FSA question

[mikeab9545]

What is the name of your state? Oklahoma

I elected in an FSA at my work, i was fired on the 17th of october, it is my understanding that enrollment in the plan expires when an employee is no longer with the company, is this correct? My problem is that my company did not deduct from my checks correctly and has taken the entire amount i have used from my plan from my severence pay. Is this legal? The way i read the law is that an employeer cannot charge an ex employee for the amount claimed that exceeds the amount contributed. Further more i have a statement from the FSA provider showing $525 in contributions.

 

[ecmst12]

I hope they at least deducted it pre-tax. Even if they did, though, it sounds fishy, but it may be legal. I'll have to wait for the experts. You agreed to have an amount deducted from your pay, and your severance is probably still considered wages, I just don't know if they're bound to only take out the amount you agreed per week, or if they can take out up to the agreed yearly amount.

 

[Beth3]

What is the name of your state? Oklahoma

I elected in an FSA at my work, i was fired on the 17th of october, it is my understanding that enrollment in the plan expires when an employee is no longer with the company, is this correct? My problem is that my company did not deduct from my checks correctly and has taken the entire amount i have used from my plan from my severence pay. Is this legal? The way i read the law is that an employeer cannot charge an ex employee for the amount claimed that exceeds the amount contributed. Further more i have a statement from the FSA provider showing $525 in contributions.

Yowsa. No, they can't do that. They cannot make any larger deductions from your severance pay than they did from your regular paychecks. If an employee resigns or is fired and their reimbursed eligible expenses exceed the amount actually deducted from the employee's paycheck as of that date, then that's just the way it is. FSA reg's are intended to put the employer at risk in this manner.

Contact the federal Department of Labor and file a complaint.

 

[ecmst12]

Or the IRS...

 

[moburkes]

What do you mean by "they didn't deduct correctly"? If your deductions were only $45, and they should have been $100, they are allowed to correct their error. However, if you used $1300, and only paid $900, then they cannot collect the additional $400 from your last paycheck.

 

[mikeab9545]

What do you mean by "they didn't deduct correctly"? If your deductions were only $45, and they should have been $100, they are allowed to correct their error. However, if you used $1300, and only paid $900, then they cannot collect the additional $400 from your last paycheck.

they made no deductions. took out $0 dollars. However the amount they are trying to recoup is not the amount they should have deducted, rather is it exactly the amount i have claimed year to date.

 

[moburkes]

they made no deductions. took out $0 dollars. However the amount they are trying to recoup is not the amount they should have deducted, rather is it exactly the amount i have claimed year to date.

When did you notice that they made no deductions? How much of your paycheck was left after they made the corrections? How many hours did you work for that pay period?

 

[mikeab9545]

the only time i looked at that part of my check was at the end of august when i made a claim on it, there were 2 sections of my check showing deductions for medical, and one was around 400 which was about what they should have deducted ytd. what i learn now is that they had not made any deductions ytd for the FSA plan. The check they took all of it from was my vacation pay of which i was left with $300 from the $800 it should have been.

 

[moburkes]

the only time i looked at that part of my check was at the end of august when i made a claim on it, there were 2 sections of my check showing deductions for medical, and one was around 400 which was about what they should have deducted ytd. what i learn now is that they had not made any deductions ytd for the FSA plan. The check they took all of it from was my vacation pay of which i was left with $300 from the $800 it should have been.

They are allowed to make corrections, and since it was a vacation check, and not for hours worked, I believe that what they did was legal.

 

[ecmst12]

Either way OP agreed to have deductions taken from the check. Whether it was legal depends on whether the correct amount was taken out. They were allowed to take what SHOULD have been deducted since the beginning of the year, no more and no less.

 

[pattytx]

Which also serves to prove the admonition that all employees should carefully review EVERY paycheck in detail, especially when making a change to benefits or taxes, to make sure the change is processed properly and in a timely manner.