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Health Savings Account/Flexible Spending Account
Old 07-25-2008, 08:06 PM   #1
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Health Savings Account/Flexible Spending Account

I'm hoping someone can help. I know the rules say you cannot have an FSA if you are covered by an HSA. But, what happens if your insurance changes mid-year?

We had an HSA for my DH and our 2 children. I was covered by employer's plan and declined to participate in the FSA offered.

NOW, entire family is on plan through my employer and we have cancelled the plan that was tied to the HSA. The HSA administrator will be calculating our maximum contribution based on 6 months in the plan and refunding us the overpayment.

My question is...Can I now join the FSA plan for the second half of the year. Or must I wait until 2009? If I must wait, what about using the $250 that my employer contributes to the FSA plan. Can I at least use that?

Thank you!
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Old 07-26-2008, 07:50 AM   #2
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Quote:
Originally Posted by Bongybo View Post
I'm hoping someone can help. I know the rules say you cannot have an FSA if you are covered by an HSA. But, what happens if your insurance changes mid-year?

We had an HSA for my DH and our 2 children. I was covered by employer's plan and declined to participate in the FSA offered.

NOW, entire family is on plan through my employer and we have cancelled the plan that was tied to the HSA. The HSA administrator will be calculating our maximum contribution based on 6 months in the plan and refunding us the overpayment.

My question is...Can I now join the FSA plan for the second half of the year. Or must I wait until 2009? If I must wait, what about using the $250 that my employer contributes to the FSA plan. Can I at least use that?

Thank you!
Myself and DW have worked at 3 companies and enrollment to the FSA is only once per year. I suggest you contact your HR department as there may well be exceptions to this particularly if, as you say, your employer is actually kicking in $250 to your FSA.

Another way to see if that $250 in your company FSA is available is to file a claim.
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Old 07-26-2008, 01:46 PM   #3
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My former employer offered a FSA, and enrollment was only open for (IIRC) 2-3 weeks in December of the current year for an FSA starting January 1st of the following year. The 'window' was only open for those 2-3 weeks with NO exceptions. So, if you were hired anytime between Jan. 1st and the 'window' dates, you had to wait until that 'window' opened in December.

When a new hire came on board, HR would inform him/her of all of the employee benefits offered including the FSA, and they also informed him/her that the enrollment 'window' would be open for them (along with everyone else) in Dec.

I have no idea whatsoever how the FSA rules at other places of employment operate, so like Alan said, contact your HR rep.
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Old 07-26-2008, 02:09 PM   #4
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As an aside, it's not *entirely* true that you can't have an FSA with an HSA. You can, but it is more limited in what it can be used for. I have a "limited FSA" which can still be used for dental, orthodontic, vision, OTC medications and OTC medical supplies. It can't be used for medical copays, deductibles or prescriptions, though. Those are what the HSA is for.
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Old 07-26-2008, 05:43 PM   #5
Confused about dryer sheets
 
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Thank you for the replies! You are correct that there is a limited window once a year for signing up to contribute to the FSA. However, I thought I saw something on the internet that indicated you could jump in IF your circumstances changed. I'm not sure if I would even qualify in that regard, but have sent a message to our HR department. . .and am waiting for a reply. (The company previously charged employees for the full amount of any family coverage. As of July 1 they are kicking in a large percentage which allowed the family to go on the much better company plan for comparable premium.)

I feel certain if I filed a claim for the $250 my employer contributes it would go through. I'm just wondering if there would be tax consequences for doing so. BTW, our FSA is NOT a limited plan.

Thank you, again, for the input.
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Old 07-26-2008, 07:46 PM   #6
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I feel certain if I filed a claim for the $250 my employer contributes it would go through. I'm just wondering if there would be tax consequences for doing so. BTW, our FSA is NOT a limited plan.

Thank you, again, for the input.
I don't believe there will be any tax implications based on our experience. My wife's previous employer used to make contributions to her FSA. I know that normally it is the employee that makes all the contributions, but not always.

Even if the worst happens and you get taxed on the $250 you claim, then you are still in pocket by almost $200.
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