HDHP w/HSA and leftover FSA - Question

[Guest sniffles]

As of October 1, 2010 I elected a HDHP. Since I was enrolled in the Flex Plan from Jan. 1, 2010 to Dec. 31, 2010, I did not open a Health Savings Account until around January 8th of 2011.

On our flex plan, if there is any money left over from all enrollees at the end of the plan year (Dec. 31, 2010) the money less any terminated employees who used more than they deposited subtracted from it, then the rest of the money is evenly distributed to all employees who participated in the plan on April 27, 2011 (the distribution date). Since I participated in the plan for the 2010 plan year I was eligible for the distribution. So as of April 27, 2011 I now have about $60 available to be reimbursed for any expenses after that date.

My question is would I have to use this extra disbursement for ONLY dental or vision care since I now have a Health Savings Account?

Thank you!

[J Simmons]

As of October 1, 2010 I elected a HDHP. Since I was enrolled in the Flex Plan from Jan. 1, 2010 to Dec. 31, 2010, I did not open a Health Savings Account until around January 8th of 2011.

On our flex plan, if there is any money left over from all enrollees at the end of the plan year (Dec. 31, 2010) the money less any terminated employees who used more than they deposited subtracted from it, then the rest of the money is evenly distributed to all employees who participated in the plan on April 27, 2011 (the distribution date). Since I participated in the plan for the 2010 plan year I was eligible for the distribution. So as of April 27, 2011 I now have about $60 available to be reimbursed for any expenses after that date.

My question is would I have to use this extra disbursement for ONLY dental or vision care since I now have a Health Savings Account?

Thank you!

Sniffles, get out your tissue. That $60 unless per plan terms may only be used for dental/vision/preventive/other ancillary health care disqualifies you from making contributions to your HSA for April, May and June. The plan might have such a limitation on your FSA $60 that applies because and automatically as a result of your HDHP coverage. (I suspect not, because you said you made no contributions in late 2010 after going HDHP coverage, and your having an FSA in place that year.)

If no such plan provision, that $60 FSA is preventing you from tax savings through contributions to the HSA. Get the $60 spent up and a reimbursement claim in before June 30 so that the July well for HSA contribution is not poisoned as your April, June and July ones are.