Your health FSA will expire the date of your employment termination. You may be reimbursed for eligible expenses incurred prior to this date. No reimbursements may be made for claims incurred after your termination date unless you choose to extend your health FSA eligibility by continuing this coverage under COBRA.
FSA coverage elected through COBRA typically cannot be extended beyond the current plan year. In special circumstances, specifically, when there is an employer contribution to your health FSA, your coverage may continue beyond the current plan year.
FSA Premiums under COBRA
The monthly COBRA rate will be approximately 102% of the monthly equivalent of the salary deferrals you made as an active employee. However, your COBRA Election Form will not list the Health FSA as a plan available to continue. The reason for this is that the COBRA premium requires a special calculation based on your actual salary reductions prior to your employment termination date. If you want to find out the monthly cost to continue your Health FSA through COBRA, please contact firstname.lastname@example.org.
Premiums are paid on an after-tax basis rather than on a pre-tax basis.
Ineligible FSA Accounts
Overspent FSA accounts are not eligible for continuation. This refers to accounts when as of the COBRA Qualifying Event date, the remaining annual FSA limit is less than or equal to the maximum COBRA premium that can be charged for the rest of the plan year.
Dependent care accounts are not eligible for continuation through COBRA.
How do FSA Rollovers Work?
If you have a health FSA rollover from the prior plan year, you may be eligible for COBRA continuation for that “rollover only” health FSA, even if you did not make a health FSA election in the current year. Eligibility to access the rollover funds after your termination date is contingent upon your FSA plan provisions, being an active employee on day one during the current plan year, and affirmatively making an election to continue your roll-over FSA under COBRA (no default elections will be made). Rollover funds are available only through the end of the current plan year and may not be further rolled over to a future plan year.
If you have any questions about your FSA account, including estimating your COBRA FSA monthly premium amount, or eligibility for “rollover only” health FSA, please contact the Vita Concierge directly at email@example.com or (650) 966-1492.