I missed the deadline for submitting a flex med claim to my employer. Can I still be reimbursed?

Question

When I left my employer in early June, I still had some flex med receipts that I had not filed with my employer's plan. I planned to submit the receipts, but waited almost until the end of what I thought was a 90-day grace period (after June 30). When I filed the receipts near the end of September, I was told that my deadline to file was actually 90 days after my end date with my employer ... so I would have had to file the receipts at the beginning of September.

So now, they're telling me that because I didn't "use it," (the funds), I "lose it." And my former employer told me that the language about "90 days after leaving employment" was in my flex med paperwork, so I should have known -- and thus have no appeal (ignorance is no excuse for the law).

Is there a way to appeal and regain these lost flex med funds or possibly to at least write off the loss on my taxes? Does the IRS have person who deals with these issues? I welcome any advice.

Answer 1

Each administrator (not employer) of FSA plans have their own rules that are guided by the IRS regulations. In some circumstances there can be a "grace period," which it looks like there was. But, if you missed it, then there is nothing more you can do.

FSA = Lose it or use it!!

Sorry!

Answer 2

Sorry, but you lose. Flex spending accounts are a "use it or lose it" affair. Since you did not use it by the deadline, the amounts in the account are forfeit to the plan. There is no appeal. The rules are based upon Federal law so even if the employer wanted to they could not reimburse you from the account.

Answer 3

The medical expenses that would have been reimbursed with the flex med plan can be deducted as unreimbursed medical expenses, on Schedule A, if they are not otherwise reimbursed.

You cannot deduct the loss of flex med funds because they are pre-tax dollars, meaning that you already obtained a tax benefit by having them excluding from your taxable pay when they were contributed to the flex med plan.