When you leave your job—whether you quit, retire, or are terminated—what happens to your Flexible Spending Account (FSA) depends on a few key factors, including the type of FSA and your account balance at the time of separation.
🔹 Healthcare FSA
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You can only be reimbursed for expenses incurred before your termination date, unless you elect to continue coverage through COBRA.
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If you had already spent more than you contributed at the time of separation (thanks to the Uniform Coverage Rule), you typically do not have to pay that money back.
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If you have money left in your account, you may have the option to continue your FSA through COBRA by paying your remaining contributions after-tax on a monthly basis. This allows you to continue using the FSA for the rest of the plan year.
🔹 Dependent Care FSA
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You can continue to submit claims after you leave your job, but only for care that took place before your employment ended (unless your employer allows post-termination contributions, which is rare).
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You cannot elect COBRA for a dependent care FSA.
Pro tip: If you know you’re leaving your job soon and have money left in your healthcare FSA, try to schedule eligible expenses before your last day.