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City employees fight to get their Flexible Spending Account money

6:02 PM, Jun 11, 2012   |    comments
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JACKSONVILLE, Fla. -- It's been more than two weeks and city employees still do not have access to their Flexible Spending Account money. Bounced checks are creating a headache for employees who want to use their own money.

The company that administers the flexible spending accounts, EBS Atlanta, explains on its website, that it's having a system failure.

COJ employee "Fran" agreed to share her story, if we protect her identity. "Otherwise I'm completely helpless," she said. She loves the idea of setting her own money aside for a rainy day. "It's money that I counted on having," she said.

That's why she jumped at the chance to take advantage of a benefit the City of Jacksonville offers its employees, the Flexible Spending Account.

Employees opt to have pre-tax money deducted from their checks, then they use it for future medical related expenses. A third party, called EBS Atlanta offers the plan for city employees.

"It's not even city money that is owed to me, it is my money that is withheld from my paycheck," Fran said.

She also agreed to allow us to show part of a benefit check the City of Jacksonville sent her. A check she recently deposited into her bank account. "The city check bounced," she said.

Now, Fran and the other 1,500 plus employees in this FSA program are trying to figure out how to get their own money back. She said the city's latest update seems to put the responsibility on employees, not the city or EBS Atlanta.

"You must jump through this hoop, and you must jump through this hoop, and you must do that to get the money back through EBS," she explained.

"Never seen a failure of this magnitude with a flexible spending account before," Tax Attorney Matthew Bishop said.

We tried to find out which agency regulates flexible spending accounts. We called the IRS and other oversight agencies, but Bishop said that's the problem with these types of accounts. He said there's a lack of oversight. 

He said, "It's not a security, so therefore, it's not the Securities and Exchange Commission. Really what it comes down to is the government itself, the city of Jacksonville itself, should be responsible for these plans. They're in a position being a fiduciary, so they're ultimately responsible for what they do with money they take from their employees."

Fran said she's losing confidence in the city deducting money from her checks. 

"I don't trust the city farther than I could throw it," she said.

We contacted EBS Atlanta and the City of Jacksonville many times.  As of this posting, they still have not responded to our requests.  EBS' website still warns of the system failure. They still don't answer their phones.

First Coast News

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