Employee participates in the Health Spending Account. Employee curren

[Guest myvettee]

Employee participates in Health Spending Account. Employee currently on unpaid FMLA. Employee

pays (what would be her pretax withholding) with a physical check to keep up with her bi-wkly withholdings while out on FMLA. Are there any consequences in accepting her checks while she is out on leave. These checks are to replace what would be the pre-tax withholding. I would appreciate any comments or suggestions. Yvette

[Lisa Hand]

The Proposed Regulations on the effect of the FMLA on operation of Cafeteria Plans (http://www.benefitslink.com/taxregs/1.125-3.htm)

detail the three choices available for funding Section 125 contirbutions while on FMLA. They are 1) Pre-pay, 2) Pay-as-you-go ("generally made by the employee on an after-tax basis") and 3) Catch-up. The employer may offer one or more of these options.

[KIP KRAUS]

My first inclination is, Why put after-tax dollars into the FSA? I dought the employee will be able to deduct this contribution form income taxes.

Secondly; I don't know of any situation in which a pre-tax plan can accept after-tax dollars. Maybe someone out there knows of an acception, nothing these days would suprise me.

If it is that important to the employee, I suggest allowing him/her to make up pre-tax contributions upon return to work.