Demystifying HSAs

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Amber Posthauer: Good afternoon, everyone. Thank you for joining us today. We're going to get started here in 60 seconds to allow for all registrants to get connected. We'll get started shortly.

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Amber Posthauer: Welcome, everyone, to Demystifying HSAs, Recent Changes in Compliance Essentials. Thank you all so much for joining us.

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Amber Posthauer: The Benefits Compliance Team will be answering the questions you send through the Q&A today. We'll try our best to answer all of your questions, but if for whatever reason we are unable to get to your question today, please follow up with your advisor for further assistance.

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Amber Posthauer: Today's presentation is being recorded. We will be sharing the recording in the follow-up email and on the NFP website. If there are any portions of this call that you missed, by Monday, you'll receive an email with a link to the full recording.

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Amber Posthauer: The PowerPoint slides used during this presentation will be shared in the same email.

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Amber Posthauer: At this time, I'll turn it over to Kelly Ackman, Vice President of NFP Benefits Compliance, and Patrick Myers, Vice President and Council of NFP Benefits Compliance. Patrick, the floor is yours.

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Patrick Myers: Thank you, Amber. Hello, everyone, and welcome to the first Get Wise Wednesday webinar of the year.

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Patrick Myers: Today, we're going to be talking about HSAs.

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Patrick Myers: And, before we get started.

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Patrick Myers: A couple of administrative notes. First, we should be supplying you with a link to the slides in the chat, in case you want to read along as we present today. You can access that through that link.

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Patrick Myers: We also have a disclaimer. The information that we're going to be providing to you today is for general informational purposes only. If you have any specific legal or tax questions relating to HSAs or any other information we'll be providing you today, please forward those to your lawyer or tax advisor as appropriate.

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Patrick Myers: And any information and all information that we give today is current as of today.

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Patrick Myers: My name is Patrick Myers, and my colleague Kelly Ekman and I will be presenting this presentation to you. Here are our beautiful faces that you can associate with our lovely voices as we go through our presentation today.

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Patrick Myers: So here's what we're going to be talking about. We're going to start off, Kelly is going to provide an overview of HSAs, their basics.

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Patrick Myers: What they are, how they're implemented, and how they are used in a benefit plan.

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Patrick Myers: Then I will chime in and talk about the changes to HSAs that were implemented with recent federal legislation.

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Patrick Myers: Then Kelly will come back and discuss some common scenarios and issues that arise when it comes to HSAs and your benefit plans, to also help illustrate some of the issues and other things that we raise in the presentation.

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Patrick Myers: And then we'll wrap it up with some key takeaways.

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Patrick Myers: So first, let's get started by looking… learning more about the basics of HSAs. Kelly?

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Kelly Eckman: Alright, thanks, Patrick. Yeah, hopefully everyone on the call is familiar with HSAs in general, although I know, it kind of depends on

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Kelly Eckman: where you're located as far as if high-deductible plans and HSAs are a common product, or maybe you're still used to other types, but it's definitely important to understand because these are becoming more and more popular. So we want to take a step back and just say, you know, what are HSAs?

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Kelly Eckman: So, again, there are, savings and investment accounts that allow eligible individuals to pay for or otherwise reimburse themselves for qualified medical expenses for themselves, a spouse, or a tax dependent.

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Kelly Eckman: You'll often hear HSAs referred to as triple tax advantaged accounts. So what does that mean? Well, there are 3 different ways that, someone that has an HSA may see tax savings.

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Kelly Eckman: The big one we think of is that contributions can be made on a pre-tax basis, so if they're going through payroll, they're usually done on a pre-tax basis, or if you're contributing to an HSA on a post-tax basis, you can still get that tax break when you file your taxes.

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Kelly Eckman: If you, have chosen the option to, you know, invest the account, investment earnings or interest associated with the account can grow on a tax-free basis.

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Kelly Eckman: And then, distributions or reimbursements from the account, those are also tax-free as long as they are for qualified medical expenses. And we're going to talk through what exactly qualified medical expenses are, a little bit later on.

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Kelly Eckman: HSAs are individual accounts. I think this one kind of catches people off guard sometimes. You cannot have a joint HSA with your spouse, so only one person actually owns the HSA. Now, we'll talk later about how you can use the funds for your spouse, but there's only one account owner.

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Kelly Eckman: The funds will stay with the employee. Unlike an FSA, where it's a use-it-or-lose-it, you do not have to spend HSA money by the end of the year. If you terminate employment, you know, with the job that offered you that HSA, that money is still yours. You take it with you, forever, basically.

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Kelly Eckman: The funds will keep carrying over, so again, even if maybe last year I was HSA eligible, this year I enrolled in a PPO plan, those funds are still there for me. I can't contribute to them, but I can still use them, even though I can no longer make HSA contributions this year.

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Kelly Eckman: So, HSA eligibility. So, how can someone be eligible to make HSA contributions? So, the first one here, you must be enrolled in a qualified high-deductible health plan. I mean, I put that in bold, because it's important to understand that a qualified high-deductible plan is a little different.

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Kelly Eckman: So, what is a qualified plan? It meets the IRS minimum annual deductible and maximum annual out-of-pocket requirements.

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Kelly Eckman: So, for 2026, the minimum annual deductible is $1,700 for self only, and $3,400 for family. Again, these are just minimums, so the minimum amount

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Kelly Eckman: That the high-deductible health plan has to have.

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Kelly Eckman: For those, out-of-pocket requirements, the maximum amount is $8,500 for self-only, or $17,000 For family coverage.

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Kelly Eckman: A qualified high deductible plan also says that it cannot, the high deductible plan cannot provide significant benefits or coverage until, again, the statutory minimum deductible is met. The only exception here is preventive care.

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Kelly Eckman: Now, preventive care is going to be, you know, annual wellness visits, well-child appointments, routine prenatal care, some immunizations and screenings. But, when we think of the bulk of healthcare we may get throughout the year, things like, I'm sick.

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Kelly Eckman: I have an ongoing illness or injury or condition, those are not going to be considered preventive care services. So those,

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Kelly Eckman: You cannot… you have to pay those before you get to that minimum deductible.

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Kelly Eckman: The other thing here for an HSA is that the account holder cannot have what's called impermissible health coverage.

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Kelly Eckman: So, impermissible health coverage is other health coverage, that is not a qualified high deductible plan, and that coverage is provided before that statutory minimum deductible that I mentioned is met. So, what are some examples of this?

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Kelly Eckman: Other medical coverage, let's say your spouse has a plan that also covers you, and it's a PPO plan. Or sometimes you'll have a plan called a high deductible plan, but it is not a qualified high deductible plan. It doesn't meet that criteria that I mentioned above.

