Do I have to pay towards a Flexible Spending Account when out on maternity leave?

Question

My wife is currently on maternity leave without pay. We just recieved a bill from the benefits company that is requesting payment for health/dental, AND our flexible spending account that we use for daycare. I know that we are responsible for the health insurance premiums since we are still covered and they can't take it out of her "non-existent" paycheck, but payment to the FSA makes no sense. The whole point of that account is to send in pre-tax money. Shouldn't we not have to pay and then just not have that money available for reimbursement?

Answer 1

I used to administer the benefits where I worked. This is an example. If you signed up for $1,000 in FSA benefits for the year, but only worked ten months that year, your payroll deduction would be based on the $1,000 divided by the number of paychecks you receive each pay day. So, lets say you get paid 2 times a month, that would be 24 pay days. You'd contribute $41.67 per paycheck to meet your $1,000 deduction for the year. If you were off work for 2 months, that would mean you had only 20 pay days. Your contribution is adjusted so that you still meet the $1,000. I'm not sure why the company is trying to bill you for your FSA benefits. You'll make up what you missed with an adjustment on your payroll deductions when you go back to work. However, if you are covered under medical and dental, you are still responsible for your portion of that expense during your unpaid leave.

Answer 2

My wife has a FSA and when she was out for two months she simply had her annual amount reduced. She was out on FMLA and I assume your wife is the same, given the reason.

The thing with FSAs is that you contract for a certain amount per year and if you do not spend it all, the unspent money goes to the IRS. So there has to be a good reason for not making payments. If your wife is on FMLA, perhaps you could present that eveidence to the plan administrator and see if that works. Otherwise, I suggest taking the advice of the previous answerer. Whatever the legal position is, it does no one any good to ask you for money that would be better spent on your child (for which, congratulations by the way!)

Answer 3

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/10/21/nursery121.xml

http://www.jbaassoc.demon.co.uk/watch/some%20recent%20findings%20jan%2006.pdf

http://www.telegraph.co.uk/news/main.jhtml;jsessionid=UYKHIART3QBLDQFIQMGSFGGAVCBQWIV0?xml=/news/2006/10/21/nursery21.xml

http://www.geocities.com/Wellesley/Garden/2010

http://www.naturalchild.org