FSA and Unlimited Carryover
A health FSA carryover feature lets employees carry over unused balances, but employers need not allow carryovers indefinitely if participation stops.
Coverage Changes Under COBRA
COBRA participants generally must continue the same coverage as before their qualifying event but may make changes available to active employees.
Q: If an employee elects COBRA coverage, can they change their coverage tier during the COBRA period?
A: Generally, individuals enrolled in COBRA must continue the same coverage they had immediately before the qualifying event. All qualified beneficiaries have independent rights to elect COBRA. An employee’s spouse and dependent children do not have to follow the employee’s decision regarding COBRA. If the employee declines COBRA, the spouse or children can still elect coverage on their own. Similarly, one family member can choose COBRA while another declines it.
COBRA participants are typically allowed to make the same coverage changes that are available to similarly situated active employees, such as changing coverage during Open Enrollment or after a permitted mid-year election event. Employers should ensure that COBRA participants receive the same enrollment opportunities and communications provided to active employees when such changes are available.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
Topics
FSA Reimbursement for Non-Covered Spouse
Health FSA funds may generally be used to reimburse eligible medical expenses for a spouse or qualifying dependents even if they are not enrolled in the employer's health plan.
COBRA Offering to Retirees
When a covered employee becomes entitled to Medicare before retiring, a covered spouse may receive up to 36 months of COBRA continuation from the date of Medicare entitlement.