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Kelly Eckman: Other impermissible coverage are some government programs. So, Medicare. Now, it's important to remember that Medicare, they call it entitlement to Medicare.

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Kelly Eckman: Really, that means you are eligible for and enrolled in that coverage. So just being eligible for Medicare wouldn't make it impermissible. You have to also be enrolled in it.

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Kelly Eckman: For it to be impermissible.

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Kelly Eckman: Medicaid and TRICARE are also impermissible, and then VA benefits. These are a sometimes…

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Kelly Eckman: impermissible, and sometimes not. So, when does this happen? So, if someone is receiving benefits through the VA,

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Kelly Eckman: it would be considered impermissible coverage if they have received those services in the prior 3 months. The caveat here is that if those services received were preventive care or services, specifically for a service-connected disability.

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Kelly Eckman: then it would not be impermissible coverage. But if somebody is going to the VA just for their routine, you know, sickness or medical care, then it would be impermissible coverage.

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Kelly Eckman: Another big one here, so general purpose FSAs or HSAs, those are impermissible. Limited purpose FSA, that's only going to reimburse dental or vision, that would be allowed, but those general purpose accounts that also reimburse medical care, those are problematic.

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Kelly Eckman: This next one happens quite a lot, so if a spouse has, you know, an FSA or an HRA that can reimburse the account holder's expenses, it would be considered impermissible coverage, even if I, as the account holder, never submit expenses to that. But the fact that my expenses could be

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Kelly Eckman: Covered by that account makes it impermissible for me.

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Kelly Eckman: And we'll talk about that later, as well as this next one. You know, FSAs sometimes can trip us up, because if they have a grace period, which allows additional time for someone to incur claims under the plan.

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Kelly Eckman: Or potentially a carryover, where you can carry over money from one plane year to the next, those can also cause issues with compatibility for an HSA, and we'll talk about those a bit later.

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Kelly Eckman: Now, one way that an HRA can work nicely with an HSA is a post-deductible HRA. And so that's an HRA, but it doesn't begin reimbursing someone until that

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Kelly Eckman: qualified high deductible minimum deductible has been met. So that's $1,700, or that $3,400.

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Kelly Eckman: Once somebody has hit that number or a number above that, then the HRA can start paying. So there are ways that an employer can offer an HRA alongside an HSA. You just have to be strategic about it.

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Kelly Eckman: Okay, so contributions, so the amounts that we can put into our HSA.

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Kelly Eckman: The annual maximum amount that you're allowed is based on the tier in which you are enrolled. And that's true even if someone else that is enrolled or covered by your health plan, they are not HSA eligible.

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Kelly Eckman: themselves. And so, looking at 2026, so the self-only level, the maximum HSA amount is $4,400, and then for family coverage, it is $8,750 for this year.

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Kelly Eckman: So, both employee and employer contributions count towards the maximum. So, if I'm enrolled in self-only coverage, and my employer gives me $1,000 towards my HSA, I can only contribute up to $3,400, because the two amounts together cannot exceed that $4,400 limit.

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Kelly Eckman: If I'm age 55 by the last day of the year, I can also contribute an extra $1,000 catch-up

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Kelly Eckman: to my HSA. And if you have two spouses, who are both 55 or older, they both can have that catch-up. But again, because HSAs are individual accounts, each person would have to have a separate account to make that $1,000 catch-up.

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Kelly Eckman: And again, these amounts, we only have self-only and family, so those are the only two tiers that the IRS gives us. So, self-only, obviously you cover just the employee, and then anything else above that, whether it's actually family coverage, or employee plus spouse, or employee plus children, those are all going to fall into that family tier.

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Kelly Eckman: Now, contributions can be front-loaded. They don't have to be made routably throughout the year, but you can have an issue if, let's say, someone says, oh, I'm getting a bonus and I want to contribute

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Kelly Eckman: the entire amount, you know, in January when I get that bonus. Well, you can, but if your eligibility changes later in the year, you're going to have a problem making those contributions. So generally, having people make those radically throughout the year makes more sense.

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Kelly Eckman: And so, you know, the contribution rules, here's how we know how much someone can contribute. So first, we have the monthly contribution rule.

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Kelly Eckman: So, HSA eligibility is always determined each month based on someone's status as of the first day of the month.

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Kelly Eckman: And so, the annual maximum that someone can contribute is based on the number of months that someone is eligible.

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Kelly Eckman: So, let's say you have a new hire, and they enroll in July.

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Kelly Eckman: And they were previously on a PPO at their employer. They would be eligible for 6 twelfths of the annual max based on the tier in which they are enrolled, and that's because they were not eligible for January through June. So they can only make 6 out of the 12 months.

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Kelly Eckman: The other option would be what's called the full contribution rule. Sometimes it's called the last month rule, sometimes it's called the 13-month rule.

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Kelly Eckman: This says that you can actually make the entire annual maximum contributions, so you don't have to promote or prorate it, if you are HSA eligible on December 1st.

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Kelly Eckman: Regardless of if you were actually eligible for the entire year. So, if you don't join the Qualified High Deductible until December 1st.

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Kelly Eckman: you may actually be able to make an entire year's worth of contributions. But, and here's the big but here, you must remain HSA eligible throughout the end of the following calendar year, so 13 months.

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Kelly Eckman: or otherwise, those excess amounts would be subject to an additional 10% tax. So while it sounds like a good thing for someone who wasn't eligible for the entire year, they have to really make sure that they're going to be HSA eligible for the entire next calendar year, if they want to utilize that.

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Kelly Eckman: So what's the employer's role in all this?

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Kelly Eckman: Well, first, you need to decide if you will contribute to the HSA of your employees. You don't have to, but oftentimes employers do. And then what frequency? Are you gonna make one lump sum? Are you gonna do it per payroll? Are you gonna do it on a monthly basis? Decide what frequency you're gonna do it.

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Kelly Eckman: employers should have a reasonable belief that the employee is eligible for an HSA. And really, what that means is that you are verifying that the employee is enrolled in your qualified high-deductible health plan.

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Kelly Eckman: and they're not enrolled in other coverage offered by you, that would be impermissible. So, if you also have an FSA or an HRA, that you are verifying they are not enrolled in that.

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Kelly Eckman: Now, it doesn't mean that you have responsibility to know if their spouse has an HRA that covers them. You're just responsible for verifying that they are, you know, not enrolled in impermissible coverage that you offer.

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Kelly Eckman: And then you need to think about, how am I going to handle new hires?

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Kelly Eckman: Or someone who is newly enrolling in the plan. Are they going to get the entire contribution that we make, or are we going to prorate it based on the number of months? So, hopefully those are things you've already thought through, but if not, definitely, you know, sit down with your team and figure out how you want to handle HSA contributions to employees.

