In recent years, laser-based post-processing of thermally sprayed coatings has gained significant attention as an alternative post-processing route; to mitigate the microstructural defects such as pores, microcracks, and splat boundaries associated with thermally sprayed coatings. Optimisation of the parameters for the laser post-processing is of paramount importance to maintain the required properties of these coatings. The current thermo-mechanical model simulates the impact of laser heat treatment on thermally sprayed Tungsten Carbide Cobalt (WC-17Co) coating and AISI 316L as substrate. A sequentially coupled transient thermal and structural analysis is performed. Transient temperature field from thermal analysis due to laser source will become input loads for the subsequent stress-strain analysis with appropriate boundary conditions. Both the coating and substrate are given temperature-dependent material properties. A gaussian heat flux distribution is used to model the laser source. The finite element analysis results underline the importance of temperature gradients and the presence of thermally induced stress-strain fields responsible for promoting coating degradation. The obtained results also revealed that heat input and dimensional characteristics play a vital role in the annealing treatment's efficacy. Three separate test cases were considered wherein the hatch spacing was varied, keeping the other parameters (scan speed, laser power, and laser spot diameter) constant. The impact of hatch spacing on the temperature and residual stress distribution across the coating was assessed by this simulation. Residual compressive stress was observed in the coating for two out of the three test cases, which further improved the durability of the coating.