What is the name of your state (only U.S. law)? Virginia
During an exit interview with my previous employer, an HR representative told me I could continue to use my Dependent Care FSA throughout the year. I followed up with an email to confirm, and she replied with the policy in writing (emphasis is mine).
When I tried to use the account the month following my separation with the company, the FSA provider's website wouldn't allow me to enter the expense. I contacted the HR department again and now they say I could only use the account while actively employed. After some back-and-forth, they sent screenshots of other documentation stating I have to be actively employed. I don't have access to those documents now and I don't have copies of what they said at the time of my employment. The most current information I had was the policy above that they emailed me.
There is no IRS regulation that I've seen covering what happens to a Dependent Care FSA after termination of employment - only that it must be used within the same plan year. This seems to be up to the employer, so I think the terms stated to me are valid. Also, the Dependent Care FSA is not pre-funded by the employer - it only contains funds that were withheld from my income.
Can I hold them to the statements and policy they gave me in writing during my out-processing?
During an exit interview with my previous employer, an HR representative told me I could continue to use my Dependent Care FSA throughout the year. I followed up with an email to confirm, and she replied with the policy in writing (emphasis is mine).
"I apologize for any confusion, below is from our Summary Plan Description, outlining what happens to your flexible spending accounts upon termination. Based on this, you have the ability to submit medical claims for expenses incurred through the period for which payments to the FSA have already been made, which is March. For the Dependent care, you can continue to submit claims through the plan year.
What happens if I terminate employment?
If you terminate employment during the Plan Year, your right to benefits will be determined in the following manner:
(a) You will remain covered by insurance, but only for the period for which premiums have been paid prior to your termination of employment.
(b) You will still be able to request reimbursement for qualifying dependent care expenses incurred during the remainder of the Plan Year from the balance remaining in your dependent care account at the time of termination of employment. However, no further salary redirection and Employer contributions will be made on your behalf after you terminate. You must submit claims within 90 days after the end of the Plan Year in which termination occurs.
..."
What happens if I terminate employment?
If you terminate employment during the Plan Year, your right to benefits will be determined in the following manner:
(a) You will remain covered by insurance, but only for the period for which premiums have been paid prior to your termination of employment.
(b) You will still be able to request reimbursement for qualifying dependent care expenses incurred during the remainder of the Plan Year from the balance remaining in your dependent care account at the time of termination of employment. However, no further salary redirection and Employer contributions will be made on your behalf after you terminate. You must submit claims within 90 days after the end of the Plan Year in which termination occurs.
..."
When I tried to use the account the month following my separation with the company, the FSA provider's website wouldn't allow me to enter the expense. I contacted the HR department again and now they say I could only use the account while actively employed. After some back-and-forth, they sent screenshots of other documentation stating I have to be actively employed. I don't have access to those documents now and I don't have copies of what they said at the time of my employment. The most current information I had was the policy above that they emailed me.
There is no IRS regulation that I've seen covering what happens to a Dependent Care FSA after termination of employment - only that it must be used within the same plan year. This seems to be up to the employer, so I think the terms stated to me are valid. Also, the Dependent Care FSA is not pre-funded by the employer - it only contains funds that were withheld from my income.
Can I hold them to the statements and policy they gave me in writing during my out-processing?