I participate in my employer's flexible spending program. I specified
that $3,500 be deducted from my paycheck in 2005 to pay for projected
medical expenses. It will take the entire year for $3,500 to
accumulate from my payroll deductions, but the $3,500 is available for
my immediate use as of January 1. What happens if I leave my job
mid-year, having spent the entire $3,500 already? Am I obliged to pay
back my employer for the amount I spent but had not accumulated yet?

While the answer will be specific to your plan, in general, you would
be expected to have the excess amount deducted from your final check. 
That way you are still getting the advantage of funding the FSA on a
pretax basis.  You definitely want to fund it that way rather than
simply paying the plan back with after-tax money.  That would defeat
the whole purpose of having the FSA.

An example:

"If you have been reimbursed for medical claims above the amount that
you have contributed to date, you will be asked to have that amount
deducted from your final check."

"University of La Verne Flexible Spending Accounts Plan" University of
La Verne (December 2003) http://www.ulv.edu/hr/memos/fsacov.pdf

Sincerely,

Wonko

Search Terms: "flexible spending account" repayment

I think it depends on the plan.  In a plan I used to be in it was not
the way the answer described.  It worked this way.  If you didn't use
all the money in the plan by the end of the plan year you lost it.  By
the same token if you seperated from your employer as I did before the
plan year was up and spent the entire plan the employer just lost the
amount not collected from the employee.  I would check with your plan
administrator

Thank you for both the answer and comment. Unfortunately, I don't
think I have a clear answer. I think I was trying to find out the most
likely answer without contacting my plan administrator. I don't want
to alert them that I am considering parting ways with the company
since this is something that would happen many months from now. My
hope was that it would not be deducted from my final paycheck.