HSAs and COBRA

[Guest Thomas2006]

Employer self-insures an HSA offered in connection with a HDHP. Employees pay high premiums to participate in the plan, but employer makes a sizable contribution the HSA portion. If employee terminates and goes on COBRA coverage, are there any issues with providing COBRA coverage at a lesser cost since Employer will no longer be making contributions to the HSA portion after termination?

[leevena]

COBRA applies to the health insurance plan, not to the HSA fund. The calculation for the cost of the COBRA coverage is still the "health insurance premium+allowable administrative cost." If the employer wants to fund some of that cost for the ex-participant, that is up to them. There will need to be administrative issues that need to be addressed, but the employer can do it.