My money is gone?

[ataanis]

I got laid off from my job on 7/1 and my FSA card has been deactivated shortly after.

The company(XYZ) my employer (A) worked with, provided employees with credit cards they could use that had the amount they've elected in the beginning of the year. Comp A takes money from my paycheck every month and XYZ gets paid every month that x amount.

I am told today by company XYZ that if I haven't used the money by 7/1, it's all the money contributed until then is all theirs to keep...
Is this normal? If it is, I am seriously considering getting into the business as it sounds like they make a lot of money in a recession time like the ones we are in now !!

Any thoughts?

Thanks!!

[ecmst12]

Yes, it is normal to cut off the FSA when employment terminates. Normally you have a certain amount of time (30-90 days) to submit claims for services received prior to the termination date (in this case, 7/1), but you can't submit for claims after that date.

It is a double edged sword though. With an FSA, you can use the whole amount you are SCHEDULED to contribute for the whole year, on January 1 if you like. If employment terminates when you have a NEGATIVE balance on the account, they can't go after you for repayment of that. But if there's a positive balance in there, the money is gone, you can't get it back.

[cbg]

And what ecmst12 is talking about is Federal law, not your employer being greedy.