# I pit whoever wrote the rules for flexible spending accounts, causing me to lose $200. **URL:** \ **Category:** The BBQ Pit\ **Created:** [May 21, 2015, 3:35pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523 "2015-05-21T15:35:00Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [May 21, 2015, 6:59pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/21 "2015-05-21T18:59:47Z")
> [@bup](#): > > Company. But people that have spent more than their deposits thus far also don’t have to pay the difference. So the company running your FSA takes some hits, too. Which doesn’t help me. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 21, 2015, 7:21pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/22 "2015-05-21T19:21:23Z")
> [@davidm](#): > > My employer used a benefits administration company, so it probably went to that company. Money is fungible so that’s probably true in a theoretical sense, but your company likely pays it’s TPA as a matter of course on a monthly or periodic basis. The unused portion of your contributions will likely not be reconciled until a later date, and is likely unplanned for by the company. In that sense, the forfeited amounts result in a windfall to the company. This is how we did it at one of my previous companies. ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [May 21, 2015, 7:23pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/23 "2015-05-21T19:23:24Z")
So they laid me off and got my FSA money. Damn. ---
**Author:** ![Fallen](https://avatars.discourse-cdn.com/v4/letter/f/e99b99/32.png) [@Fallen](https://boards.straightdope.com/u/Fallen)\ **Post date:** [May 21, 2015, 9:46pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/24 "2015-05-21T21:46:22Z")
Maybe won’t help you, but I’d pester the company about giving people advance notice of lay-off (which is the right thing to do, wherever possible) so that they can spend X. Could be worse, I suppose. You might’ve been one of those people who contributed the max per year with a future dental issue in mind (for example) and already had $800+ in there unspent, yes? I don’t use them, but I should think that either the rules or the benefit management company would find a way to delay in any scenario where it was being presented with a $2550 claim (max in 2015) and the person had only deposited, say, $800+ so far. ---
**Author:** ![GrumpyBunny](https://avatars.discourse-cdn.com/v4/letter/g/bc8723/32.png) [@GrumpyBunny](https://boards.straightdope.com/u/GrumpyBunny)\ **Post date:** [May 21, 2015, 10:39pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/25 "2015-05-21T22:39:34Z")
> [@SpoilerVirgin](#): > > I’m sorry about your situation, but appreciate you sharing this information. I have had an FSA for many years, but never realized that I would lose the funds if I was laid off. It pays to read the fine print. On the other side, if you’re laid off and you had more paid out from the FSA than you put in, the company has to eat it. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [May 22, 2015, 12:11am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/26 "2015-05-22T00:11:48Z")
Factual question: are FSAs easier to set up or cheaper to manage by the employer than HSAs or HRAs (no use-it-or-lose-it provisions in those, and they work similarly)? I believe HRAs might be more expensive, but not sure about HSA. Thankfully I have an HSA. > [@Yllaria](#): > > You can itemize, but you only get to deduct the itemized amount if it’s more than, I think, 2% of your income. I may have qualified for that once. The health account works for any amount. For someone with a chronic condition, who knows that she’ll spend X per month on prescriptions, it can work. It’s easy to guess wrong or to lose receipts, but it can work. 2% of **work** expenses, not applicable to Schedule C. As others have said, it is currently 10% of medical, but it was 7.5% in previous years. It is still 7.5% if you are over 65. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 22, 2015, 12:16am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/27 "2015-05-22T00:16:07Z")
> [@thelurkinghorror](#): > > Factual question: are FSAs easier to set up or cheaper to manage by the employer than HSAs or HRAs (no use-it-or-lose-it provisions in those, and they work similarly)? I believe HRAs might be more expensive, but not sure about HSA. Thankfully I have an HSA. Not sure about the cost to administer, but the population of eligible expenses under each plan is not the same. ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [May 22, 2015, 12:40am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/28 "2015-05-22T00:40:13Z")
> [@Fallen](#): > > Maybe won’t help you, but I’d pester the company about **giving people advance notice of lay-off** (which is the right thing to do, wherever possible) so that they can spend X. That ain’t likely to happen often. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [May 26, 2015, 4:02pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/29 "2015-05-26T16:02:33Z")
> [@Terr](#): > > I wish. It is now 10%. Damn. Thanks for the update. You can tell how long it’s been since I bothered using that section. ---
