CAN FSA PARTICIPANTS FILE CLAIMS FOR MEDICAL REIMBURSEMENT EXPENSES INCURRED AFTER THEIR TERMINATION?
by Sue Sieger, CFC COBRA regulations finalized in January 2001, clarify how medical reimbursements are affected at employee terminations. There are only two situations in which a medical reimbursement account can reimburse employees for expenses incurred after their termination date: 1) If claims are presented during the “forfeiture period” for expenses incurred prior to the date the employee terminates. This time period may vary by plan and is most often defined as 60 days following the end of the plan year. OR 2) If the employee elects COBRA and claims are presented during the COBRA coverage period and forfeiture period. This would include expenses incurred in the coverage period before the employee’s termination date and would be extended to include expenses incurred after their termination date. COBRA is only offered to a terminating employee if a positive balance remains in their medical reimbursement account. An employee who is electing COBRA would only be allowed to do so for th
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