Thanks for the responses guys, Yanche that is very interesting. A similar story from my last employer, a friend of mine contributed the max amount into his FSA during open enroll in Nov, and then in Jan had lasic eye surgery performed for 7k I believe without fully funding his account (the max flex spending account limit wasn't 7k, it might have been 5k). That friend then voluntarily left the company in may and received no bill for the 7 months of FSA he spent and did not fund. The employer is very large as well, over 200k employees. I am surprised this type of loophole exist, it must fall on a loss for the company or the administrator.
I have done some more google searching and came up with a HSA (health savings account) as part of a HDHP (high deductible health plan) as something he might need to do in order to pay with pre-tax dollars. I was hoping someone on this board who is self employed and has this coverage arrangement could chime in on plan administrators they are either happy or unhappy with. My fathers tax pro is turbo tax, but maybe I can convince him to talk to one here in the near future, he is convinced that the idea of contributing $ for future health care cost is only something that people enjoy who work at companies with qualified plans.
You know its interesting, my father is part of a very small manufacturing business that is growing and he is always talking to me about coming back to where I grew up to work there and maybe take it over some day (I live 6 hrs away now), but the pro's/con's compared to the lifestyle I enjoy with my medium sized employer now really are startling I guess. My father works 6 days a week, sometimes sundays, and I think the only paid holidays he takes are thanksgiving and x-mas, he is basically on his own for health insurance, there isn't anyone to cover for him when he does take some vacation, so often times his vacation is just whitetail hunting in the fall but putting in a few hrs midday at the shop to get the essentials done. He also has numerous house projects that are lacking his time to put in to see to completion, and worst of all he is fighting local/state government's greedy tax hand that seems to think business is booming and they deserve more. So far the only 2 pro's I see to his arrangement vs mine are you don't have a boss to answer to and unlimited earning potential based on the success of the business. To contrast in my current engineering position, I sometimes take vacations to far away places and tell people I won't be available on e-mail or phone, I enjoy health care and 401k, I spend many weekends working on my house (including my vf3k stoker install), I have a constant fixed paycheck so it is easy for me to budget, I receive a bonus if I meet personal goals and my company isn't very large so there is upward mobility, I am one promotion and 2.5 yrs of continuous service away from another 2 weeks paid vacation w/ the option to buy a week, so I could potentially have 5 weeks + 12 paid holidays and sick days under the age of 35. Suffice to say, I feel as though even if I could earn double my current annual salary w/ the business because it grows (this is far from true today), I don't think I would be tempted to make the move because I still would have to answer to Uncle Sam's greedy hand and wouldn't get nearly as much free time as I do now.
This is not right, new small businesses is what helped make this country an economic might, government has to be kinder to all the people who appear on dirty Jobs that can't afford lobbyist.