Question of the Month: Air Ambulance Memberships: COBRA eligible expense? FSA/HSA eligible expense?

Dear Gina: Our company recently started offering an air ambulance membership that is company paid. Now, the first employee since we started the program has terminated, which begs the question, is this a COBRA eligible benefit?

A: These types of programs are relatively new, so the question of COBRA eligibility is a bit murky. But, in my alphabet-soup-expert opinion, I say “yes,” an air ambulance membership paid by the employer (or offered through the employer as a voluntary benefit) is indeed a COBRA eligible benefit. Here’s my connect-the-dots logic as it relates to other voluntary or employer-paid benefits:

    • Stand-alone employer paid Teledoc: Yes, it is a COBRA eligible benefit
    • Stand-alone employer paid EAP (Employee Assistance Plan) with 3 face-to-face visits: Yes, it is a COBRA eligible benefit
    • Employer paid Bridge HRA (Health Reimbursement Arrangement):  Yes, it is a COBRA eligible benefit. The HRA pays a portion of out-of-pocket insurance expenses.

Ergo, employer paid air ambulance with a monthly membership fee: Yes, it is a COBRA eligible benefit since it pays 100% of patient out-of-pocket medical transportation expenses.

So, regardless of who paid the premium, the ex-employee has access to the service for the remainder of the 12 months and should not pay a monthly COBRA fee for something that was prepaid while employed.

If, however, the 12 months expires and the ex-employee was already enrolled as a COBRA participant, they should be offered the air ambulance benefit at open enrollment so they can pay another $50 to have 12 additional months of service.

What about FSAs & HSAs?

And, since we’re begging for questions, this begs yet another one:

Is the air ambulance membership fee an eligible expense for a Flexible Spending Account plan or to run through a Health Savings Account?

That answer is definitively no.  It’s a monthly premium just like a monthly concierge fee. Health FSAs and HSAs do not reimburse premiums. If the air ambulance was never used, then no medical service was needed and both the Health FSA and HSA are all about dates of service when a medical, dental or vision expense happened.

– Gina

 

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