Sponsor goes bankrupt

[Guest Dick Boever]

The employer/sponsor of an FSA plan goes bankrupt in July. Doors close, all employees find other jobs. What happens to the FSA plan? The employer found enough money to set aside to cover any unpaid claims. The question is, don't we have a plan termination? What expenses are eligible for reimbursement? The whole year, are just those incurred prior to the company closing. What about an individual that terminated prior to the closing that elected continuation?

Any thoughts would be appreciated.