FSA/HSA Impact

[DTH]

Our cafeteria plan has a health FSA. What are the impacts on the FSA if an employee's spouse has a HSA? Are there any impacts on the spouse's HSA?

I assume that an eligible expense cannot be paid by both the FSA and HSA.

[g8r]

The problem is that contributions might not be allowed to be made to the spouse's HSA. One of the requirements to eligible to make HSA contributions is that the individual generally have no other coverage for amounts below the high deductible. A typical health FSA covers expenses of the participant, the participant's spouse and his/her dependents. This would make the spouse ineligible for an HSA. The way around this is to either drop or modify the health FSA (which generally can't be done mid-year absent a change in status). If the spouse has inidividual only coverage, the FSA could limit expenses to just those of the participant (i.e., exclude any expenses incurred by the spouse). Or, the health FSA could be a limited one -- no amounts below the high deductible are covered or the expenses covered by the FSA are permissible (preventative care, dental, vision, etc.).

Thus, a typical health FSA is problematic when you want to establish an HSA for the participant, the participant's spouse, or the participant's dependents.