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Kelly Eckman: Okay, so distributions. So, using your HSA money. So the funds have to be used to pay qualified medical expenses, and if so, they are not subject to federal tax.

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Kelly Eckman: But what is a qualified medical expense? So, we've got the definition here. So, the cost of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.

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Kelly Eckman: Okay, so, over-the-counter supplies and items, things like band-aids, reading glasses, sunscreen, menstrual products, or medicines that don't require a prescription.

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Kelly Eckman: Those are considered qualified expenses, and that's kind of come up and down over the, you know, they were allowed for a long time, the ACA said no over-the-counter

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Kelly Eckman: products are not allowed, then the CARES Act during COVID said, just kidding, you can actually use these as qualified expenses. So that's where we are today. However, medicines from other countries, cosmetic procedures, gym memberships, those are generally not going to be qualified expenses.

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Kelly Eckman: You cannot incur expenses prior to opening an HSA, so if… if I wasn't eligible for an HSA until 2026, I can't submit a doctor's appointment from December of last year.

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Kelly Eckman: The distribution, so if an HSA is used for non-qualified medical expenses, they're going to be subject to a 20% tax penalty plus regular income taxes. So it's really important that they're used on qualified medical expenses.

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Kelly Eckman: And I've got kind of a warning here we'll talk about later. So be wary of companies that are claiming expenses are HSA eligible.

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Kelly Eckman: Account holders, at the end of the day, they have to make that decision for them, but sometimes you'll see companies getting a little loose with trying to say what is HSA eligible or not.

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Kelly Eckman: At the end of the day, the account holder is the one that has that responsibility to make that decision.

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Kelly Eckman: Alright, now it looks like Patrick's gonna lead us through, the recent changes.

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Patrick Myers: Thank you, Kelly. As you know, the One Big Beautiful Bill Act was enacted on July 4th of 2025, and among many other things that that statute did, it initiated a lot of changes in how HSAs are administered and operated.

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Patrick Myers: So, what they did was, is they expanded telehealth access by making permanent the exception for telehealth services that Congress introduced during the pandemic.

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Patrick Myers: It also made certain plans in the exchange, specifically bronze and catastrophic exchange plans.

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Patrick Myers: Made those, designated those as acceptable coverage for HSAs.

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Patrick Myers: And then they also made, some direct primary care arrangements

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Patrick Myers: permissible coverage that can be paid for through an HSA, although the details for those are pretty important, because only specific kinds of direct primary care will apply.

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Patrick Myers: So let's get into a little more detail on these three things.

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Patrick Myers: So, telehealth services. You may recall that, before the pandemic.

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Patrick Myers: Telehealth services were considered, by and large, impermissible coverage, for, as Kelly pointed out earlier, it would often provide coverage before that deductible was met.

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Patrick Myers: However, during the pandemic, the government wanted to encourage people to use telehealth services, in part to prevent the spread of COVID, and so in order to do that, they created an exception for telehealth services, in which you could

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Patrick Myers: enjoy telehealth service benefits without jeopardizing your ability to make or receive contributions to your HSAs.

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Patrick Myers: This exception was supposed to be temporary, but Congress had basically renewed it every year since 2020.

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Patrick Myers: So that by the end… by 2025, when the OBBBA was enacted, Congress had pretty much decided to make it permanent, in which they did with this particular statute.

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Patrick Myers: So, the OBBBA permanently allows group health plans to offer telehealth services to HDHP participants before those deductibles are met, without affecting the eligibility.

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Patrick Myers: There are a few details here.

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Patrick Myers: And it does apply retroactively for plan years that begin after December 31st, 2024.

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Patrick Myers: So, if you had a HSA

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Patrick Myers: On the beginning of 2025, and you also had, enrolled in telehealth services through your plan.

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Patrick Myers: Even though, strictly speaking, it did not become permanent until July of 2025, if you were enrolled in the telehealth services at the beginning of 2025, any contributions you made.

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Patrick Myers: during that time, or before the OBBBA was enacted, then that would be fine, as far as the government was concerned.

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Patrick Myers: This relief also extends to services that are included on the list of telehealth services provided by Medicare, as published annually by the Health and Human Services Department.

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Patrick Myers: It also, there's also some guidance that the IRS has, issued back at the end of 2024, or I'm sorry, 2025,

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Patrick Myers: That provides instructions for determining whether or not a service that's not on that Medicare list, whether or not that would qualify for this relief as well.

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Patrick Myers: However, the relief does not apply to in-person services, medical equipment, or drugs provided alongside those telehealth services.

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Patrick Myers: unless they would otherwise be considered telehealth services. I think that means, basically, if it was on that list of telehealth services payable by Medicare, or they meet that criteria that's in the guidance.

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Patrick Myers: Then it may be considered, subject to this, relief.

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Patrick Myers: And then briefly, the OBBBA redefined qualified HDHP to include bronze and catastrophic exchange plans.

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Patrick Myers: Even if those plans don't meet the usual deductible or out-of-pocket limits.

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Patrick Myers: So that a person enrolled in these plans can be eligible to make or receive contributions to an HSA.

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Patrick Myers: Now, the guidance that I mentioned earlier that the IRS had published late last year clarifies that this change applies to plans that are bought with an employer-sponsored ICRA, or those

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Patrick Myers: those individual HRAs that can be used to pay for individual plans.

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Patrick Myers: As well as plans that are purchased off exchange. That is, you know, plans that are offered in exchange… that are not offered through the marketplace, through the federal-sponsored or state-sponsored marketplaces, but may be offered in other ways.

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Patrick Myers: But, as long as they meet the criteria for the bronze and catastrophic plans, then they would meet this relief.

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Patrick Myers: Now, the statute also permits direct primary care arrangements, or DPCAs.

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Patrick Myers: That, charge monthly fees up to $150 per individual, or $300 per family to qualify for HSA eligibility.

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Patrick Myers: they get a… the guidance that the IRS produced recently gets into a little bit more of the weeds here to get more specific about what kinds of DPCAs are acceptable here.

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Patrick Myers: For instance, the compensation for DPCA services in these arrangements must be made through a fixed periodic fee. Now, they can be billed for periods of up to 1 year, as long as the total fees are fixed, periodic, and do not exceed the monthly limit when averaged annually.

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Patrick Myers: And it should be noted that the DPCA arrangement will not qualify if it provides specific healthcare items and services to individuals on the condition that they are members and have paid the fixed periodic fee.

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Patrick Myers: but then billed separately for those items and services, whether through insurance or some other method. So, in other words, if you were involved or enrolled in a DPCA and you paid your fixed periodic fee.

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Patrick Myers: And then the arrangement charges you separately for additional services. Those additional services will not qualify for reimbursement through an HSA.

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Patrick Myers: That said, providers are allowed to offer and bill separately for services that fall outside of that qualifying DPCA arrangement.

