The employee can submit receipts for services through the date of termination. Then the employee has 90 days after that date to submit receipts and get their money out of their account. This is the only option the employee has if they have already taken more out of their medical reimbursement account than they put in.

Employees who have a balance due them in their account on the date they terminate may have the right to elect COBRA coverage for the medical flexible spending account. In most cases, they should be given the option to continue to participate in the plan for the rest of the plan year on an after-tax basis. This will allow the employee to submit claims through the end of the plan year. COBRA rights do not apply to dependent day care flexible spending accounts.

All options should be incorporated into the employees COBRA notification if applicable. Note that the laws and regulations on COBRA and flex plans can change.