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Uncashed FSA checks


Guest brobinso

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Guest brobinso

How do you handle uncashed checks in a health or dependent care FSA??

Obviously, these funds were claimed, so it seems the $$ should not just be forfeited.

I have been sending letters to participants stating there is still an outstanding check and asking them to call to have it reissued, but there are still those who do not reply.

Is there a limit to how long I have to hold on to these funds? Do they revert to the employer?

My plan document does not provide any guidance.

What do you do?

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States have varying laws regarding unclaimed funds. This operates very much like a dormant bank account. Once the funds are unclaimed for the required period of time, they are turned over to the state. The state then tries to find the participant.

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Why not amend the plan to provide that all unclaimed funds which are not cashed before the checks become stale under state banking law (usually 6 mos) revert to the plan sponsor for the benefit of the plan. If the participant requests the check at a later date then a new check can be issued. By the way the state does not make much of an effort to find the owner of abandoned property. They merely hold the money indefinitely until it is claimed and do not pay interest.

mjb

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