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Patrick Myers: It's just a matter of whether or not it's going to be considered part of the DPC arrangement or something outside of it completely.

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Patrick Myers: I imagine that there will be some confusion there in the future, but hopefully we'll get some more guides that will dig into this a little more.

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Patrick Myers: So, to be eligible for HSA reimbursement, a DPCA must provide only primary care services by qualified primary care practitioners.

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Patrick Myers: Require payment as a fixed regular fee.

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Patrick Myers: And the relief excludes certain disallowed services or items that include things like procedures that require the use of general anesthesia, prescription drugs other than vaccines, and laboratory services not typically administered in an ambulatory primary care setting.

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Patrick Myers: Now, there's no set limit on the DPCA fee for HSA reimbursements.

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Patrick Myers: However, if that fee exceeds the monthly threshold for HSA eligibility, the individual cannot contribute to their HSA during the months where that threshold is exceeded. That becomes impermissible coverage at that point.

00:26:58.680 - 00:27:06.760
Patrick Myers: Now, the guidance clarifies that HSA funds can be used for these expenses, but only when paying out-of-pocket fees.

00:27:07.010 - 00:27:15.879
Patrick Myers: And, again, HSAs cannot reimburse fees already paid by an employer, including those paid via cafeteria plan salary reductions.

00:27:16.010 - 00:27:29.320
Patrick Myers: So, that's kind of fairly standard for this sort of tax-advantaged reimbursement plans, that you can't basically double-dip using an HSA, and particularly within this DPCA context.

00:27:30.100 - 00:27:36.139
Patrick Myers: So, those are the three main areas that the, recent OBBA

00:27:36.300 - 00:27:40.120
Patrick Myers: made a change to HSAs.

00:27:40.460 - 00:27:55.239
Patrick Myers: But what it didn't change, though there were several things that were floating around out there as the bill was making its way through Congress, that may have gotten some media attention, but so we wanted to take a moment to emphasize the things that didn't make the cut.

00:27:55.330 - 00:28:03.609
Patrick Myers: So, there were some proposed changes that didn't make it past reconciliation. This includes increases to the contribution limits for HSAs.

00:28:04.230 - 00:28:12.890
Patrick Myers: HRA FSA roller options, that is, the ability to roll over funds from HSA… or HRAs and FSAs into HSAs.

00:28:13.690 - 00:28:15.580
Patrick Myers: That didn't make the cut either.

00:28:16.340 - 00:28:24.870
Patrick Myers: fitness costs or gym memberships, were floated as possible qualified medical expenses that could be reimbursed through HSAs. That did not make the cut.

00:28:25.920 - 00:28:44.570
Patrick Myers: spouse FSAs were briefly, floated as to be basically no longer considered to be impermissible coverage, and unfortunately, they didn't make the cut either. Medicare Part A also did not make the cut, so it is still considered impermissible coverage.

00:28:44.930 - 00:28:57.419
Patrick Myers: And again, on-site employee medical clinics were also floated as possibly to be exceptions to that impermissible coverage restriction, but unfortunately, it is still considered impermissible coverage.

00:28:57.930 - 00:29:07.920
Patrick Myers: So, these things may have been floating around, but just wanted to make sure that you were aware that they didn't actually make it through the process and were not included in the OBBBA

00:29:08.240 - 00:29:10.099
Patrick Myers: changes to the HSAs.

00:29:11.450 - 00:29:19.549
Patrick Myers: So, with those changes out of the way, I'm going to hand this back to Kelly so she can talk to you about some common scenarios and issues.

00:29:20.050 - 00:29:37.009
Kelly Eckman: Alright, thanks, Patrick. Yeah, we wanted to take just some time this afternoon to kind of talk through situations that… and questions that we get quite a lot. We field a lot of questions about HSA, so I wanted to kind of pull out some that I think will be helpful to those in attendance.

00:29:39.300 - 00:29:51.410
Kelly Eckman: Okay, so we talked about the contribution rules when I was going through HSA Basics, so sometimes it's nice to kind of look at this, you know, little more real-world scenario.

00:29:51.540 - 00:30:04.140
Kelly Eckman: So, this time, again, we're looking at the monthly contribution rule. So, number one here, if an employee is enrolled in a qualified high deductible and covers their, themself plus a spouse.

00:30:04.250 - 00:30:21.560
Kelly Eckman: If the spouse turns 65 in July and enrolls in Medicare, but they also remain on the group health plan, so they have coverage from both the group health plan and Medicare. The employee is not enrolled in Medicare. So what does that mean for their contributions?

00:30:21.670 - 00:30:39.339
Kelly Eckman: So, the employee is enrolled in family coverage for all 12 months, because that spouse stayed on the group plan in addition to Medicare. So that means the employee, as the account holder can make the entire family max contribution if desired.

00:30:40.360 - 00:30:43.740
Kelly Eckman: Because really, when we're looking at eligibility, it's…

00:30:44.130 - 00:31:00.829
Kelly Eckman: is the account holder enrolled in impermissible coverage? We don't care if somebody else on the plan is enrolled in impermissible coverage, we just care about the account holder in this instance. And so, since the employee covered themselves plus a spouse, they're at the family level.

00:31:01.380 - 00:31:07.010
Kelly Eckman: If the employee is 55 or older, they can also contribute that $1,000 catch-up.

00:31:07.100 - 00:31:18.490
Kelly Eckman: And then the spouse, again, if the spouse had their own separate HSA, they also could have been making the thousand… or, well, the catch-up contributions, because they're over 55.

00:31:18.500 - 00:31:30.130
Kelly Eckman: But, because the spouse enrolled in Medicare as of July, and then thus that became impermissible coverage, the spouse is only eligible for 6 twelfths

00:31:30.170 - 00:31:42.250
Kelly Eckman: of that catch-up. And that's because they were, you know, eligible for half of the year, and then impermissible coverage for the other half. Again, has to be in their own separate account, though. Our second scenario on here

00:31:42.410 - 00:31:48.090
Kelly Eckman: We have the same facts here, but when the spouse enrolls in Medicare.

00:31:48.190 - 00:31:57.490
Kelly Eckman: they drop the group health coverage at that time. And so, when that happens in July, the employee moves to self-only coverage.

00:31:57.550 - 00:32:16.330
Kelly Eckman: And again, the employee's not enrolled in Medicare. So, what do their HSA contributions look like? In this case, the employee's enrolled in family coverage for 6 months, January through June, and then single coverage, or employee-only coverage, for the remaining 6 months, once the spouse enrolled in Medicare.

00:32:16.350 - 00:32:25.179
Kelly Eckman: So their annual max is going to be based on 6 twelfths of the family max, and then 6 twelfths of the single max.

