Reimbursement of HEATH FSA claim under COBRA

[Guest ncfila]

I am a TPA who has never dealt with FSA claims under COBRA. My questions are if an employee elects to have his FSA under COBRA when they are terminated what is the claims cut off date? The date of termination or the end of the plan year? Can they continue to elect FSA in the new year? Also do you have to charge the 2% fee and if yes does this become part of the annual election or is it treated as a separate item.

[Guest JerseyGirl]

The cut-off date for claims would be the same as for the rest of the participants in the plan, unless stated otherwise in the plan documents. I believe the COBRA election could only be for the balance of the plan year during which the termination took place, so further elections would be prohibited. The 2% fee should be included in the after-tax payment being made into the FSA by the terminated employee.