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The Dow Chemical Company Message Board

  • the_nervous_resistor the_nervous_resistor Feb 25, 2004 2:33 PM Flag

    Misc. pretax health reimbursement accts

    This message is for those who might be separated soon, and it is about pretax medical reimbursement accounts. (125H) This could be worth $100-$500 to you.

    If you have money built up in a pretax, "flexible spending account," then the availability of those funds after you are told that you are separating is dependent upon how the company interprets the benefits plan. There may be language about a "grace period" in your benefits brochures. There also may be connections with your COBRA coverage.

    For example, suppose you have $500 in the account. You plan to use it to pay for health care not covered by your insurance. The next thing you know, you get fired. You are no longer an employee. They can keep the money. It's that simple.

    What to do now? Read your benefits information about pretax medical expense reimbursement accounts. (IRS Section 125 is some code language.) If there is grace period wording, then you have found the right place. Hopefully, you have 30-90 days to submit your expenses that were encurred up to the day you were fired. It could be zero days.

    My recollection of the "old Dow" was that this kind of treatment did not happen. Hopefully, that is how it is now.

    Also note, if you are hired back as a contractor, you won't have access to the money, unless the language in the benefits plan about continued COBRA coverage addresses this.

    Hope that this is not a problem for anyone. (Personal friend just got zinged by this in an unrelated layoff.)

    tnr

    p.s., To corporate wonks, please don't consider this as a new source of cash flow, especially this early in the year. Better to wait until Christmans, when there is more money in the accounts. Then, the blow during the holidays is twice as effective. Hey squinch, how would the accounting office handle the funds? It's not really insurance.

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    • Don't know how it works at tne New Dow, but at the Old UCC, it worked as follows (some might be federal law, some might be UCC policy):

      A) You had until the end of the calendar year to use the medical $$$ in the flexible spending account, even if off the payroll.
      B) Normally, you are allowed to use during the year up to the total that you would contribute for that year, even before it is contributed. For example, if you put in $100 a month, you could spend $1200 in January under the assumption you will contribute that amount by December 31.
      C) Once off the payroll, you could still use the amount you would have contributed if you stayed all year. For the above example, if you left at the end of March, you could still spend(and get reimbured for)$1200 even though you only contributed $300.

 
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