Flexible Medical @ Termination

Texas

An employee's last day of work was yesterday. She has paid in $500 through her most recent payroll deduction. She has been reimbursed $725 through yesterday. Her regular deduction is $85 per pay period. Can we go ahead and deduct $225 on her last check to cover all expenses through yesterday? Thanks for your help, Cathy

NaeNae55

Are you talking about a Section 125 Medical Reimbursement Plan? If so, you cannot deduct any more than you normally would. If she has used more than has been withheld, that is the employer's loss.

She took a risk that she wouldn't use it all, and the employer took a risk that she would use more and leave before it was all paid back.

Sorry, but thems the breaks.


Nae

Texas

Yes, it is a Section 125 Plan. Your answer is appreciated! Thems are the breaks, but generally we profit, not lose from this type of deal. Make it a great one!
Cathy

joycel

It's correct that the employer takes a loss on this unless the employee states ahead of time that they want the additional payments taken out of their paycheck (but I'd then make sure to get that in writing). We recently had the same thing happen. In our case the employee came to me and said that he knew he'd be using his entire flex election before leaving and wanted to finish paying out his election before leaving. I checked with our Flex Benefits office to make sure we could do that -- sure enough -- if the employee agrees to it it can be done. Under no circumstances, though, would I ever even broach the subject. It needs to clearly be the employee's free will.