Overcertified
Junior Member
What is the name of your state (only U.S. law)? Resident NJ, Employed NY
This is a doosy.
I was terminated in early 2010 2nd quarter towards the beginning of the month.
I selected a FSA (for myself, I have no spouse or children), for several thousand dollars (about $2500), figuring about $200/Month I would need for my medications.
I have also elected COBRA, which I was on for the remainder of the year (actually, I am still on COBRA).
In my termination letter, there was a section that indicated that I could continue to contribute AFTER tax money to keep the FSA going, but the COBRA agency did not ever ask me, did not offer any options, and never billed me.
My FSA is via a FSA Credit/Debit card.
After the end of the termination month, and for the rest of the year, I continued to use the FSA account and drained it dry. The credit card kept working, kept paying for the medications, the insurance company showed the claims as being paid, and no one has asked me for a dime.
I would say about half of my yearly FSA account target (say half of the $2500) was expended by the end of the last day of the month of termination, but I did not contribute that much, I was underfunded.
To make things worse or more interesting, during my severance my former employer was deducting the FSA contributions from my severance check, and then must have realized something, and credited the money back to me. In other words, they took out a few FSA deductions, and then gave me back the money they took. (I didn't relaize it, I never asked for the money back). [let me be maybe more clear - these deductions were taken out of severance AFTER I was terminated, and after the last day of employment]
I actually have other eligible FSA purchases that I could have taken during January before I got the credit card, and some other eligible purchases still before termination, but I figured at the rate I was going, not to go back and request a claim to be paid since at my speding rate I would expend the $2500 anyway. [which was my thinking before I was let go. I didn't really think about it when I was terminated, I guess I wasn't thinking straight]
So, first question: How does COBRA really affect the FSA, especially when the FSA is underfunded at termination?
The 2nd question is: Since the company that I worked at and the insurance company both didn't stop the purchases and allowed the FSA card to continue to the end of the year, what is my liability? I know that any purchases that were paid on the credit card/debit card before termination - even though unfunded, is probably not my problem, but what about the unfunded but paid FSA purchases that were honored after termination, but while still being covered by COBRA?
I am really wondering since no one is coming after me.
This is a doosy.
I was terminated in early 2010 2nd quarter towards the beginning of the month.
I selected a FSA (for myself, I have no spouse or children), for several thousand dollars (about $2500), figuring about $200/Month I would need for my medications.
I have also elected COBRA, which I was on for the remainder of the year (actually, I am still on COBRA).
In my termination letter, there was a section that indicated that I could continue to contribute AFTER tax money to keep the FSA going, but the COBRA agency did not ever ask me, did not offer any options, and never billed me.
My FSA is via a FSA Credit/Debit card.
After the end of the termination month, and for the rest of the year, I continued to use the FSA account and drained it dry. The credit card kept working, kept paying for the medications, the insurance company showed the claims as being paid, and no one has asked me for a dime.
I would say about half of my yearly FSA account target (say half of the $2500) was expended by the end of the last day of the month of termination, but I did not contribute that much, I was underfunded.
To make things worse or more interesting, during my severance my former employer was deducting the FSA contributions from my severance check, and then must have realized something, and credited the money back to me. In other words, they took out a few FSA deductions, and then gave me back the money they took. (I didn't relaize it, I never asked for the money back). [let me be maybe more clear - these deductions were taken out of severance AFTER I was terminated, and after the last day of employment]
I actually have other eligible FSA purchases that I could have taken during January before I got the credit card, and some other eligible purchases still before termination, but I figured at the rate I was going, not to go back and request a claim to be paid since at my speding rate I would expend the $2500 anyway. [which was my thinking before I was let go. I didn't really think about it when I was terminated, I guess I wasn't thinking straight]
So, first question: How does COBRA really affect the FSA, especially when the FSA is underfunded at termination?
The 2nd question is: Since the company that I worked at and the insurance company both didn't stop the purchases and allowed the FSA card to continue to the end of the year, what is my liability? I know that any purchases that were paid on the credit card/debit card before termination - even though unfunded, is probably not my problem, but what about the unfunded but paid FSA purchases that were honored after termination, but while still being covered by COBRA?
I am really wondering since no one is coming after me.
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