What happens to my FSA if I'm terminated or quit?

Let's say I use my entire FSA amount through a prepaid credit card in February and quit my job the following month. How does my employer recoup the loss since the full amount has yet to be deducted from my paychecks?
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  • Your employer has to cover the loss since the full balance is available the first day of the plan year for your Medical FSA. Funds that are forfeited at the end of the plan year typically are used to offset the scenario you are asking about.

    If you know you will be leaving and not contributing the full amount to your FSA we think it is most ethical to only spend what you have put into the account even though the full election amount is available.

    Bottom line, nothing has to be paid back to the employer in this scenario. Does that help?
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