00:32:25.260 - 00:32:35.330
Kelly Eckman: And again, as we said before, if the employee's 55 or older, they have that $1,000 catch-up, and then the spouse could have contributed 6 twelfths

00:32:35.700 - 00:32:51.190
Kelly Eckman: of the catch-up into their own account. So we've always got to look at it, again, assuming they're not doing that full contribution rule, we have to look at it on a month-by-month basis to determine what someone's annual max is going to be.

00:32:52.040 - 00:32:53.880
Kelly Eckman: Alright, next scenario, please.

00:32:54.110 - 00:33:03.890
Kelly Eckman: Okay, so this next one, I alluded to this earlier, back in the basics. So, we're talking about the interaction between FSAs and HSAs.

00:33:04.010 - 00:33:20.429
Kelly Eckman: So, our question here. If an employee is enrolled in a general-purpose FSA in year one, so I'm going to pretend that this was 2025, let's say, and then for 2026, I'm now enrolled in a qualified high-deductible plan.

00:33:20.600 - 00:33:26.179
Kelly Eckman: Can I make contributions to my HSA on January 1st?

00:33:26.380 - 00:33:39.330
Kelly Eckman: Now, the caveat here is what happens if my plan has a grace period? Or what happens if my FSA had a carryover? So we're going to talk through each of those scenarios here.

00:33:39.880 - 00:33:53.680
Kelly Eckman: In both cases, they will impact HSA eligibility in many cases. So we'll start with the grace period. So what is a grace period? So that's a period of time which can be up to two and a half months.

00:33:53.870 - 00:34:02.759
Kelly Eckman: after the plan year ends, when participants can still incur new claims for reimbursement from the prior year's FSA.

00:34:02.920 - 00:34:10.920
Kelly Eckman: So, I had my 2025 election, and if we have a grace period, that actually means, let's say I had two and a half months.

00:34:11.389 - 00:34:17.229
Kelly Eckman: I can actually, still incur new claims through mid-March.

00:34:17.400 - 00:34:21.109
Kelly Eckman: And they would apply to that 2025 election.

00:34:21.989 - 00:34:31.119
Kelly Eckman: So, that could be good for someone that has leftover FSA money, but because I'm now interested in making HSA contributions instead.

00:34:31.210 - 00:34:42.330
Kelly Eckman: it's gonna cause some issues. So, if a participant has an FSA balance as of the last day of the plan year, so, in this scenario, on 12-31 of 2025,

00:34:42.659 - 00:34:59.249
Kelly Eckman: and we have a grace period, that means I cannot make HSA contributions until the first day of the month following the end of that grace period. So if my grace period went through mid-March, that means the earliest I would be HSA eligible is April 1st.

00:34:59.950 - 00:35:14.969
Kelly Eckman: Now, participants that have a $0 balance on the last day of the plan year, so on 12-31, I'd already spent all my money, I have a $0 balance, then I would be eligible, or HSA eligible, on day one, so on January 1st.

00:35:15.070 - 00:35:27.679
Kelly Eckman: So the issue is only if you have a balance that then is subject to these grace period rules. Now, can I just forfeit the money? Say, hey, I've got $100 left, but I would rather

00:35:27.680 - 00:35:37.249
Kelly Eckman: have an HSA instead? So the answer is no. A participant cannot forfeit the balance in order to get to that $0 sum at the end of the year.

00:35:37.340 - 00:35:48.430
Kelly Eckman: Now, plans can be designed in a way that would allow a year-end balance to convert to a limited-purpose FSA, and then that would allow HSA eligibility.

00:35:48.460 - 00:36:03.219
Kelly Eckman: on day one. So it's definitely something to think of if you have a grace period, and you also offer a high deductible plan with an HSA, you may want to look at how your plan is designed so that it makes it easier for someone to switch

00:36:03.330 - 00:36:19.019
Kelly Eckman: from a non-high deductible plan to a high deductible. Now, what if we have a carryover? So again, a carryover, sometimes we call it a rollover. This allows someone to carry over up to 20% of their FSA election into the next year.

00:36:19.430 - 00:36:26.419
Kelly Eckman: Now, unlike the grace period, where it's a limited time, this amount would be available for the entire plan year.

00:36:26.760 - 00:36:36.119
Kelly Eckman: So that means, if I have a carryover amount, I'm ineligible for an HSA the entire plan year. So even if I didn't elect.

00:36:36.370 - 00:36:43.630
Kelly Eckman: a new FSA amount for 2026, if I am carrying over a 2025 amount into 2026,

00:36:43.740 - 00:36:52.469
Kelly Eckman: I am not HSA eligible this entire year. So, obviously, that's not good for someone who, was wanting to make that HSA contribution.

00:36:52.640 - 00:36:55.179
Kelly Eckman: Now, again, we have some choices with plan design.

00:36:55.280 - 00:37:08.540
Kelly Eckman: Plans can be designed that would allow an employee to waive the carryover balance before the new plan year begins. So I have that $100 left over, I can waive that balance in order to be HSA eligible.

00:37:08.840 - 00:37:28.669
Kelly Eckman: Or, the plan can be designed to allow that year-end amount to convert to a limited-purpose FSA. So there are definitely options with both the carryover and the grace period. It's just important that you are working through those before the end of the plan year, so that you can make sure you're making it as easy as possible.

00:37:28.670 - 00:37:30.720
Kelly Eckman: For your employees who might be…

00:37:30.720 - 00:37:36.300
Kelly Eckman: you know, wanting to switch from a non-HDHP to an HSA-eligible HDHP.

00:37:37.390 - 00:37:38.299
Kelly Eckman: Alright, next one.

00:37:38.300 - 00:37:45.599
Patrick Myers: Let's move on to the next… to the next slide, Kelly. Could you describe a little bit more about how limited purpose FSA works with this… in this context?

00:37:46.070 - 00:38:06.029
Kelly Eckman: Yeah, I mean, so the limited purpose FSA, so that's going to be used for dental and vision expenses only. And so I think we talked about it in the basics section, that because it is only for dental and vision and not medical, it is not considered impermissible coverage, like what we see for the,

00:38:06.810 - 00:38:22.780
Kelly Eckman: for the, you know, full FSA, for the general purpose FSA, and that's why allowing these plans to convert that balance makes it so the person doesn't lose the money, they're just limited to dental or vision in order to preserve that HSA eligibility.

00:38:26.960 - 00:38:32.289
Kelly Eckman: Okay, the next one, spousal coverage. How can that sometimes impact

00:38:32.370 - 00:38:47.670
Kelly Eckman: our HSA eligibility. So, the question here. If the employee's spouse is enrolled at an HRA, or in an HRA at their own employer, and the HRA can reimburse both my spouse's expenses

00:38:51.550 - 00:39:01.270
Kelly Eckman: Is that gonna impact my ability to make contributions to my HSA? Even if I say, I'm never gonna use the HRA, I just want my HSA.

