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"reclassification" of FSA contributions

edited September 2013 in Human Resources
Can a school district require a terminating employee to pay the difference between reimbursements received and FSA contributions? Example - Mr. X has resigned and to date has claimed $1,000 for qualified medical expenses. He has only contributed $500 to date. Can the school deduct $500 from his last paycheck to offset what he has claimed?

Didn't sound right to me based on Section 125 regs and uniform coverage etc, but wondered if there was anything special about school employees? Or can it be written in the employee contract?


  • Thanks David - I checked the benefitslink website and lo and behold almost my exact question was there - government employers are subject to the same regulations under the IRS Section 125 cafeteria plan as any other employer.

    Should be interesting if I ever get the chance to leave for another job before the year is up and this subject comes up regarding my final check....
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