Severance and Health Care FSAs

[Guest Amanda Davis]

Assuming severanced employees are allowed to participate in our Health Care FSA program, are the following allowed:

1. Pro-rated annual maximums --different from the annual maximums for active employees?

OR

2. Different annual maximums for severanced employees? (i.e. actives can elect $5000, but severanced employees can only elect $1000)

Thanks in advance!

[Sandra Pearce]

Your plan's definition of eligibility probably does not include former employees, with the exception of employees continuing under COBRA.