What happens to my section 125 flex plan when I’ve been layed off?
Friday, 19. March 2010
I have been contributing a substantial amount to my savings plan since the first of the year. In May I received notice that I was part of a “short term layoff”. I have been using enough vacation in each pay period to pay for my benefits (I was told that I would have full benefits through the end of June – if I wasn’t back to work by the first of July I would have to go on Cobra). During the time I have purchased glasses and prescriptions that I submitted and was reimbursed for by my flex account. Now I’m receiving word from my company that they are going to take out “negative balance” of my flex account for the year from my last paycheck in June (I’m cashing out my vacation). I was always told that if an employee dips too far into their account before the payments were received that the company “ate it”. I have been told this is the law. They are still referring to me a a ’short term layoff’. I haven’t been dismissed yet. Can they do that?