LPFSA for Spouse

[ShowGal]

Hi, I'm hoping someone is able to confirm or deny what I've been told regarding limited purpose FSAs.

My husband and I work for different companies. We are both covered by an HDHP with HSA through his company.

I wanted to open a Limited Purpose FSA for each of us for next year. I couldn't open one through my company because I have to be enrolled in their medical plan. We were able to open one for him through his company, but we could only contribute for him (max of $2600). I was told he couldn't contribute for me because I needed my own account (by law).

Who is in the wrong here? Should my company allow anyone to contribute to a LPFSA or should his company allow him to contribute for me or is this just a no-win situation?

To add to the confusion, assuming I enrolled in my company's plan, they said they allow the employee to contribute for both the employee and spouse.

[Bill Presson]

Part of the issue may be semantics.

1. The 2017 limit is $2,600 for an employee/participant to contribute. That's true whether the employee is single, married, etc.

2. The dollars contributed, however, can be used for expenses for the employee, spouse or children.

3. As to your company's eligibility rules, that's plan specific and they control the eligibility.

4. His company nor your company can allow either of you to contribute an additional $2,600 for the spouse.

5. But since each of your expenses are eligible for reimbursement under the accounts, I'm betting that's what your HR people meant by allowing the employee to contribute for both.

[ShowGal]

Thanks Bill.

So if I understand what you're saying, the only way I could contribute to an LPFSA while on his medical plan is if my company allowed non-enrolled employees to setup one, which they don't, since it's tied to their offered HDHP plan. Seems unlikely that would ever be allowed. Wish the IRS would change it to be a family benefit just like an HSA.

[Bill Presson]

Thanks Bill.

So if I understand what you're saying, the only way I could contribute to an LPFSA while on his medical plan is if my company allowed non-enrolled employees to setup one, which they don't, since it's tied to their offered HDHP plan. Seems unlikely that would ever be allowed. Wish the IRS would change it to be a family benefit just like an HSA.

Yes, ma'am. But, y'all are both still eligible for expense reimbursement under his LPFSA.