MMC Benefits Handbook
COBRA and Flexible Spending Accounts
What is the benefit of continuing contributions to my Health Care Flexible Spending Account or Limited Purpose Health Care Flexible Spending Account under COBRA?
If you have an outstanding balance in your Health Care Flexible Spending Account or your Limited Purpose Health Care Flexible Spending Account when you experience a qualifying event, you can elect COBRA and continue to receive reimbursements from your Health Care Flexible Spending Account or Limited Purpose Health Care Flexible Spending Account until the end of the calendar year. You can continue to receive reimbursements after your active employee coverage ends.
For example, if you elected to contribute $1,000 to a Health Care Flexible Spending Account for the calendar year and incurred expenses of $600 when your employment ended, you must elect COBRA continuation coverage in order for the additional $400 you spend to be reimbursed.
Note: Contributions must be made on an after-tax basis, plus an additional two percent for administrative expenses will be charged.