Q.- An employee terminated employment. She had a carryover balance in her FSA, but did not make an election for this year. Do we have to offer COBRA for the FSA?
A.- This would be determined by the terms of the FSA. Some FSAs provide for a loss of the carryover upon termination of employment. Others allow the carryover under COBRA.
The carryover is not taken into account in determining the COBRA premium. So, if the employer offers COBRA for the amount remaining in the carryover, there would be no premium charge for this part of the benefit.