00:39:01.860 - 00:39:13.200
Kelly Eckman: So… If the HRA can reimburse her expenses, it is considered impermissible coverage for HSA eligibility. Even if

00:39:13.900 - 00:39:21.540
Kelly Eckman: The person here never submits an expense to the spouse's HRA. It's the fact that those expenses

00:39:21.800 - 00:39:26.829
Kelly Eckman: could be reimbursed by that plan. That's what makes it impermissible.

00:39:27.040 - 00:39:28.100
Kelly Eckman: Coverage.

00:39:28.930 - 00:39:32.350
Kelly Eckman: And we see this come up a lot, because…

00:39:32.510 - 00:39:43.679
Kelly Eckman: you know, someone thinks, oh, well, I'm just not going to submit my expenses to my spouse's HRA. But the fact that they could be reimbursed, that's the issue. Now.

00:39:43.680 - 00:39:54.550
Kelly Eckman: If the HRA is limited only to that spouse's expenses, so the person who actually works for that other company, they're enrolled in a health plan that has the HRA,

00:39:54.670 - 00:40:00.490
Kelly Eckman: If the expenses are only limited to that person, then it's not impermissible coverage.

00:40:00.700 - 00:40:20.279
Kelly Eckman: So, it can be really confusing for employees if they don't, you know, understand the rules as much, because they may, you know, think they're going to be able to enroll in the HSA, but then they find out they were actually ineligible because their spouse had an HRA that covered them. So, you know, if a

00:40:21.070 - 00:40:28.799
Kelly Eckman: if a spouse has an HRA, hopefully employees are aware that there could be some HSA compatibility issues there.

00:40:29.670 - 00:40:37.419
Patrick Myers: That's why it's really important to communicate with employees what the limits are to, and how these benefits interact with each other.

00:40:37.420 - 00:40:38.600
Kelly Eckman: Exactly.

00:40:41.900 - 00:40:48.259
Kelly Eckman: Okay, so this next one. I will warn you guys, this one might get a little confusing, but I hope you stick with me.

00:40:48.430 - 00:41:01.019
Kelly Eckman: So the next one here, and we field this question quite a bit, is related to, you know, the opening of an HSA account, and what happens if the employee doesn't do it or doesn't do it on a timely basis.

00:41:01.600 - 00:41:08.189
Kelly Eckman: So… Part 1 here, what happens if an employee never opens an HSA account?

00:41:08.430 - 00:41:11.980
Kelly Eckman: Or they never provide the information to the employer.

00:41:12.210 - 00:41:24.390
Kelly Eckman: So, I know this isn't going to be everyone's favorite answer. We don't have direct guidance on how to handle this situation, and so that always makes it a little difficult to answer this question, but there are some things…

00:41:24.390 - 00:41:32.390
Kelly Eckman: to think about if you do offer an HSA, and you've had situations where your employees,

00:41:32.580 - 00:41:34.649
Kelly Eckman: don't open an HSA.

00:41:35.030 - 00:41:45.759
Kelly Eckman: So, the first thing we tell employers to do is check your cafeteria plane document. Sometimes you'll think of this as your Section 125 plane document. See if it says anything about…

00:41:45.950 - 00:41:49.929
Kelly Eckman: You know, account opening, or, you know.

00:41:50.090 - 00:41:52.519
Kelly Eckman: How to handle the situation if…

00:41:52.670 - 00:42:00.600
Kelly Eckman: someone doesn't open their HSA in a timely manner. It may not have anything, but it's always good to kind of check that out.

00:42:01.460 - 00:42:16.340
Kelly Eckman: Employers have what we call a fiduciary responsibility regarding the employee's contributions, so if that employee elected to have money come out of their payroll, for the purpose of it going into their HSA,

234
00:42:16.670 - 00:42:22.230
Kelly Eckman: Employers have rules they have to follow, and they can't just hold on to these funds indefinitely.

00:42:22.440 - 00:42:37.260
Kelly Eckman: And that's because they're considered plan assets, and so we actually have federal rules around how to treat those plan assets. And interestingly, it could actually be seen as the employer profiting from the plan.

00:42:37.420 - 00:42:55.089
Kelly Eckman: If you just hold onto those funds. And I know that sounds a little strange, because in a situation like this, it's like, well, you, the employer, took the funds from payroll like you should, and the problem is just that the employee didn't open their account. But technically, it can be seen as if you are profiting

00:42:55.090 - 00:43:07.200
Kelly Eckman: Because that money is just sitting in your account instead of being forwarded to the HSA like it should have been. So, what happens then? You know, the account's not open, what should we do?

00:43:07.350 - 00:43:26.319
Kelly Eckman: A best practice here is potentially to refund those amounts back to the employee, and it would be as taxable income, because we're not getting that pre-tax benefit now, because it didn't go to the HSA, and then stop any future deductions until that employee actually opens the account.

00:43:27.100 - 00:43:33.729
Kelly Eckman: Now, we always recommend working closely, if you have a specific HSA vendor that you use.

00:43:33.850 - 00:43:50.599
Kelly Eckman: And if not, then your tax advisor. Because again, we can't give tax advice or legal advice here, but you need to understand that if you have employees that have contributions coming out, you can't just sit on that money, you know, for months and months, even if they haven't opened it.

00:43:50.830 - 00:44:01.780
Kelly Eckman: Now, Part 2. What happens to employer-provided amounts? Again, we talked about how you have discretion on if you want to contribute to the HSA of your employees.

00:44:01.950 - 00:44:06.969
Kelly Eckman: So these are going to depend on the terms of your own employer policy.

00:44:07.250 - 00:44:17.679
Kelly Eckman: So, sometimes employers will have language in their policy that says, you know, okay, we're gonna give you $1,000, and it's gonna be, you know, $250 quarterly.

00:44:17.910 - 00:44:33.910
Kelly Eckman: But, they're only provided if you, the employee, have provided us the account information for an active HSA account, and we have that information on the date that the distribution is made. So if we say we're going to contribute

00:44:34.310 - 00:44:40.750
Kelly Eckman: You know, on the first day of each quarter, and in order to get those funds, you must have an active account.

00:44:41.200 - 00:44:45.630
Kelly Eckman: And you must have provided us that information. That's one way that employers handle it.

247
00:44:46.210 - 00:44:55.979
Kelly Eckman: So then if the account, you know, isn't open on that date, you know, they may be able to say, well, it wasn't open on that date, you're not getting this portion of the funds.

00:44:56.400 - 00:45:09.019
Kelly Eckman: Because without a policy, it's a lot harder for an employer to deny those funds to an employee. So, if you say we're gonna make quarterly distributions on the first day of the quarter.

