Change from general FSA to limited FSA

[SLuskin]

An employer has both a general purpose FSA and a limited purpose FSA. We just got an email from the employer saying that an employee has had a status change and is moving from the copay plan to the HDHP plan. She wants to change her general purpose FSA to a limited FSA and start making contributions into the HSA instead.

Has anyone ever heard of anything like that?

I have not.

Thanks.

[GBurns]

I would first verify that there was an eligible change of status and the nature. I think that this is needed in order to determine what change is allowed under the "Consistency Rule".

[SLuskin]

I would first verify that there was an eligible change of status and the nature. I think that this is needed in order to determine what change is allowed under the "Consistency Rule".

Her husband retired from his job and she moved from his health plan to her company's plan. She had a choice of a copay plan or an hDHP plan. That's definitely ok.

However, she has a general purpose FSA which is a calendar year plan. She has a balance in that account of $800. I am questioning her ability to move that into a limited FSA midyear. I have never heard of that.