FSA / HRA / HSA
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.
Question of the Week
Question of the Week - Mid-Year Election Change
Q.- An employee enrolled in our health plan wants to drop coverage. Can we let employees cancel coverage whenever they want?
Q.- An employee enrolled in our health plan wants to drop coverage. Can we let employees cancel coverage whenever they want?
A.- If your health plan is offered on a pre-tax basis through a Code section 125 cafeteria plan, employees cannot just drop coverage whenever they want. The cafeteria plan rules say that once an employee makes an election to enroll in the plan, coverage must remain in effect for the entire plan year unless the employee experiences a qualifying life event as recognized by the IRS. The IRS only permits mid-year changes to coverage elections under specific circumstances, including:
- Marriage, divorce, or legal separation
- Birth, adoption, or placement for adoption of a child
- Death of a spouse or dependent
- Loss or gain of other group health plan coverage, such as a spouse’s employment-related coverage
- Change in employment status (e.g., part-time to full-time, termination of employment)
- A dependent ceasing to be eligible for coverage
- Entitlement to Medicare or Medicaid
- Court order requiring coverage for a dependent child
- Change in residence out of a coverage area that changes eligibility for coverage
Benefit Allocation Systems (BAS) provides online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 integrates with major insurance carriers for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and others), and with leading payroll platforms for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and others).
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
COBRA
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.
COBRA
COBRA Offering to Retirees
When a covered employee becomes entitled to Medicare before retirement, the spouse may be eligible for up to 36 months of COBRA continuation coverage.