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FSA Coverage and HSA Contributions

FSA Coverage and HSA Contributions
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by Christopher Macali on 26 November, 2014 with Add new comment

Potentially the most frequent compliance question for employers with existing or new high deductible health plans (HDHPs) is the interaction between Health FSAs and HSAs in terms of participant eligibility and elections. In addition to coverage under a HDHP, in order to be eligible to make HSA contributions a participant also must not have disqualifying coverage under another health plan. Generally, Health FSA coverage is disqualifying coverage. However, employers offering HDHP plan options can still utilize the Health FSA if the plan is structured properly. For example, an employer that offers HDHP coverage as one of multiple health plan options can sponsor a general purpose FSA for employees that choose non-HDHP coverage or employees that elect the HDHP coverage but do not open an HSA bank account. In addition, limited purpose Health FSAs designed to reimburse only dental or vision expenses are not considered disqualifying coverage. A detailed discussion of applicable considerations can be found here. In addition, you can listen to our webinar presentation on the topic.

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Christopher Macali

Christopher Macali

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