FSA, COBRA and Rollover: It’s Complicated
We’ve already discussed that Health FSAs are COBRA eligible. If that’s a new topic for you, check out our article. However, the inner workings of how FSAs and COBRA interact create complications that require detailed clarification. One such topic is how FSA rollovers impact COBRA premiums. If it seems confusing, don’t feel bad. It’s a confusing topic for even the most seasoned HR professional. Here are a few Q&A to keep in mind:
- Are rollovers included in the remaining annual amount that may be continued with a COBRA Election?
Yes – the rollover amount is included in determining the amount that a qualified beneficiary is entitled to receive during the remainder of the plan year.
- Is a rollover amount taken into account when determining the COBRA premium?
According to IRS guidelines, rollovers are not counted when determining the COBRA premium.
- Are rollovers included when determining whether an account is overspent?
Because the IRS has determined that rollovers are included when determining the amount to be offered for a COBRA election, rollovers must also be counted when determining whether an account is overspent or under spent.
These are just a few common questions. There are certainly more in-depth scenarios that impact how COBRA and FSAs interact. If the above seems complicated, you’re right! And that’s exactly why you should partner with an experienced COBRA and FSA administrator to track the complicated details for you! Give us a call at (800) 865-4485 today and let our expertise start working for you.