Declining FSA to be eligible for HSA?

[Guest Janiv]

My previous job had a high deductible insurance plan that also included a Wells Fargo HSA. I've since changed to a new job that has insurance plans with FSA accounts. If I pick one of these new insurance plans but decline the FSA coverage, can I still make eligible contributions and withdraws from my HSA for medical expenses?

[Guest Benefits Broker CO]

You would always have the right to make withdrawals from your HSA account (for qualified expenses) but you can only contribute to the HSA if your medical insurance coverage is "HSA compatible". If it is not compatible, then no you cannot continue to make contributions to the HSA.

[Guest GKNpro]

You would always have the right to make withdrawals from your HSA account (for qualified expenses) but you can only contribute to the HSA if your medical insurance coverage is "HSA compatible". If it is not compatible, then no you cannot continue to make contributions to the HSA.

What about the reverse situation?

I'm on an HDHP plan through employer but have chosen not to open or fund an H.S.A. account.

Can I contribute to a'regular' FSA (not Limited) also offered by my employer (who has given me okay to do so)?

I have triplets and one of them requires surgery on January 4th. The bonus of FSA is all funds are available right away, while HSA funds are like bank account. In addition I may be leaving the country (and therefore my employer) in June.

Thanks in advance.

[MARYMM]

You would always have the right to make withdrawals from your HSA account (for qualified expenses) but you can only contribute to the HSA if your medical insurance coverage is "HSA compatible". If it is not compatible, then no you cannot continue to make contributions to the HSA.

What about the reverse situation?

I'm on an HDHP plan through employer but have chosen not to open or fund an H.S.A. account.

Can I contribute to a'regular' FSA (not Limited) also offered by my employer (who has given me okay to do so)?

I have triplets and one of them requires surgery on January 4th. The bonus of FSA is all funds are available right away, while HSA funds are like bank account. In addition I may be leaving the country (and therefore my employer) in June.

Thanks in advance.

I'm pretty sure the answer to this scenario is also "No". If you are in an HDHP, you can only have a limited purpose FSA.

Are there other options you can pursue such as a loan or a hardship distribution from a 401(k) ?

[Guest Sieve]

I disagree with MARYM. FSA $$ can be used to pay deductibles in a HDHP (unless the FSA does not permit it--and, if the FSA is coordinated with the HDHP, then it usually prohibits that use only for those who actually participate in an HSA). If you do use a cafe FSA to pay deductibles, then you just do not have a HDHP anymore and cannot contribute to an HSA on a deductible basis.

[MARYMM]

I disagree with MARYM. FSA $$ can be used to pay deductibles in a HDHP (unless the FSA does not permit it--and, if the FSA is coordinated with the HDHP, then it usually prohibits that use only for those who actually participate in an HSA). If you do use a cafe FSA to pay deductibles, then you just do not have a HDHP anymore and cannot contribute to an HSA on a deductible basis.

I stand corrected. It is the HSA participation, not the HDHP, that restricts the FSA participation.

We actually advance the employer HSA contributions for those who have a documented need early in the year. But if you work for a company that doesn't fund the HSA, an employee who knows they are going to have a need early in the year may be able to use the FSA to pay the deductible - if the FSA document allows that.