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The Flexible Spending Account Administration Solution

Terminating and deleting employees

Q.  I want to remove an employee that has permanently left the company from future Fast-Flex Plus reports, but the option to do so is "ghosted" (not available).  How do I remove him?

A.  There are two types of "termination" in Fast-Flex Plus:

1.  Permanent - the participant and all his transaction data is eliminated from FUTURE fiscal year's data and reports

2.  Suspended - The participant and his data remain in the current fiscal year databases, but as long as he is marked as "Terminated" on the Employee Data screen (page 1 of 4), he will not post additional paycheck withholdings.  The employee will still show up in all year-to-date reports, and his employee record and year-to-date transaction records can still be edited.

With the "Suspended" termination, the partcipant's employee record WILL BE carried over to start the new fiscal year UNLESS you go through the "Permanent" termination process.  The "Permanent termination process is described on page 52 in the manual.

The "Permanent" termination process can only be invoked during the interval period beginning one month prior to fiscal year-end and through the post-fiscal-year "grace" period.  Generally you will want to wait to permanently remove a participant from the databases until after you have printed all fiscal year-end reports.  (You may need to include the terminated employee's transactions for year-end reporting and balancing, etc.)

Once you have "permanently" terminated those employees who are unlikely to return, you can start the new fiscal year process described on page 38 and they will not be carried forward into it.

Note that if you ever do need to restore a "permanently" terminated employee to the prior year's database, you can do so from Main Menu/Utility Programs/Restore Voided Employee.  (So it really isn't that permanent after all!)   You will not be able to "restore" him to the new fiscal year's datbase if he was never carried forward into it.

We  realize that the new IRS rules allow people to spend prior year FSA funds until March 15 of the next year, often making it necessary to keep the prior fiscal year "open" longer.  This also makes it so that you may not want to permanently remove terminated employees before you need to set up the new fiscal year.  You may even need to reimburse a terminated employee that still has left funds in his account after the end of the fiscal year.  You may want to start the new fiscal year before the end of the current one.  So the bottom line is that it will be quite common to have to drag along a terminated employee, who is unlikely to return, for at least another fiscal year in Fast-Flex Plus.

So back to the original question of how (when) you can permanently remove a terminated employee from the current year's database.  The answer is that you can't until one month before the end of the fiscal year.    To avoid carrying forward a terminated employee into the next fiscal year, the  proper procedure is to permanently remove him in the current year's database, during the grace period or slightly before, but before going through the "Start a New Fiscal Year" procedure.