Great question.
Once employment ends, the person cannot spend their FSA funds, but they do have 90 days to submit claims for FSA-eligible expenses that were incurred while employed and during the current plan year. Any unused money remaining at the end of the plan year is returned to the employer. If the worker was called to active military service during the FSA plan year, though, they are allowed to cash out the FSA balance.
Here is a reference: https://www.irs.gov/pub/irs-drop/n-13-71.pdf
Hope this helps!
March 2018
Log in or Register to save this content for later.