Q.- We have an employee who enrolled in the FSA beginning 1/1/ 2014. She just had a baby and is now enrolling in our high deductible health plan. She wants to cancel her FSA and create an HSA instead. Can she do this or does she have to wait until next year to start an HSA?
A.- The answer depends upon the actual terms of the employer's cafeteria plan and what qualified life events/mid-year election changes are recognized by the plan. If an event is recognized by the plan, the change must be consistent with the event. Typically, terminating FSA participation would not be consistent with the birth of a child. You are correct that an employee may not have both a general FSA and an HSA at the same time.