Guest bosco Posted June 25, 2014 Share Posted June 25, 2014 I've read 1.125-3 and it does not speak to the fact if a participant chooses to catch up missed contributions, gets reimbursed their full election, and just tells their employer "not coming back". Does the reimbursements become taxable to the now ex-employee, or does the employer ask for the reimbursement to be returned? Link to comment Share on other sites More sharing options...
Guest sniffles Posted August 11, 2014 Share Posted August 11, 2014 if this is a flexible benefit plan for healthcare costs and the ex-employee's claims were for qualified health care expenses then you do nothing. That is part of the "use-it or lose-it".....the employee could elect to have $100.00 per payperiod deducted and on January 3rd use and be reimbursed for the full election. Nothing you can do. Link to comment Share on other sites More sharing options...
masteff Posted August 11, 2014 Share Posted August 11, 2014 Some of the 125 rules are in the proposed regs which are harder to find because they are not listed in normal places like the eCFR. I believe but am not certain that this is the latest: http://www.irs.gov/irb/2007-39_IRB/ar14.html From the preamble at that link: "The new proposed regulations retain the rule that the maximum amount of reimbursement from a health FSA must be available at all times during the period of coverage (properly reduced as of any particular time for prior reimbursements). The uniform coverage rule does not apply to FSAs for dependent care assistance or adoption assistance." Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra Link to comment Share on other sites More sharing options...
Bill Presson Posted August 11, 2014 Share Posted August 11, 2014 You can always ask them to pay the employer back, but you cannot require it. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
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