Improper(?) FSA Deduction From Severance

[bocaman]

Is it proper for my former employer to take a deduction for a Flexible Spending Account (FSA) in my severance paycheck? Severance pay was contingent upon my agreeing to a General Release and, therefore, was not paid until more than a month after my final date of employment. It seems that since I was no longer an employee at that time, the deduction should not have been taken. The fact is that I cannot claim any expenses occurring after my final date of employment for FSA coverage, so any deductions taken after that date cannot possibly provide any benefit. My requests for review of the issue remain unanswered after multiple inquiries. The state is Florida. Thanks.

 

[cbg]

What does the plan document say?

It is neither proper nor improper. It's entirely a function of what the plan document requires.