve only collected $500 but the FSA has paid you the entire $3,000.

They can''t collect anymore from you because you don''t work at the company and therefore no more payroll deductions.

The net result is they take a loss of $2,500.

Is this possible too???

I wondered if the FSA''s could go after employees who owe on their committment to them after they leave their employer.

 

[Rosebud8506]

Date: 10/8/2007 6:03:23 PM
Author: SuzyQZ

Date: 10/8/2007 5:31:31 PM
Author: Rosebud8506
I used to work for a benefits company and we implemeted FSA''s.

You can only retrive those moneys through submitting eligible expenses that include the date of services during when you worked. Anything submitted after the date you left your company is not eligible. The only way to ''collect'' the money in return is through submitting these types of claims, in other words, you don''t get a check back like you would for extra Paid Time Off, etc.

Hope this answers your Q?

Rosebud, question for you, since you have a little more experience with this.

I''ve been wondering if the flip side of this is also true.

Hypothetically speaking:

If you commit to fund, let''s say, $3,000 annually into your FSA taken out in monthly installments of $250/month.

In the first couple of months you have an expensive proceedure that takes up the entire $3,000 and they remimburse you.

You quit your job shortly thereafter and they''ve only collected $500 but the FSA has paid you the entire $3,000.

They can''t collect anymore from you because you don''t work at the company and therefore no more payroll deductions.

The net result is they take a loss of $2,500.

Is this possible too???

I wondered if the FSA''s could go after employees who owe on their committment to them after they leave their employer.

Suzy, this is exactly the truth. You can elect $3,000 in your Health Care Savings account for the year, go have lasik done in January with only $250 as your first deduction, then leave the company in February. The company takes the loss for the difference. It''s the risk they understand when opting to participate in these plans for their employees.

 

[SuzyQZ]

Thank you Rosebud. I thought what I wrote was true but I wasn''t 100% sure.

So I guess FSA''s are a good thing as long as both employee/company can fulfill their plan year $$ commitments.

But as they say "life happens while you are making plans" and "stuff" just happens, both ways. Both parties in this arrangement have the potential to be left holding the "short end of the stick" so to speak.

I''ve used FSA''s and really like them. I feel bad though for those who''ve paid in and don''t get their money back, it does seem so unfair. At my work it is all spelled out quite clearly and we are told repeadedly about the "use it or lose it" risk.

 

[Skippy123]

SuzyQZ, if someone takes too much money out (lasiks example) before they had their whole amount paid into the FSA plan and then quits the company, the employer will deduct money out of their final paycheck most of the time before the employer takes a loss.

 

[SuzyQZ]

Date: 10/8/2007 7:06:13 PM
Author: Skippy123
SuzyQZ, if someone takes too much money out (lasiks example) before they had their whole amount paid into the FSA plan and then quits the company, the employer will deduct money out of their final paycheck most of the time before the employer takes a loss.

Well if that''s the case then people like Alexis should (I know they can''t, but they SHOULD) be able to get any unused money back.

Doesn''t seem quite right that a company can recoup and fast forward 10 months of promised payments into one lump sum and just take it out of someone''s last paycheck. Me thinking outloud "That would have to be a mighty BIG last paycheck to be able to subtract a large lump sum FSA deduction like that."

A former employee who has unused funds is just told "sorry you''re SOL". Just doesn''t seem fair

.
I feel your pain Alexis.

It''s such a shame.

 

[Skippy123]

SuzyQZ, the way it usually works is the employee makes an election for the amount they want withheld $83 monthly or ($1000 total) and depending on the FSA company used, the employer will put up the $1,000 into an account (prepaid). That is why the employee can draw the entire amount right away. Then the employer is reimbursed. Maybe Rosebud's company is different but this is how I have seen a lot of the plans set up; it can be an accounting nightmare. ETA: I forgot to add the reason they take it out of your paycheck is if you use on of the prepaid spending cards, sorry. I think Alexis should talk to HR, sometimes they give you a certain amount of time to submit all the receipts before the money is forfeit. I do not claim to be an expert.

