FSA and employee termination.

[Silver70]

If an employee terminates employment in October 2013, are they still able to use the 1/1-3/15/14 grace period for the 2013 plan year, or does their "grace period" begin the day they terminate?

Thank you,

-John

[QDROphile]

Your plan document should address when coverage ends. Also be careful to distinguish when coverage ends (qualifying expenses afterward are not covered) and runout deadline (claims for qualifying expenses incurred before coverage ends can be submitted). A person who terminated in October 2013 probably lost coverage before 2014 and expenses incurred in 2014 are not eligible.

[Chaz]

(I presume that by "FSA" you are referring to a health FSA.) If the employee had contributed more to the FSA that the employee had been reimbursed as of the date of termination, the employee may be eligible to elect to continue coverage through the end of the year through COBRA. Off the top of my head, I believe that COBRA participants on December 31 have to be given the same access to the grace period as similarly situated employees.