Two things happened in 1986. Run-D.M.C released their hit song, \u201cIt\u2019s Tricky,\u201d and COBRA became effective. Thirty-two years later, Run-D.M.C.\u2019s music is still popular, and COBRA administration is still tricky\u2014especially when it comes to Flexible Spending Account (FSAs). Add FSA carryover to the mix, and it gets even trickier.<\/p>\n
COBRA only applies to FSAs which are said to be underspent<\/strong>.* This means that the amount available for reimbursement for the remainder of the plan year exceeds the COBRA premium for that same time period. Figuring out if the FSA is underspent involves a bit of math, so it\u2019s best illustrated with an example.<\/p>\n How to determine the amount available for reimbursement for the remainder of the plan year:<\/strong> How to determine the COBRA premium:<\/strong><\/p>\n How to determine if the FSA is underspent:<\/strong><\/p>\n If COBRA applies to the FSA, then COBRA beneficiaries must be given the same carryover rights as current employees. Using the above example, Jay could elect COBRA for a maximum monthly premium of $212.50. Jay\u2019s If Jay has unused funds at the end of the plan year, then he must be allowed to carry over up to $500 for the maximum time period permitted under COBRA law. In this case, it would be an additional 11 months, since the termination of employment allows for 18 months of continuation coverage.<\/p>\n Jay\u2019s employer is prohibited from charging him a premium for the additional 11 months of access to the carryover amount, as Jay would\u2019ve already paid for this amount. Additionally, Jay\u2019s employer does not<\/u><\/strong> need to give him the ability to make a new election to the FSA for the new plan year.<\/p>\n Employers can place restrictions on the carryover amounts. For example, they can structure their FSA so that carryover is only available to employees who make new elections in the following plan year. If Jay\u2019s employer had this provision in place, then he would not be entitled to any carryover amount after the plan year was over. In other words, he\u2019d only need to be offered COBRA for 7 months.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Two things happened in 1986. Run-D.M.C released their hit song, \u201cIt\u2019s Tricky,\u201d and COBRA became effective. Thirty-two years later, Run-D.M.C.\u2019s music is still popular, and COBRA administration is still tricky\u2014especially when it comes to Flexible Spending Account (FSAs). Add FSA carryover to the mix, and it gets even trickier.<\/p>\n","protected":false},"author":1,"featured_media":303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-389","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n
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\nemployer can only change him a premium for the remainder of the plan year, which is 7 months.<\/p>\n