hot deal: use up all your FSA before getting laid off

[damage]

since this is not HA related, i didn't post it in the hot deals topic. in any case, there have been rumblings at work for a few months that they're going to shut down my group. seeing as it's nearly end of quarter & end of fiscal year for my company, those rumblings are growing. as a frequent reader of the slickdeals.net forum, i'm hoping to get a slickdeal out of my expected layoff.

one thing i found out is that if you have a health flexible spending account (FSA), make sure you use up the entire amount you've allotted for the whole year BEFORE the layoff. if you've already spent the entire amount, the company will not make you repay the difference between that and what you've already withheld.

for example, my wife was scheduled for lasik in april but we moved it up to today. since we had planned this, i allocated $5k for my FSA. if i'm let go by the end of the month, i will have only withheld $1250 for my FSA so far, but have gotten $5k reimbursed.

my HR manager confirmed this is the case and a co-worker said this was so at his wife's company. the patient counselor at the lasik center said this happens all the time. a quick google confirms this. i didn't know about this before, so i thought i'd share this in case it wasn't common knowledge.

 

[Dumetre]

We dont have an FSA but that is good to know.

 

[electron]

I hope those rumors just stay rumors, but that's very good advice. Thanks for sharing and good luck!

 

[damage]

I hope those rumors just stay rumors, but that's very good advice. Thanks for sharing and good luck!

thanks. at this point, i'm actually looking forward to being laid off as crazy as that sounds. nearly everyone in my group is just waiting for the severance package. most of us joined 6+ years ago, but since the company got bought 4 years ago, we've been reorged & reshuffled & repositioned so many times. we last got dumped under a business unit that's left us in limbo without a new project for nearly 9 months. while this is a great situation for HA projects, it sucks professionally. i am grateful to be employed in this economy, but i'm looking forward to a break to step back figure out what's next (mid-life crisis imminent )

if it happens, i'm hoping they do it before the end of the month as the 65% government subsidy on COBRA covers those laid off by 3/31. that's yet another hot deal

 

[tmbrown97]

My company originally had the same setup.... during the first year of FSA, they hinted to the same effect; that if you allocated $5K for the year, spent $3K on lasik and a little on meds, daycare, etc; if you spent it before it was allocated (and quit, were laid off, etc), you won.

In our last plan year, it seems they fixed this loophole - but definitely check your plan because your mileage may vary. For me, I'm doing next year's FSA right now, and I'm basically planning for daycare and basic med use; but if we don't use up the daycare dollars, I'm doing Lasik last minute to use it up.

Just read your terms closely.

 

[AutomateIt]

My company originally had the same setup.... during the first year of FSA, they hinted to the same effect; that if you allocated $5K for the year, spent $3K on lasik and a little on meds, daycare, etc; if you spent it before it was allocated (and quit, were laid off, etc), you won.

In our last plan year, it seems they fixed this loophole - but definitely check your plan because your mileage may vary. For me, I'm doing next year's FSA right now, and I'm basically planning for daycare and basic med use; but if we don't use up the daycare dollars, I'm doing Lasik last minute to use it up.

Just read your terms closely.

There isn't a loop hole. This is the reason for the tax break, both the employee and the employeer have risks. These FSA funds are always funded on 1/1/xx so use it early if your planning on leaving or being laid off. If you do not use it you loose it.