Another COBRA Question

[mariemonroe]

I have read through the rules regarding the application of COBRA to FSAs and just want to make sure I understand how they apply in my situation.

I have a FSA that is exempted from HIPAA.

I have an employee who elected to reduce his salary by $300/ month for 2008.

This employee was terminated on May 31 after having his salary reduced by $1500.

Let's assume that the employee had not yet had any claims reimbursed.

Am I correct that the employee can elect COBRA coverage, pay the premium for June 2008 of $300 + 2% administrative charge, and then submit a claim for $3600 ($300 times 12 months)?

In other words, the employee would have paid approximately $1800 for $3600 worth of coverage?

Thanks

[papogi]

With valid medical expenses incurred during the time that the FSA was in place (prior to the coverage term date, extended by applicable COBRA payments), yes.

[mariemonroe]

With valid medical expenses incurred during the time that the FSA was in place (prior to the coverage term date, extended by applicable COBRA payments), yes.

Thanks!