Q.- An employee elected a health FSA effective 1/1 and now during their annual open enrollment for a 7/1 plan, they are considering enrolling in a High-Deductible HSA plan. What should I advise?
A.- An employee who is participating in a health FSA cannot also participate in an HSA (except a limited purpose FSA).
An individual with an FSA is not prohibited from enrolling in a high-deductible health plan, but they cannot participate in an HSA with the HDHP.
The answer might dependent upon how the HDHP health plan works. Can participants choose HDHP coverage without automatically being enrolled in an HSA? If yes, perhaps they will want to do that and not contribute to the HSA until 1/2026 (assuming they don’t have an FSA carryover to next plan year). If the HSA participation is automatic with the HDHP, they would not meet the eligibility requirements since they are participating in a health FSA.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
