Is a FSA eligible for continuation under COBRA?

US DOL Info#00ff00 Q: Is a FSA eligible for continuation under COBRA? US DOL Info#00ff00 A: A 125 Cafeteria plan allows employee’s put a portion of their earnings, pre-taxed, into a Flexible Spending Account (FSA ), which they can use to pay for medical bills or expenses. Some types of FSA’s are : dependant care or for day care expenses , or for health care expenses . Employer’s who give their employee’s an option to choose a 125 Cafeteria plan must offer a continuation of these plans upon a qualifying COBRA event. Employees, who choose to continue their health FSA under COBRA, will have to contribute 102% of their current accounts monthly contributions. Those contributions will be post-tax and then you will be able to get 100% of claims reimbursed. Any tax advantages will be lost and if there is any unused balance in a health FSA account at the term of the COBRA coverage, it will be forfeited.

Related Knowledge Base Posts

insurance agent answsering the phone

Affordable Health Insurance Starting Tomorrow

Call Us At
Short-Term Health Insurance is popular and available in most states to cover gaps between major medical plans.

These plans also cover COVID-19 hospitalization.
After deductibles and coinsurance, many plans will have $1 million in coverage.

Quote Health Insurance Now