Individual HSA when employer has FSA?

[Guest JMKane]

My wife has a private HSA eligible HDHP. However, I have been reading that we may not be able to contribute to an HSA because my employer provides a plan made up of an employer funded Health Reimbursement Arrangement and an employee funded Flexible Spending Account. My employer plan is use-it-or-lose-it for all funds in a given year (regardless of whether it was employer or employee funded).

Does anyone know if I can or can not contribute to an HSA?

Thanks.

[Guest marjbarge]

Hi All: I have created a problem. Please help! I elected to have $20.00 taken from each paycheck to fund an FSA (not restricted to dental, vision etc). Meanwhile (effective 5/1/14), I chose a High Deductible (HSA eligible) insurance policy from the Affordable Care Act marketplace. After all this was complete (and undoable) I found research saying I cannot have both plans at the same time. It seems I cannot stop my FSA contribution because I have not encountered an eligible "Change in Status" which is limited to marital status, # of dependents, employment status etc. I cannot change the type of insurance policy I have-I already checked and was told "no". How can I get out of the FSA so I can fund my HSA account? What is the penalty if I set aside and spend $520 in my FSA and fund my HSA (likely by not more than $2,000). Thanks so much. Marjorie

[GBurns]

Who told you that the policy from the marketplace was undoable, by which I think you mean that it cannot be cancelled?

Do you have health coverage from your employer?

What does the FSA cover?

Where did you see that you cannot have an FSA and a marketplace policy?

[Guest marjbarge]

I called Connect for Health Co and asked to switch from HDHP to regular policy and was told I could not. I didn't ask to cancel the policy. Maybe that is an option for me. I would have until tonight to select a traditional insurance policy.

I am not offered insurance by my employer.

The FSA covers anything medical except Insurance Premiums.

I asked around and looked on the internet and saw that I could not contribute to an FSA and an HSA simultaneously.

Thanks for your feedback. Wihile I wait to hear from you I will call Connectforhealth and try to cancel the HDHP.

[Guest marjbarge]

Dear George:

I just spoke to Connectforcolorado and asked to cancel my HDHP then purchase a traditional plan. I was told that I could cancel my current plan, but since I am outside the open enrollment period and my reason for wanting to purchase a new plan does not qualify as a "life change" event I would not be permitted to purchase a traditional plan.

Thanks

[Guest marjbarge]

Can I avoid trouble by keeping the High Deductible plan and the FSA deduction and not setting up an HSA account?

[masteff]

saw that I could not contribute to an FSA and an HSA simultaneously.

While your HDHP might be HSA eligible, it is not the same as contributing to an HSA. They are separate things.

Just don't contribute to an HSA while you have the FSA.

[Guest marjbarge]

That was what I supposed was my best case, but someone said just having an HSA eligible HDHP (even without starting or contributing to the HSA) was a problem if you have an FSA. Thanks!

[Chaz]

A HDHP is just a special type of health plan that permits contributions to be made to an HSA. An individual can only make contributions to an HSA if the employee has an HDHP and does not have disqualifying coverage. A general purpose health FSA is disqualifying coverage, which means that you cannot have the FSA and still contribute to the HSA even though you have a HDHP.

So, you are correct that you can keep the HDHP and the health FSA.

[Guest sniffles]

Is anyone going to answer JMKane's question which was actually the topic before Margbarge high-jacked this post?

[masteff]

Not likely - 1) that question was 2 years old when the new question was added to the thread - since old threads aren't locked, keep an eye on the posting date to know what's old vs new activity - and 2) the HSA/HRA landscape has changed with new rules going into effect on 1/1/14 so the original poster would be better served to start a new thread based on current facts http://www.dol.gov/ebsa/newsroom/tr13-03.html