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Lori, Research Analyst
Category: General
Satisfied Customers: 4131
Experience:  General Information and Online Research
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Flex Spending Reimbursement & Termination

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I was enrolled in a Flex Spending Account. I submitted a claim for reimbursement. There was a delay in reimbursement requesting a more detailed piad invoice from the service provider. Subsequently, I was terminated for lack of work. I received reimbursement for my claim. However, it was reduced to the balance amount in my Felx Spending account at the time of termination. Is this correct? I thought that claims were were reimbursed in full at any time during the year as long as they do not exceed the annualized amont? I looks as though reimbursement of my claim was delayed so as to not have to pay off the entire amount, knowing of my impending termination ahead of time.
Submitted: 10 years ago.
Category: General
Expert:  Lori replied 10 years ago.
If the account had not been fully funded, they are not obligated to reimburse you the entire amount of the claim. Your flexible spending account is only obligated to reimburse you the amount of money that is available in the account at the time of termination. If you had been terminated earlier in the year and a claim had been paid that exceeded the balance of your account, you would be liable to reimburse your employer for the overpayment on the claim. They could withhold pay in order to cover this deficit in amount paid and amount in the account. You would have to prove that there were sufficient funds in your flex account to cover payment of the claim at the time service was rendered in order to receive the tax benefits.
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