Tag: HSA

Question: If an employee has money left in his or her healthcare flexible spending account (FSA) to roll over, but decides to enroll in the company health savings account (HSA) at the new plan year instead of the FSA, what happens to the excess funds from this year? Can the employee use those funds for other…

Question: Is an HSA subject to the “Cadillac tax”? Answer: The “Cadillac tax” provision of the Affordable Care Act is scheduled to become effective in 2018. The IRS is expected to issue guidance for the administration of this excise tax including the method and timing for payment closer to 2018, so there may be changes to…

Question: Can Health Saving Account (HSA) distributions be used for a dependent covered under a non-HSA plan? Answer: Yes, monies in an individual HSA account may be used for a dependent not covered under the High Deductible Health Plan (HDHP), as long as the dependent is claimed on the participating employee’s tax return, and the…

Question: Does an employer have to allow an individual to change his/her Health Savings Account (HSA) contribution mid-year? Answer: An HSA must permit participants to change elections at least monthly, as eligibility is determined on a monthly basis, even if the HSA is provided through the cafeteria plan. However, the change must be prospective.  This…

Question: Is an employee disqualified from making HSA contributions if she has a dependent on her HDHP while he is simultaneously covered by military insurance? Answer: The short answer to your question is no, the employee may still have the Health Savings Plan (HSA) and make contributions.  The dependent’s non-HDHP coverage does not affect the…

Question: Can an employee enroll in FSA and still have an HSA account, just not contribute to it? Answer: Once an employee is eligible for and establishes an HSA, the funds remain his/her property and s/he can use those funds tax free as long as they are used only for qualified medical expenses. According to IRS…

On December 16, 2013, the Internal Revenue Service (IRS) released Notice 2014-1. The notice provides guidance on the rules for cafeteria plans, including health and dependent care flexible spending arrangements and health savings accounts, as they relate to the participation by same-sex spouses in certain employee benefit plans following the U.S. Supreme Court decision in…