Navigating the Alphabet Soup: FSA/HSA Compliance Refresher

FSAs and HSAs come with a myriad of compliance rules. In this webinar, the Benefits Compliance team provided a review of the basic rules and nuanced issues surrounding these reimbursement arrangements.


Health Flexible Spending Account (FSA) and Health Savings Account (HSA):

  • Overview
  • Eligibility
  • Contributions
  • Distributions
  • FAQs and Compliance Nuances (throughout)
  • Final Takeaways

Key Takeaways

FSA Compliance Takeaways

  • FSAs can provide significant tax savings to employees and employers.
  • FSAs are employer-sponsored group health plans.
    • ERISA, COBRA, FMLA, HIPAA privacy rules generally apply.
  • Employers determine eligibility requirements and should keep the ACA’s “Footprint Rule” and Section 105 and 125 nondiscrimination rules in mind.
  • Employers should be mindful of the Uniform Coverage Rule.
  • Participants should be mindful of the “Use-or-Lose” Rule, as well as grace periods or carryover options, if any.
  • Employers and employees should understand the impact of FSA coverage on HSA eligibility.

HSA Compliance Takeaways

  • HSAs also have great tax advantages and can help employees to pay for qualifying medical expenses.
  • Employees own accounts and are ultimately responsible for complying with eligibility and contribution and distribution rules.
    • Employee education is helpful.
  • Employers should plan proactively when implementing HSA for the first time.
    • Work with vendor, so process and communications are coordinated.
    • Verify employees are not covered by impermissible coverage through the employer.
    • Consider funding employer contributions throughout the year, rather than in a lump sum.
  • Perform Section 125 non-discrimination testing early in the year, if possible.
  • Please reach out to your NFP contact, if you would like a copy of our HSA white paper with further info.