Health FSA/COBRA/Employer Contributins

[Guest afreeling]

FSA has Employer contributions. If an employee is terminated and elects FSA COBRA, does the employer have to fund remainder of their 'Annual election/contribution'? For example, employee elects a $1000 salary reduction for the year. The employer offers an additional $800 (so the total Annual Election is now $1800 for the year). If the participant terminates mid year and has contributed $500 of their own salary and the employer has put in $400 thus far, is the employee now required as part of their COBRA premium to compensate for the amount that the employer did not put in as of yet and include this in their COBRA payment? Any assistance would be appreciated.

[leevena]

Are you sure you have the story right? FSA contributions are employee, not employer.

Wow, I stand corrected. I did not realize that ER's could contribute.

[Guest fritzreb]

FSA contributions can be made by an employer and/or an employee.

The monthly COBRA premium for continued FSA participation would be 1/12 of the total annual employer and employee election of $1,800, not just the annual employee election of $1,000. The COBRA participant is eligible to receive reimbursement of the full $1,800 for incurred eligible expenses, not just the annual employee election of $1,000 (assuming no prior reimbursements were made from the plan).

[LRDG]

I don't think the ER must continue funding a post-employment/COBRA FSA. Similar to the Health Plan COBRA election, any employment related ER premium subsidy(sp) becomes 100% employee paid.

[Guest fritzreb]

That's correct. FSA contributions for the entire premium would be made by the COBRA participant. The FSA COBRA premium is calculated in the same manner as COBRA health insurance premiums are calculated; the COBRA participant is responsible for the entire premiuum (not just the employee premium they paid prior to continued coverage under COBRA).

[Guest afreeling]

Thank you everyone for your assistance. Have a great rest of the week!