BEYOND COBRA

[Guest cease]

Could you help me out with the following?

A company offers a cafeteria plan that allows for the payment of premiums to the company's group health plan, a medical FSA and a dependent care FSA. The group medical has an age out policy for dependent children up to age 25 if still in college. An employee has a child that is age 23, not in school and is still a dependent of the employee. The plan allows for COBRA for dependents that age-out of the group medical plan. I understand that the coverage to the dependent can be extended for 36 months and the employee can pay the cost of this premium on a pre-tax basis through the cafeteria plan - all on the condition that the child is a dependent of the employee.

After 36 months of coverage, the plan would offer to convert the child to an individual policy of the medical plan provider. At this point, could the employee continue to pay for this coverage with pre-tax dollars? Again, assuming that the child is still a dependent?

I appreciate any comments on this. Thanks.

[Guest yobwoc]

cease --

I would say no.

Cost cannot be paid via cafeteria plan since the coverage in question is not an employer-provided benefit, nor can it be reimbursed under the FSA since FSA cannot reimburse for insurance premiums.

[Guest cease]

yobwoc,

Thanks for the response. This is the answer I would be looking for. However, could you look at IRC Section 9801(f)©(i) and let me know what you think this means?

Thanks

cease

[Guest jashendo]

cease --

First, that reply is from me; somehow, I signed in under the wrong user name.

Anyway, 9801(f)(1)© -- either (i) or (ii) -- is merely one of the conditions that an employee or dependent must meet in order to be entitled to HIPAA special enrollment rights in an employer's plan due to a loss of prior coverage. That is, assuming the other conditions are met, an employee working for Employer A (or the employee's dependent) who is eligible but not enrolled under A's health plan has the right to enroll if (when) he loses the COBRA coverage that he continued under prior employer B's plan.

This doesn't seem to be applicable to the situation you described, unless there's more to it.

[Guest cease]

jashendo,

Thanks for the clarification. After reading and rereading the code, I was starting to think that this doesn't apply to my situation. Your response was icing on the cake.

No, there is nothing more to my situation. Allthough, I don't know any more about the circumstances of the dependent. Would it change things if the dependent was handicapped or had a mental illness whereby the child would remain a dependent of the employee for many more years?

cease

[Guest jashendo]

It could, if for example the dependent would be eligible to be covered as a "dependent" under a "family coverage" election. However, if that were the case, I suspect that the dependent's coverage would not have been treated as being under the student extension.