If you are terminated or quit employment with Simple HR, there are specific procedures that will apply regarding the Flexible Spending Account (FSA).    

If you have a negative balance in the FSA because you have already submitted claims up to your annual maximum but you have not paid in enough during the year; this balance will need to be repaid at time of termination.  Typically we will try to have any negative balance repaid on the final check and, if necessary, issue a zero check.  However, if a balance is still due you will receive a letter from Simple HR asking for repayment of any outstanding balance.

If you have a positive balance in the FSA at the time of termination, you will have a couple of options available and we will use the following case as an example:

For purposes of this example let’s say that you terminate your employment in July and you have NOT used any of your FSA year-to-date.  You elected $1,000 in the FSA for the year and to date you have paid in $500.  You have NOT had any claims so far.  Your options are-

1. You can elect to remain as an active participant in the FSA, even as a terminated employee by participating in COBRA.  You will still need to send in payments to Simple HR and they will not be pre-taxed.  The advantage is that you can still have access to your annual election of $1,000 for the rest of the year.
   
   
2. The most common option is to file your claims through the end of the calendar year for the balance that you have in the FSA up to the time you were terminated.  You cannot file for the entire election amount when you enrolled in the program.  You still remain as an active participant only for the submission of your reimbursements.
   
   
3. With both options listed above, you still are subject to the “use or lose” rule.    

 

Please contact the Simple HR Benefits Department for further information.