HSA/FSA

[jala]

Company has a HDHP medical plan that also covers preventative care benefits, and has a Dental Insurance plan.

Company also has an HSA and an FSA. I understand that an employee cannot have both unless the FSA is a limited purpose FSA.

With the HDHP covering preventative care, and the dental insurance plan covering dental expenses, must the dental deductible and vision care expenses be filed under the FSA or can they be filed under the HSA if the employee elects out of the FSA?

Are dental expenses and vision expenses not considered as medical expenses under Code Section 213 and they cannot be paid by an HSA?

Since we are now able to fund the HSA to the annual limits, why would an FSA be needed if it would cover all of the above?

I would appreciate any assistance and/or direction in this matter.

Thank You

[Jacmo]

1) Dental and vision out of pocket expenses can be filed under either the FSA or HSA, depending on which the employee has.

2) Dental and vision out of pocket expenses are medical expenses under 213

3) Some employees might not be able to tolerate the exposure of an HDHP because it takes time to build a balance in the HSA. Under an FSA, they have the right to their total annual election up front. So they don't have to worry about getting caught early in the year with large out of pocket expenses.

For a list of types of folks who might not find an HSA suitable for their situation, go to www.gao.gov/new.items/d06798.pdf