FSA Plan provisions for employees who are terminating?

[Guest CLKeown]

I have an employee who was terminated due to a staff reduction. He was given two weeks notice of his termination. This employee went out during lunch on his last day of employement and made a $685.00 purchase at an optical/vision care facility.

The receipt he submitted however is not a detailed receipt, it is just the credit card charge slip.

I plan to request a detailed receipt listing the services rendered and items purchased to ensure that they are eligible for reimbursement.

What I am wondering; however, is there any provision to protect the employer in cases like these?

The employee in question came into my office the day before he made the purchase and asked several detailed questions about the FSA Plan and the regulations regarding this plan. His questions were specific relating to how much reimbursement he was entitled to, and "Aren't you (the employer) required to pay anything I turn in before I terminate?" and "If I go out and spend $ 600.00 tonight you would have to reimburse me, right?". Unfortunately, since his questions were direct and specific, I could not avoid answering them. I did explain that the expenses had to be 1) incurred between January 1 and his termination date; 2) eligible expenses and 3) turned in within 90 days of her termination date.

Has anyone ever seen any further stipulations regarding employees who know that they are terminating to keep situations like this from occurring?

Thanks,

Carole

[SLuskin]

These employees are entitled to submit these claims, and it is better seen as a balance to the employee risk of "use it or lose it". When I explain this employer risk to potential clients, I use the example of the house in a roulette game. Sure, the house will lose on one or 2 bettors, but generally comes out ahead if you look at the big picture.