How Alice handles COBRA notices

Meta description: COBRA generally does not apply to §132(f) commuter benefits. Here's why, and how Alice handles departing-employee notices.

Target keywords: COBRA commuter benefits, COBRA §132(f), Alice COBRA, commuter benefits termination notice

Footnote stack: Plan details, Eligibility, Trademarks, Tax & legal advice

Body

COBRA continuation coverage generally does not apply to §132(f) commuter benefits. COBRA covers group health plans (medical, dental, vision, FSA in some cases). Commuter benefits are a fringe benefit under IRC §132 and aren't structured as a group health plan, so the standard COBRA election notice isn't required.

What does apply

Plans must follow their own termination procedures. Alice notifies departing employees of their run-out window (the limited time after termination during which remaining commuter dollars can be used for qualifying commute expenses already incurred). Specific run-out periods depend on your employer's plan design.

When the employee leaves

Through payroll integration, Alice picks up the termination event. New payroll contributions stop. The employee gets a notice of the run-out period. The Alice Card is deactivated per the plan rules.

What employees should know

Unspent balances can't be cashed out (federal rule). Used dollars stay used. The employee should plan their last election before leaving to right-size their commute spend. See Article 20 for departing-employee guidance.

What employers should know

You don't need to issue COBRA notices for commuter benefits. Standard offboarding (final paycheck, benefit termination notices) handles it. Some state laws have their own final-paycheck rules for unused balances; see Article 28.

Documentation

Alice retains contribution and termination records for the standard recordkeeping window (typically three years), supporting any later audit or employee inquiry.

Employers: sales@thisisalice.com or (929) 552-4625. Employees: support@thisisalice.com or (888) 431-4355.

Specific benefits, election rules, and run-out periods depend on your employer's plan design. Check with your HR team or plan administrator for details. For the full list of eligible commuter expenses, see "What parking and transit expenses are eligible?" at help.thisisalice.com/article/52. Eligibility is set by IRC §132(f). Trademarks, brands, and product names referenced in this article are the property of their respective owners. References are for descriptive purposes only and do not imply endorsement. Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.