Q.- We have a health flexible spending account that allows a carryover from year to year. If a terminating employee has an under-spent FSA and can continue FSA participation under COBRA, do we consider the carryover amount in his FSA COBRA premium?
A.- No. The carryover amount is not taken into account when determining the premium for FSA COBRA coverage. The COBRA premium would be the employee’s salary reduction contribution (plus any nonelective employer contribution), plus 2%.