I agree it's tacky and it's unprofessional for a server to ask if you want or need your change! I've had that happen in the past, but not recently.
While I think MSCs should reimburse for tips that aren't covered by the reimbursement, I will tip "out of pocket." It's not a server's fault that the client and/or the MSC is being cheap. He or she shouldn't be penalized. If anyone thinks that not tipping because it's unreimbursed will effect any change, I'm afraid that's a pipe dream.
If the service is good, I leave a generous tip. If not, I may or may not leave any tip. Here in my state, the minimum "cash wage" for servers is still a paltry $2.83, with $7.25 the combined cash + tip "assumed" wage. Wow, what a deal. Not.
When I was a server, I made good $$ in tips, but I can remember being aghast at the fact that I was taxed on an assumption that my hourly wage + tips was equal to minimum state wage, even if it wasn't. Back then, unlike now, there was no requirement for employers to make up the difference if a server doesn't make the whopping $7.25/hour. But some don't, and I think there have been several lawsuits over this.
I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.