**Author:** ![black\_rabbit](https://avatars.discourse-cdn.com/v4/letter/b/f19dbf/32.png) [@black\_rabbit](https://boards.straightdope.com/u/black_rabbit)\ **Post date:** [May 27, 2015, 1:19am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/30 "2015-05-27T01:19:13Z")
> [@GrumpyBunny](#): > > On the other side, if you’re laid off and you had more paid out from the FSA than you put in, the company has to eat it. Or even if you just up and quit. If you max out your contributions (something like $2,550 a year, I think?) and quit on February 1 after incurring and being reimbursed for $2,550 in expenses in January, your former employer is on the hook for the balance. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [May 27, 2015, 1:52am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/31 "2015-05-27T01:52:31Z")
Look into whether you can continue via a form of[COBRA:](http://member.flex125.com/article/14787/24107/What-happens-to-my-FSA-after-termination.)not all plans allow this, but if you can, then you can continue making post-tax contributions. The advantage there is that you can then use all the accumulated funds for expenses incurred after you leave, as long as you’re still making the contributions. Example: You put 100 dollars a month in, and leave at the end of March. In April, you break your leg. Your copay for that is 500 dollars. If you’ve COBRA’ed the account, you’ve contributed 400 dollars total, and you can use that to pay for the medical expenses. Yeah, a flex account can screw you, so it’s definitely a good idea to front-load expenses as much as possible. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [May 27, 2015, 1:58am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/32 "2015-05-27T01:58:58Z")
> [@black\_rabbit](#): > > Or even if you just up and quit. If you max out your contributions (something like $2,550 a year, I think?) and quit on February 1 after incurring and being reimbursed for $2,550 in expenses in January, your former employer is on the hook for the balance. Heh - yep. I worked for a firm that had its fiscal year from July 1 to June 30th. We were sold to another company effective October 1. So that year, I’d put aside 3 months of FSA money - let’s say 200 a month, or a total of 600 dollars. Well, in the 3 months from July to September, I had about 1,000 in expenses. I actually wouldn’t have filed for more than the 600 dollars, but the old company’s medical insurance would automatically send claims to flex spending for my share. So, I got 1,000 dollars. I called the FSA administrator to try to find out how to repay the 400 dollars. They shrugged and said “call HR”. I called HR, who shrugged and said to call the FSA administrator. At that point I just gave up. > [@TheLurkingHorror](#): > > Factual question: are FSAs easier to set up or cheaper to manage by the employer than HSAs or HRAs (no use-it-or-lose-it provisions in those, and they work similarly)? I believe HRAs might be more expensive, but not sure about HSA. Thankfully I have an HSA. Just guessing but I’d bet the FSA is cheaper (net) than the HSA simply because the employer never gets to keep any of the HSA money, but they probably keep FSA contributions more than they overpay (see above). On the other hand, if you’ve got an HSA, it’s because you’re offering a high deductible health plan, which is costing you a lot less (even if you chip in on some of the contributions). I don’t know the difference between an HRA and a HSA, so no clue there. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [May 27, 2015, 5:23am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/33 "2015-05-27T05:23:54Z")
> [@Mama\_Zappa](#): > > I worked for a firm that had its fiscal year from July 1 to June 30th. Thanks for mentioning - I was going to say that companies don’t always use the calendar year. I briefly wondered why I only got 25% of my HSA contribution (and nobody told me the amount without calling - see below). But it works out to the prorated period of time from when I was hired to the fiscal year (July 1 to June 30 or something like that?). > [@](#): > > So, I got 1,000 dollars. I called the FSA administrator to try to find out how to repay the 400 dollars. They shrugged and said “call HR”. I called HR, who shrugged and said to call the FSA administrator. > > At that point I just gave up. Welcome to bureaucracy! The worst time I experienced this, I drove the 200 miles to sort it out, which was easier than repeated faxes. I expect to experience many more worse examples in the future. > [@](#): > > Just guessing but I’d bet the FSA is cheaper (net) than the HSA simply because the employer never gets to keep any of the HSA money, but they probably keep FSA contributions more than they overpay (see above). It was very briefly mentioned above, but if there was a definite answer, I missed it – it’s not the _employer_ that keeps it but their _administrator_ that does right (or govt)? Or else many employees are getting laid off in a very specific window every year. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 27, 2015, 5:59am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/34 "2015-05-27T05:59:15Z")
