Company sold - losing unused contributions

[Guest hobbes]

My company has a medical reimbursement plan. Recently, we were sold to another company and will have their plan available to us, so the old plan is being terminated.

I had made my election earlier in the year based on having high expenses toward the end of the year, so have not yet incurred enough expenses to be reimbursed the full amount that I have had deducted from pay.

So, my question is, if a plan terminates and there is unused money in my account, can it be forfeited, or am I somehow entitled to be reimbursed? I don't see the logic in my having to forfeit dollars because the plan has ended.

Thank you.

[Kirk Maldonado]

What does the plan say?

[Guest hobbes]

As far as I can tell, it says that distributions will be made in accordance with federal law.

[Guest Linde]

I was wondering what happens if an employer goes bankrupt, can employees get refunded the amount that they contributed into the FSA? This goes along with the last post....if a company changes ownership and the new owner doesn't want to provide employees with a FSA, what happens to their contributions?

[Guest bmaverick2]

See Revenue Ruling 2002-32 for a carryover to the new company. Ultimately it is an issue to be resolved by the Buyer and SEller.

[david rigby]

Revenue Rulings here:

http://www.taxlinks.com/rulings/findinglist/revrulmaster.htm