I participate in a flexible spending account for health care expenses provided through my work. I contribute the maximum and use it up every year.
This year it’s probable I’ll be retiring about mid-year. To date, I’ve already overspent against my FSA, a little, and thought I had better not use it anymore lest I owe it money when I leave. But I thought to research that assumption online, and it seems like one can use up the entire year’s worth of FSA credit, leave the company, and they cannot collect the rest from you.
Am I reading that right? I’d go and ask our HR person, but I don’t want to clue my company in that I’m looking at retiring soon.
When I took an early retirement offer 5 years ago, I left on November 1st and had used up my entire FSA of $1000. Neither the company nor the FSA administrator ever approached me about paying back the unfunded amount.
You’re reading it right. It’s the flipside of the Use-it-or-Lose-it rule. Participants risk losing their funds if they don’t plan carefully. Employers risk losing funds if an employee terminates, whether voluntarily or otherwise.
Don’t worry about your company attempting collection efforts. They can ask for but can’t insist on repayment. Most don’t even ask.
Thanks for the replies, all. That’s how I read it, too, but I wanted feedback.
Well, I’ll use it all up, then. There are still a few hundred dollars in there, and we always need OTC vision and digestive stuff, and I’ll see which of my prescriptions I can currently max out.