topic FSA repayment to employer in Retirement tax questions

FSA repayment to employer

EWS — Tue, 31 Dec 2019 15:16:29 GMT

I worked for an employer that offered an fsa cafeteria plan. I contributed $250 yearly, and about $10 was taken from each check. I left the company in September but had already used the entire $250 for qualified medical expenses. I received a note asking me to repay the company about $80, since the full $250 wasn’t withheld from my check over the course of the full year. Am I required to repay that money or is that illegal for my employer to ask me to do that? Thank you!

Re: FSA repayment to employer

rjs — Tue, 31 Dec 2019 17:11:07 GMT

You do not have to repay the money. Your employer doesn't understand how a health care FSA works. The plan has to pay the full amount that you signed up for, even though you left the company before you contributed the full amount. Tell them to consult their tax advisor about it.

Re: FSA repayment to employer

Critter — Tue, 31 Dec 2019 22:25:57 GMT

This is the other side of the use it or lose it clause...if you leave the job you keep any excess you used...the FSA plan administrator needs to educate the employer.