Employer Topics

Terminations

When a participant’s employment is terminated, in most cases, their participation in the Plan also ends. Due to the participant’s easy access to funds using the debit card, it is very important that you notify AdminUSA immediately when you learn of a termination or pending termination to avoid the occurrence of transactions following the termination date. Use the Employee Status Change Form to notify AdminUSA of this activity.

Upon notification, we will deactivate the individual’s FSA debit card(s). If funds are available in their account, claims incurred by the employee prior to the date of termination may be submitted for a period of 90 days following the termination date. These claims, however, would be submitted using a paper claim form.

Participants whose employment ends are entitled (under strict IRS rules) to use the total amount elected at the beginning of the Plan Year, regardless of their account balance at termination as long as those claims were incurred prior to the date of termination.

IRS rules do not allow the return of any deductions made under a Flexible Spending Account to (or from) the participant by (or to) the Employer.

Under certain circumstances, Medical Spending Account Plans are subject to COBRA. Your COBRA plan administrator will be able to help you with this requirement, if necessary.