TO: Principals/Administrators of Participating Schools
FROM: Brian C. Meekhof, Benefits Administrator
Flexible Spending Account Plan COBRA Provisions
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is applicable to the health care reimbursement/spending account of the Rainbow Plan.
If a qualifying event (death, termination, or layoff) occurs:
You must notify employees of their COBRA rights; employees have 60 days from date of notification to elect to continue participation in the health care reimbursement/spending account.
- If the employee does not elect to continue coverage under COBRA, only health care expenses incurred prior to termination will continue to be reimbursed.
- If the employee elects to continue coverage under COBRA, health care expenses incurred after termination will also be reimbursed. Contributions will be made through the employer on an after-tax basis plus a 2% administration fee.
- COBRA does not apply to the medical contribution (premium) account or to the dependent care expense account. However, dependent care expenses (including expenses incurred after termination) will continue to be reimbursed up to the amount contributed by the employee.
- Please review the COBRA information contained in the Christian Schools International Group Flexible Spending Account Plan Administration Manual, page II-6 and the sample notification letters on pages II-9 and II-10. Copies of the notification letters are attached.