Q&A: Administrators: Compliance
« BackQuestion: Are flex plans affected by COBRA rules?
Answer:
These rules are exceedingly detailed. Here's a brief summary of provisions that apply to certain Medical FSAs:
COBRA-Compliant Employer - an employer of 20 or more on at least 50% of its "typical business days." In counting heads, part-timers now count as a fraction of an employee, rather than as "one."
Medical FSAs Under COBRA - an employer does not have to offer COBRA when the participant could not gain in benefits as much as he/she would have to pay in contributions for Plans meeting certain criteria.
Re-Enrollment of COBRA Continuees in Medical FSAs for New Plan Year - if an employer's flex plan is not subject to HIPAA portability provisions (the vast majority aren't) then, again, the employer does not have to offer COBRA in situations where the participant could not gain in benefits as much as he/she would have to pay in contributions.
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Some portions of an answer may reflect the specific administrative practices of our firm, and may not be universally applicable to all flexible benefit plans.
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