Employer Using My Over Withdrawal of Cafeteria Plan as Reimbursement for Uninsured Medical Visits After My Termination

[Guest reneewalls]

I was terminated from my position as "no fault". At the time I was terminated I had spent more than I had contributed to my cafeteria plan for reimbursement of medical expenses. When I was terminated the office administrator misinformed me that I had insurance benefits until the the end of the month (I was terminated on the 15th.). I went to two doctors appointments and then was informed that I did not have insurance after all in a letter from my former employer. I asked my former employer to reimburse me for the doctor bills. I would not have gone to either appointment if I knew I had no medical insurance. They only reimbursed me for a small amount claiming that the amount I overwithdrew from my cafeteria plan compensated for the balance. Can they do this? I thought the "use it or lose it" went both ways. I know if my usage had been under the amount I had contributed into the cafeteria plan I would not have received a "refund". Thanks for any help.

[Guest Cgross]

By cafeteria plan are you referring to your healthcare flexible spending account?

Did you receive a plan document or other materials outlining the provisions of

the plan? I'd refer to that document. But you're right, in a FSA, the funds are

available to you at the beginning of the election period, and if you exhaust the

account prior to termination of employment, the employer can not make you

reimburse them for outstanding amounts.

[Guest wcoleman]

It is true that your employer cannot make you "pay back" the excess reimbursements. However, generally you will cease to be a participant in a cafeteria plan as of your date of termination. There are certain instances where a participant is eligible for COBRA in a health FSA, but you did not indicate that they offered you COBRA coverage.

Since the expenses were incurred after your termination date, I believe the employer is correct.