County Gov't Medical Plan Eligible for FSA Dollars?

[Guest Ms. Kate]

A recently hired employee has medical from his former employer, a county gov't. I think this would qualify as an "employer-sponsored plan" and therefore be ineligible for pre-tax fsa treatment. Is someone able to confirm that that is the case?

[LRDG]

If the recently hired EE is covered by a County Gov't Medical Plan through COBRA, the premium payments are not eligible for pre-tax payment through your organization's Medical FSA. The COBRA payment is also not eligible for pre-tax deduction from payroll paid to the EE by your organization.

If the EE is receiving income from the County Gov't, (County Gov't severence pay package, for instance), it is possible for EE's COBRA premium to be deducted pre-tax from post employment income received from the County Gov't if allowed by the County Gov't plan.

According to IRS regs., Medical FSAs are prohibited from being used to reimburse premium payments of any type.