If I leave my company before the end of the year, do I owe them for FSA

March 29, 2017 9:25 AM

I have an FSA to which I contribute (for example) $10 per month for a total of $1200 for the year. FSA rules allow me to use the entire $1200 before the end of the year, and the ongoing deductions from my pay will eventually fully fund the account. What happens if I use the entire $1200 before quitting my job on, say June 30? I will have paid in only $600. Am I responsible for the rest?

There is an existing AskMe on this subject, but it’s from 2006 – the rules may not be the same now. In 2006, the answer was that I would not be responsible for fully funding the account.

posted by Dolley to Work & Money (10 answers total)

Best answer: Still not.
posted by praemunire at 9:27 AM on March 29, 2017 [2 favorites]

Best answer: Nope. Use it all up!
posted by something something at 9:28 AM on March 29, 2017 [2 favorites]

Best answer: I'm assuming you are talking about a healthcare FSA, and I believe answers above apply for healthcare FSAs only. Other FSAs (dependent care, parking/transit) might have different rules.
posted by ThePinkSuperhero at 9:32 AM on March 29, 2017 [1 favorite]

Best answer: I wasn't here in 2006, so I'll contribute my anecdote.

I quit a job with my healthcare FSA entirely spent, my company withheld the overspent amount from my last paycheck. After weeks of arguing with ex-company's HR about it, I filed a wage claim with my state department of labor. I had a check in the mail a few weeks later. The company got a nasty letter.

tldr: law still stands, know your rights, and complain loudly if they're violated.
posted by JoeZydeco at 9:33 AM on March 29, 2017 [9 favorites]

The other kind of FSA, for dependent care, is pay-as-you-go, so you won't have the full-year balance available anyway.
posted by Huffy Puffy at 9:38 AM on March 29, 2017 [1 favorite]

Best answer: Employee Benefits Manager Here:

FSAs are risky. The risk the employer takes is that you won't spend it all and leave before contributing fully. They are not allowed to recover that money from you.

The risk the employee takes is that they can spend it all before the end of the plan year. Otherwise it is lost.
posted by magnetsphere at 9:51 AM on March 29, 2017 [7 favorites]

Best answer: Yep, +1 for "I've done it and not had to pay it back."
posted by jeffamaphone at 10:37 AM on March 29, 2017 [1 favorite]

Best answer: Just make sure your claims for reimbursement fall within the date ranges you were employed.

(eg my previous job, benefits year ran 01-June to 31-May. I left at the end of July, so I could only submit for expenses incurred in June up to my last day in July. I could submit up to my FSA election, even though I hadn't contributed the full amount.)
posted by k5.user at 11:18 AM on March 29, 2017 [1 favorite]

Best answer: An employer explained to me that the FSA accounts are budgeted in for a whole year of payments per employee. No adjustments are made to account for ones who leave before the year is up. As far as new employees are concerned, the FSA kicked in after three months. The budget accounts for all of this.
posted by Midnight Skulker at 12:31 PM on March 29, 2017 [1 favorite]

Best answer: I left two jobs last year, so I went through this twice. In one job HR told me I had until the end of the year to use up my Healthcare FSA, and I got the full amount even though I had only contributed for 7 months. Then I lasted 50 days at a job, and the outsourced HR told me I had until the end of the next month to use up the full amount, even though I had only contributed for 2 months.

And that is how I ended up with 2.5 years worth of contact lens.
posted by COD at 12:59 PM on March 29, 2017 [10 favorites]