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Paying back a FSA loan...? Missouri

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  • Paying back a FSA loan...? Missouri

    I recently turned in my three weeks notice for a company I have worked for. I was there the entire 3 weeks. I am now being told that my final check is going to be takin for a outstanding FSA loan that the company offers. Was told by HR that this would not have to be paid back. I have bills to pay that are coming directly out of my checking, so that check isn't in there on Friday, they are all gonna bounce...The orginal agreement I signed states that I agreed to have this deducted per pay. nothing on agreement talking about upon termination or employee leaving compnay, due in full. What are my rights. Any response appreciated.

  • #2
    FSA loan? Do you mean you've been reimbursed for more medical expenses from your FSA than you have contributed year to date?
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    • #3
      Yes that is correct. The total was $2600, I have paid in $1300, leaving a balance of $1300. I would also like to mention that no other employee has ever had to pay this back. I was in the accounting department there so I do have proof of this.

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      • #4
        also would like to mention that HR didn't do an exit interview, never discussed this with me. The Friday that was my last day. I left with my keys and parking garage pass, which i have turned in since then. Left on good terms, and have been helping via phone with questions from the new girl.

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        • #5
          The company cannot require that you "repay" any expenses that are in excess of your contributions to date.

          Who told you this? Since you didn't have an exit interview, call HR/Benefits immediately. They should know (one would hope), that the law doesn't permit this.
          Last edited by Pattymd; 07-08-2010, 04:55 AM.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            The HR person is calling and leaving messages...I have not received my last paycheck, supposed to be direct deposited into my checking account tomorrow. He told the girl that does payroll that he canceled my check through adp, and is holding it for payment of the excess of FSA account. Everything I have read on the MO labor law, says that they can sue me for it but cannot withhold my last check.

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            • #7
              It's an IRS tax restriction, not MO wage and hour law.

              I don't have the cite right at hand, but I'll see if I can find it this afternoon, if someone else doesn't post it by then.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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              • #8
                Thank you for all of your help, I appreciate it greatly.

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                • #9
                  Originally posted by Pattymd View Post
                  It's an IRS tax restriction, not MO wage and hour law.

                  I don't have the cite right at hand, but I'll see if I can find it this afternoon, if someone else doesn't post it by then.
                  I do not have the current cite (the rules changes a few year ago), but it is called "insurance risk" or the "uniform coverage rule". It used to be part of the old Treasury Regulations Section 1.125-2. If you googe search those terms, along with "Section 125", you will get plenty of hits. Basically the employer is breaking a major Section 125 rule. They are risking the tax status of their ENTIRE section 125, and IRS put some real teeth into these types of violations with the recent changes a few years ago.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

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                  • #10
                    FSA and terminations during the year works both ways. One benefits the employee, the other benefits the employer.

                    If the employee does not use the full FSA amount deducted, then they lose it.

                    If the employee uses the full amount and leaves the company prior to having the full deductions taken, then so be it.

                    Works both ways, they should not deduct from your final pay.

                    You can take a look at the IRS http://www.irs.gov/publications/p969/ar02.html

                    Another source http://www.flexiblespendingaccountso...ex-account.php

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                    • #11
                      Originally posted by strykers View Post
                      The HR person is calling and leaving messages...I have not received my last paycheck, supposed to be direct deposited into my checking account tomorrow. .
                      First, I would suggest calling the HR person back.

                      Also, it isnt unusual for a company to cancel direct deposit for final paychecks. So you may want to ask HR about that as well.

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