Death of employee in HFSA

[Guest crs]

If an employee dies with a balance in his HFSA account, can beneficiaries be reimbursed for expenses incurred after the employees death or are they limited to reimbursements for expenses incurred pre-death. Thanks in advance.

[Guest lmccormick]

If an employee dies with a balance in his HFSA account, can beneficiaries be reimbursed for expenses incurred after the employees death or are they limited to reimbursements for expenses incurred pre-death. Thanks in advance.

How could someone incur expenses after their death?

[leevena]

I have never run across this, but it seems to me that the answer would be yes, depending on the expenses and the dates involved.

For example, if a participant died during the month, and the benefit plans covered that participant through the end of the month, then those expenses would be eligible. As for expenses incurred after the employee was no longer a participant, I don't know.

[Guest crs]

The deceased employee's spouse and dependents would incur the expenses after the employee's death but before the end of the plan year.

I am under the impression that only expenses incurred prior to the employee's death can be reimbursed, but I don't know if this is optional or required (i.e., the spouse and dependents are not allowed to be reimbursed with pre-tax dollars for expenses incurred after the employee's death).

[Mary C]

The dependents may get reimbursed for expenses they incurred only while the deceased was a participant in the plan. However, if there is an account balance and the plan is subject to COBRA, they should be offered COBRA. If they elect COBRA, and pay the required "premiums", then expenses incurred after the employee's death upto the entire pledged amount may be reimbursed.

[Guest crs]

Thanks for your reply. Your analysis is exactly what I thought, but I have to back it up. Do you have any authority by any chance that says expenses must be incurred before the employee's death (I know I am pushing my luck!)?

[Guest dhall111]

Thanks for your reply. Your analysis is exactly what I thought, but I have to back it up. Do you have any authority by any chance that says expenses must be incurred before the employee's death (I know I am pushing my luck!)?

I know this is about a month old but I thought I'd throw in my 2 cents anyhow.

Your plan would specify this. Most plans are designed so that expenses must be incurred prior to the participant's termination. Just because it is a death doesn't matter, it should be treated the same as any other temination of employment. The date of death is the last day the employee would be eligible to be enrolled in any of your plans (with the exception of a plan that dictates the date of term of the plan is the last day of the month like many health plans).

I would offer the family COBRA and then they can continue to pay the premiums and utilize the benefits.