00:45:09.290 - 00:45:27.109
Kelly Eckman: But you don't have a written policy saying that the employee needed to give you that information. If I come to you on February 1st and say, hey, I never got that money from January, I just opened my account today, it's a lot harder to say, well, you didn't have it open on that day, so we're not providing it.

00:45:27.150 - 00:45:30.049
Kelly Eckman: Again, employers also want to have…

00:45:30.240 - 00:45:37.280
Kelly Eckman: their policy around, you know, prorated contributions. So again, how do we handle new hires? Do they get the full amount?

00:45:37.310 - 00:45:56.120
Kelly Eckman: Or do they get a prorated amount? Or mid-year enrollees, maybe they've been your employee the whole year, but they were in their… on their spouse's plan until September. How will theirs be handled? So anything an employer can do to document their policy, it makes your life a lot easier surrounding these contributions.

00:45:57.220 - 00:45:58.580
Kelly Eckman: Alright, next one, please.

00:45:59.450 - 00:46:02.170
Kelly Eckman: Okay, confusing expenses.

00:46:02.470 - 00:46:06.240
Kelly Eckman: As we said, there's no comprehensive list of

00:46:06.300 - 00:46:25.700
Kelly Eckman: Eligible HSA expenses. Employer, or employers, sorry, account holders have to, you know, do their due diligence here. So the question here, can you use your HSA to pay for any expenses if they are listed as HSA or FSA eligible on a website, or, you know, you walk into…

00:46:25.710 - 00:46:30.069
Kelly Eckman: The pharmacy, and there's a big sign that says HSA Eligible Expenses.

00:46:30.330 - 00:46:39.700
Kelly Eckman: Or, does the answer change if there is a prescription, or something called a letter of medical necessity, or an LMN? Is that going to change the answer?

00:46:40.000 - 00:46:40.830
Kelly Eckman: Soap!

00:46:41.250 - 00:46:49.399
Kelly Eckman: Just because a website or a store says an item is HSA or FSA eligible does not actually mean it is.

00:46:49.740 - 00:47:07.299
Kelly Eckman: The account holder still has the, requirement to do their own due diligence, because at the end of the day, it is their individual tax account, and if the IRS comes knocking, they're the ones that have to defend using the HSA or FSA for that expense.

00:47:08.620 - 00:47:23.890
Kelly Eckman: stores and different vendors are, I will say, getting loose with what they're calling qualified medical expenses. I think we're seeing more and more, you know, you can go to Amazon and filter by HSA or FSA-eligible expenses.

00:47:24.030 - 00:47:30.770
Kelly Eckman: Whether everything listed there is actually a qualified medical expense, maybe it's up to interpretation.

00:47:30.940 - 00:47:37.240
Kelly Eckman: We're also seeing more and more companies, kind of like wellness-type companies.

00:47:37.400 - 00:47:48.260
Kelly Eckman: That are saying they'll give you a letter of medical necessity or a prescription to justify an expense that maybe normally wouldn't be considered a qualified medical expense.

00:47:48.410 - 00:47:52.229
Kelly Eckman: Again, some of these gray area expenses.

00:47:52.620 - 00:48:12.400
Kelly Eckman: And so, some of these are called dual-purpose expenses, and so they require greater scrutiny. And so, something we think of as the but-for test. So, would the expense have been occurred without that medical condition? So, if I want to use my HSA for a gym membership, which Patrick told us, the OBBBA thought about adding it, but they didn't.

00:48:12.400 - 00:48:17.290
Kelly Eckman: You know, would I have incurred that expense but for this medical condition.

00:48:17.290 - 00:48:27.840
Kelly Eckman: that, you know, I have and that I've worked with my doctor. Or a massage, could there be a medical reason why I need a massage, or is it just general, you know, feel-good?

00:48:28.000 - 00:48:45.230
Kelly Eckman: The expense should be directly related to the medical condition. I think that's kind of the biggest part here. We actually had a memo from the IRS back in 2024, and it was kind of warning that self-reported health information is less reliable

00:48:45.700 - 00:49:00.170
Kelly Eckman: Then, you know, if a doctor is doing an exam, because no one's independently checking it. So if a website is saying, oh, you know, self-report this information, and we'll have a doctor review it and give you a letter of medical necessity or a prescription.

00:49:00.370 - 00:49:07.159
Kelly Eckman: It's not as reliable, because I can go in there and tell that website anything if I know it's going to get that expense

00:49:07.660 - 00:49:12.980
Kelly Eckman: To be approved, as they'll call it, on their end for the HSA.

00:49:13.450 - 00:49:31.570
Kelly Eckman: So definitely have to be wary. I've also seen, when I was doing some research, you know, some websites that are advertising these letters of medical necessity, they say, well, go ahead and pay with your regular credit card now, and then if you get the letter from us, just reimburse yourself. Which is fine!

00:49:31.770 - 00:49:45.039
Kelly Eckman: But, it kind of puts consumers in a bad spot, because they've gone and made this expensive purchase, and then if it's denied, they're kind of out of luck. So I put some examples here that we've seen. So, again, lots of food and wellness items.

00:49:45.040 - 00:49:55.240
Kelly Eckman: Hydration supplements, protein bars, foods, those are often not going to be, qualified medical expenses, although you see websites advertise them.

00:49:55.730 - 00:50:08.470
Kelly Eckman: fitness gear, you know, weightlifting sets, watches, again, that kind of stuff. And then the last one on here, my personal favorite, which we have seen, the Litter Robot. So a self-cleaning litter box.

00:50:08.580 - 00:50:14.830
Kelly Eckman: They actually advertise, you know, an easy way to get a letter of medical necessity.

00:50:14.880 - 00:50:23.349
Kelly Eckman: For all sorts of conditions. Maybe you're pregnant, you have back pain, you have allergies, or, again, viral communicable diseases.

00:50:23.400 - 00:50:41.890
Kelly Eckman: So you have the cold or a flu, Litter Robot says you might get a letter or a medical necessity to use your HSA or FSA to buy that. So, consumers need to be important. Again, this is, you know, less of an employer issue, because you are not making that determination, but I think it's important to understand that

00:50:42.010 - 00:50:55.459
Kelly Eckman: consumers and your employees are really getting hit hard with some of these websites promoting ways to use the HSA. So anything you can do to really hone in on, you know, qualified medical expenses, I think, is important.

00:50:56.570 - 00:50:58.349
Kelly Eckman: Alright, next one, please.

00:50:58.680 - 00:51:18.069
Kelly Eckman: Okay, so then, this one, what happens if I cover my adult dependent, my adult child? So, if I cover my adult child, a 24-year-old as an example, who is not considered my tax dependent, so they live on their own, maybe they're even married, but they're still on my health plan.

