Offering FSA COBRA to an employee who has already made their last FSA contribution of the year

[Guest andrew1234]

So I have an employee that will be terminated after the final payroll of this year and they will have of made their final contribution to their Medical FSA plan.

The employee still has a positive balance in their account.

Does COBRA have to be offered to this employee or can we (the company) just allow the employee to be reimbursed for items that might have incurred after their term date?

[leevena]

First, you should check your plan documents and see what they say about this matter. Usually what I have seen is that employees can continue their FSA through COBRA. The ex-employee could continue their contributions, with the extra 2%, while on COBRA. An exception to this can be made if their YTD claims were more than the YTD contributions. But again, please check your plan documents.

[MARYMM]

So I have an employee that will be terminated after the final payroll of this year and they will have of made their final contribution to their Medical FSA plan.

The employee still has a positive balance in their account.

Does COBRA have to be offered to this employee or can we (the company) just allow the employee to be reimbursed for items that might have incurred after their term date?

I think that because the account balance is positive, you do have to offer COBRA -but no payments would be due from the employee. IIRC, the employee can only be reimbursed for expenses incurred before termination unless they elect COBRA.

If the employee does elect, they can can be reimbursed for expenses post-termination thru plan year end.

But I agree with leveena - check your plan document to determine when the employee is no longer a participant