Medical Flex Acct regulations

[Guest freqflyer]

As a participant of a medical flex plan, am I obligated to pay back an employer if they terminate me and have already drained the flex account dry for the year.

Here is my situation... I plan to commit to $4,500 in my medical flex acct next year for dental (braces). Potentially my employer may eliminate my position Feb. '03. If I start my dental procedures in early January and pay the medical provider in full for their services and submit and receive the full reimbursment (thus draining the flex acct), would I have to pay back my employer for the approx. $4,000 in remaining uncollected contributions? Could they take it from my severance package?

Any guidance is much appreciated.... Thank you!

[papogi]

If your plan pays you the upfront charges you paid, then you have no responsibility to repay your employer. Be careful here. Ortho is often reimbursed to employees in monthly amounts corresponding to services as they are supposed to be rendered. Depending on the circumstances and exact nature of the charges, even though you pay the amount upfront to your dentist, you may not be reimbursed the full amount from the FSA all at once. Harry Beker of the IRS made comments in the past year concerning some situations where upfront ortho claims can be reimbursed, but not in all circumstances. Because of the gray area of ortho claims, different FSA plans can have slightly different interpretations of the regs here. Your scheme may work, but you may get stung.

[Guest freqflyer]

Thank you Papogi for your informative response. First, I must apologize for appearing to "scam" my employer. I'm only trying to protect myself after I commit to Ortho Services, not benefit from this. Once again, I appreciate your comments and I will keep this in mind!

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