> [@thelurkinghorror](#): > > It was very briefly mentioned above, but if there was a definite answer, I missed it – it’s not the _employer_ that keeps it but their _administrator_ that does right (or govt)? Or else many employees are getting laid off in a very specific window every year. The employer keeps it and is able to choose what to do with it. One option is to offset reasonable administrative fees associated with the FSA. This option means that the employer keeps it. I can think of no option where the government gets it. ---
**Author:** ![russian\_heel](https://avatars.discourse-cdn.com/v4/letter/r/f05b48/32.png) [@russian\_heel](https://boards.straightdope.com/u/russian_heel)\ **Post date:** [May 27, 2015, 6:44am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/35 "2015-05-27T06:44:56Z")
Im not bright at all when it comes to this stuff. For years my company has offered me a FSA but Ive passed every year. My thinking is, why would I deposit $1000 into an account that Im not sure if I will use, knowing the unused portion will be gone, when I can just pay as I go? As the saying goes, dont invest in something you dont understand; so in simplest terms why would I do a say, $1000 FSA—based on what I gather theres a perceived tax benefit? Let’s assume I estimate theres a 50/50 chance Ill go through all $1000, maybe 40% Ill use $900 and lose $100 . . . or are these bad odds? ---
**Author:** ![Enola\_Gay](https://avatars.discourse-cdn.com/v4/letter/e/3ab097/32.png) [@Enola\_Gay](https://boards.straightdope.com/u/Enola_Gay)\ **Post date:** [May 27, 2015, 8:10am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/36 "2015-05-27T08:10:27Z")
Has this ever been challenged in court? We put thousands is HSA every year (we have kids so we always use it) & I had no idea you would lose the balance if THEY lay you off! Total bullshit. ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [May 27, 2015, 11:47am UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/37 "2015-05-27T11:47:57Z")
> [@russian\_heel](#): > > Im not bright at all when it comes to this stuff. For years my company has offered me a FSA but Ive passed every year. My thinking is, why would I deposit $1000 into an account that Im not sure if I will use, knowing the unused portion will be gone, when I can just pay as I go? > > As the saying goes, dont invest in something you dont understand; so in simplest terms why would I do a say, $1000 FSA—based on what I gather theres a perceived tax benefit? Let’s assume I estimate theres a 50/50 chance Ill go through all $1000, maybe 40% Ill use $900 and lose $100 . . . or are these bad odds? The benefit is that the money you put into the FSA is pretax, so you don’t pay federal or state income tax on it. So if you deposit $1000 into the FSA, and spend it all, you’ve saved $300 (assuming a 25% tax bracket and 5% state tax) against just spending that $1000 out-of-pocket. If you really do routinely go through the year with very little out-of-pocket medical expenses, then FSAs are probably not for you. But a lot of us can be pretty damn sure of some expenses we will always have - maintenance prescriptions, various specialist visits, eye exams, orthodontists, etc. etc. > [@Enola\_Gay](#): > > Has this ever been challenged in court? We put thousands is HSA every year (we have kids so we always use it) & I had no idea you would lose the balance if THEY lay you off! Total bullshit. HSAs are different. There’s no forfeit requirement for them - unused money stays in the account year to year, and you get to keep it if you leave a job. Unlike FSAs however, you can’t pre-spend the money - if you have a $1000 expense in January, but there’s only $200 in the account, you’ve got to come up with the $800 out of pocket. Though you can reimburse yourself later from the HSA, as long as you keep good records. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [May 27, 2015, 1:17pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/38 "2015-05-27T13:17:16Z")
> [@Enola\_Gay](#): > > Has this ever been challenged in court? We put thousands is HSA every year (we have kids so we always use it) & I had no idea you would lose the balance if THEY lay you off! Total bullshit. You don’t forfeit _H_SA contributions. FSAs are an older and shittier version. ---
**Author:** ![Enola\_Gay](https://avatars.discourse-cdn.com/v4/letter/e/3ab097/32.png) [@Enola\_Gay](https://boards.straightdope.com/u/Enola_Gay)\ **Post date:** [May 27, 2015, 2:23pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/39 "2015-05-27T14:23:19Z")
So has anyone who had an experience like the OP taken an _FSA_ to court? I read about the differences between HSA & understand better now, but what happened to the OP still seems very wrong, regardless of the fine print. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [May 27, 2015, 2:43pm UTC](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523/40 "2015-05-27T14:43:49Z")
On what grounds? Yes, it’s stupid, but it’s disclosed pretty clearly up front during annual enrolment. This isn’t the sort of thing that gets buried in a footnote on page 17 of a handout. If you don’t pay attention to your benefits materials, that’s your problem. [Previous page](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523.md?page=1) [Next page](https://boards.straightdope.com/t/i-pit-whoever-wrote-the-rules-for-flexible-spending-accounts-causing-me-to-lose-200/720523.md?page=3)