Here this link should help https://www.fsafeds.com/fsafeds/faq.asp#fsa10

 

[diamondseeker2006]

I ONLY have money put in one of these accounts if I have a definite amount that I know I will be charged. For example, our youngest will have braces in 2008 and that expense will be something like $3500 for the year. We''ll deduct that exact amount. We don''t mess around with over-the-counter meds and that kind of unknown thing. But the tax savings for a larger ticket item is worth it, if you know about the expense in advance.

It sounds like to me that some companies aren''t doing a good job explaining the policies, or they are providing the info and people are not reading it. We have always known that you forfeit any money that you do not provide legitimate receipts for. It''s not like a 401K where the money you put in is always yours.

 

[Rosebud8506]

Skip: its true, there are companies whose plans differ from one another, so I''m just using my past experience on what I have actually seen happen, but I''m sure the majority of companies now have a way to retract the moneys in the final paycheck. When I worked for my company, the card was not very popular and was just coming out. Many employers refrain from using it simply because the IRS does audit transactions a few times a year, and that can get ugly if you go to a Rite Aid and buy bandaids, your Rx and then a pack of gum on the card - trying to produce a receipt for that $1.00 pack of gum can be a headache. A lot of angry employees end up having to write a check for the amount that was the non-eligible purchase.

I agree, a lot of employers do need to be very knowledgable of the way this plan works in order to explain it to their employees during Open Enrollment - I mean, it''s great for a family who has a lot of medical expenses, or Rx''s that pay out of pocket.

 

[MustangGal]

I know that some FSA''s you can continue on COBRA, so you would be able to continue submitting receipts for 14 months I believe. I work in benefits, but we don''t have either type of plan, so this is just what I remember from a COBRA seminar.

 

[~*Alexis*~]

Unfortunately I did not elect cobra coverage. The cost of the plan out of pocket was WAYY to much for me to afford. When I contacted the service line they said the money in the account would not cover cobra....

This is the largest health company in the US....go figure they would try and screw people over!

The other thing is that when they offered it to us, they never explained that we would never get that money back or that it was prepaid by them. We were just told that the money put in was deducted from our checks.

 

[lili]

Date: 10/8/2007 6:03:23 PM
Author: SuzyQZ

Date: 10/8/2007 5:31:31 PM

Author: Rosebud8506

I used to work for a benefits company and we implemeted FSA''s.


You can only retrive those moneys through submitting eligible expenses that include the date of services during when you worked. Anything submitted after the date you left your company is not eligible. The only way to ''collect'' the money in return is through submitting these types of claims, in other words, you don''t get a check back like you would for extra Paid Time Off, etc.


Hope this answers your Q?

Rosebud, question for you, since you have a little more experience with this.


I''ve been wondering if the flip side of this is also true.


Hypothetically speaking:


If you commit to fund, let''s say, $3,000 annually into your FSA taken out in monthly installments of $250/month.


In the first couple of months you have an expensive proceedure that takes up the entire $3,000 and they remimburse you.


You quit your job shortly thereafter and they''ve only collected $500 but the FSA has paid you the entire $3,000.


They can''t collect anymore from you because you don''t work at the company and therefore no more payroll deductions.


The net result is they take a loss of $2,500.


Is this possible too???


I wondered if the FSA''s could go after employees who owe on their committment to them after they leave their employer.

I don''t know about how other FSA works, but the way mine work is that they''ll reimbursed you what they''ve collected so far from your paycheck.
So if you have only $250 in your account, that''s all you get for now. You''ll have to until the next month when they collect another $250 to get reimbursed for another $250 and so forth. They won''t reimbursed you the full $3000 just because you elect that you will put in $3000 and you only have $250 in your account.

 

[Rosebud8506]

lili, thats correct if its a dependent care flex account and or a commuter (parking and mass transit) account. healthcare works the opposite and you are able to use the funds up front even if they don''t have all your deductions right away.

 

[lili]

Date: 10/9/2007 7:09:00 PM
Author: Rosebud8506
lili, thats correct if its a dependent care flex account and or a commuter (parking and mass transit) account. healthcare works the opposite and you are able to use the funds up front even if they don''t have all your deductions right away.

That''s interesting. That''s nice of them to let you do that. It''s essentially using their money interest free.