00:51:18.070 - 00:51:22.580
Kelly Eckman: Is that going to impact my HSA contribution requirements?

00:51:23.180 - 00:51:30.590
Kelly Eckman: And so, the answer here is that, the maximum contribution, it's gonna be based on the tier in which I'm enrolled.

00:51:30.850 - 00:51:43.559
Kelly Eckman: And that, again, so if I cover myself plus my family member, even if that family member's not a tax dependent, it doesn't matter, I can still contribute up to the IRS family maximum for the year.

00:51:44.450 - 00:51:50.550
Kelly Eckman: Now, here's where it gets interesting. My adult child, so my 24-year-old child who lives on their own.

00:51:50.700 - 00:51:57.420
Kelly Eckman: Because they're on my… Qualified High Deductible plan, they can also

00:51:57.580 - 00:52:07.220
Kelly Eckman: open and establish their own HSA account, assuming they are otherwise eligible, and contribute that same IRS family maximum for the year.

00:52:07.550 - 00:52:17.760
Kelly Eckman: So, kind of interesting that, in this case, both parties, because there's a difference in tax dependency, they can open their own HSA if desired.

00:52:17.870 - 00:52:24.220
Kelly Eckman: And the same rule applies, let's say I cover my domestic partner, or a child of a domestic partner.

00:52:24.420 - 00:52:29.899
Kelly Eckman: Again, those are generally not going to be your tax dependent, so that same rule is going to apply.

00:52:30.410 - 00:52:37.860
Kelly Eckman: That both parties can potentially open and contribute to their own HSI here.

00:52:37.990 - 00:52:51.809
Kelly Eckman: And then the final reminder, and I think we talked about this earlier too, is you cannot use HSA funds to pay for the expenses of a non-tax dependent. So again, just because having my adult child on my plan lets me contribute

00:52:51.890 - 00:53:07.600
Kelly Eckman: a larger amount to my HSA, I can't use those funds on that adult dependent because, they're not my tax dependent. So just some things to think about, when it comes to, you know, having older children on the plan.

00:53:08.540 - 00:53:11.059
Kelly Eckman: And I think with that, it's back to you, Patrick.

00:53:12.530 - 00:53:22.059
Patrick Myers: Thank you, Kelly, and thank you, everyone, for attending our presentation today. Here are a few key takeaways we hope you could take with you after we're done today.

00:53:22.970 - 00:53:31.780
Patrick Myers: First, of course, is the idea that HSAs provide important advantages for participants, but they do come with admin…

00:53:31.930 - 00:53:35.650
Patrick Myers: And specific eligibility requirements.

00:53:35.800 - 00:53:51.680
Patrick Myers: Employers need to reasonably determine that an employee is eligible to participate in the HSA. This includes that the employee is enrolled in their HDHP plan and does not possess any other coverage deemed impermissible.

00:53:51.680 - 00:54:02.110
Patrick Myers: And as we pointed out earlier in the presentation, this can often trip people up, especially if the spouse, who may not be participating in the employee plan.

00:54:02.110 - 00:54:06.000
Patrick Myers: And who may be participating in the… may themselves be…

00:54:06.230 - 00:54:18.000
Patrick Myers: have impermissible coverage that may affect the employee's ability to protect an HSA. So, we often see questions where this has happened, an employee has realized that their spouse

00:54:18.050 - 00:54:32.700
Patrick Myers: has an FGSA, and they wanted to contribute to an HSA, and find they can't, because they have impermissible coverage. So, these are the kinds of things that it's important to keep in mind, and it's also equally important that

00:54:32.720 - 00:54:42.330
Patrick Myers: employers communicate with employees about what they can and cannot participate in in order to participate in HSAs.

00:54:42.370 - 00:54:43.730
Patrick Myers: That's really important.

00:54:44.670 - 00:54:50.980
Patrick Myers: And then, account holders are responsible for ensuring that distributions are for qualified medical expenses.

00:54:51.090 - 00:54:58.719
Patrick Myers: As we mentioned earlier, recent legislation expanded the definition to include things like telehealth services and direct primary care.

00:54:59.020 - 00:55:05.420
Patrick Myers: But they didn't include some other kind of popular options, like gym memberships and the like.

00:55:05.570 - 00:55:08.459
Patrick Myers: And then as, again, as Kelly pointed out.

00:55:08.730 - 00:55:16.780
Patrick Myers: you know, even these products and services that are advertised as potential expenses that can be reimbursed under HSAs.

00:55:17.030 - 00:55:33.570
Patrick Myers: should be treated with caution, and that even those letters of medical necessity may not be enough to justify that expense, and it may trip the account holder up come tax time, when they find that they may be

00:55:33.650 - 00:55:41.560
Patrick Myers: paying for things that don't qualify the HSA, and may find themselves at the wrong end of a IRS audit.

00:55:42.530 - 00:55:44.030
Patrick Myers: But in any event.

00:55:44.120 - 00:55:59.799
Patrick Myers: We have some excellent material and resources that cover the things that we talked about today in greater detail, and include more things, such as Section 125 non-discrimination considerations for employer contributions.

00:55:59.800 - 00:56:10.610
Patrick Myers: And the comparability rule for those who make contributions outside of the Section 125 plan, among many other issues that may arise during the administration of a health savings account.

00:56:10.950 - 00:56:18.640
Patrick Myers: And that's available to you. You just ask your NFP contact for those. We're happy to provide you with a copy.

00:56:18.790 - 00:56:30.450
Patrick Myers: And then, in addition to that, our bi-weekly newsletter, or Compliance Corner, is a place where we post guidance and other changes in federal regulation that may affect benefits compliance.

00:56:30.450 - 00:56:45.520
Patrick Myers: We are constantly keeping a weather eye open for those kinds of changes, and we post articles on those changes as soon as we learn of them in our Compliance Corner newsletter, so keep an eye open for those. It's an excellent resource as well.

00:56:46.240 - 00:56:57.330
Patrick Myers: So, with that, we should wrap up and hand this back to Amber. So, thanks, everyone, for attending, and thank you, Kelly, for your help.

00:57:00.690 - 00:57:02.839
Amber Posthauer: All right. Well, thank you!

00:57:13.110 - 00:57:31.419
Amber Posthauer: your valuable time and expertise with us today. To reiterate, today's presentation was recorded. We'll be sharing the recording and the link to the full recording. The PowerPoint slides used during this presentation will be shared in the same email. At the end of this call, a survey will populate in a new window. Please take a brief moment to complete the survey, as it lets us know what topics are important to our listeners, and helps make our education

00:57:31.740 - 00:57:36.809
Amber Posthauer: program as current and relevant as possible. That concludes our webinar. Thank you.