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Flexible Spending Programs
HCFSA > Agency Transfer, Termination, and Unpaid Leave


Agency Transfer
If you transfer agencies within the City or transfer to a City-related agency, you must notify the FSA Administrative Office at least 30 days prior to your transfer in order to continue payroll deductions.

Termination of Employment/Unpaid Leave of Absence
If your employment is terminated for any reason, or if you take an unpaid leave of absence, you can have the remainder of your deductions taken on a pre-tax basis from your last paycheck or pro-rated for the remaining paychecks. You must provide written notification to the FSA Administrative Office 30 days prior to your termination or unpaid leave of absence in order for the payroll deduction to be made.

Department of Education employees: if your employment is terminated, or you take an unpaid leave of absence during the summer, you must provide written notification to the FSA Administrative Office by the third week in May in order to have the remainder of your payroll deductions taken on a pre-tax basis from your June through August paychecks.

If you fail to notify the Office in time, you will be required to fully fund the remainder of your account with after-tax payments up to your annual contribution allocation. Keep in mind, however, that the full amount of your annual contribution allocation will still be available to you to pay claims for the remainder of the Plan Year.

At the end of the Plan Year in which you terminate employment, you and any qualifying dependents may choose to continue HCFSA coverage under COBRA (provided you did not default payment on your remaining HCFSA annual contribution allocation).

There are several important things to consider before electing to continue HCFSA under COBRA:
  • An additional 2% COBRA administrative fee will be added to your annual contribution amount; and
  • You will be required to pay the annual HCFSA administrative fee of $48; and 
  • Since your HCFSA allocation under COBRA will have to be paid with after-tax dollars, you will not receive the tax advantages you had while participating in HCFSA as an active employee.

Because there are no tax advantages to participating in HCFSA under COBRA, in addition to the additional 2% administrative fee on top of your regular allocation, you should carefully consider if COBRA participation makes sense for you.

For example, if you elect $600, you will actually have to pay $612 and you will be eligible for a total reimbursement of only $552. Remember, even under COBRA, you cannot change or revoke your elections during the Plan Year.
Learn more about COBRA coverage
See the Flexible Spending FAQ

Spotlight

Employee Assistance Programs (EAPs)
EAPs are staffed by professional counselors who can help employees and their eligible dependents handle problems in areas such as stress, alcoholism, drug abuse, mental health, and family difficulties.

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