Can an employer permit employees to elect an HSA mid-year if offered as a new benefit under the employer’s cafeteria plan?
A-59. Yes, if the election for the HSA is made on a prospective basis. However, the HSA election does not permit a change or revocation of any other coverage under the cafeteria plan unless the change is permitted by Treas. Reg. § 1.125-4. Thus, while an HSA may be offered to and elected by an employee mid-year, the employee may have other coverage under the cafeteria plan that cannot be changed, ( e.g., coverage under a health FSA), which may prevent the employee from being an eligible individual. See Rev. Rul. 2004-45.Q-60. If an employee elects to make contributions to an HSA through the employer’s cafeteria plan, may the employer contribute amounts to an employee’s HSA to cover qualified medical expenses incurred by an employee that exceed the employee’s current HSA balance?A-60. Yes. Where an employee elects to make contributions to an HSA through a cafeteria plan, the employer may, but is not required to, contribute amounts to an employee’s HSA up to the maximum amount elected by
A-59. Yes, if the election for the HSA is made on a prospective basis. However, the HSA election does not permit a change or revocation of any other coverage under the cafeteria plan unless the change is permitted by Treas. Reg. § 1.125-4. Thus, while an HSA may be offered to and elected by an employee mid-year, the employee may have other coverage under the cafeteria plan that cannot be changed, ( e.g., coverage under a health FSA), which may prevent the employee from being an eligible individual. See Rev. Rul. 2004-45. Q-60. If an employee elects to make contributions to an HSA through the employer’s cafeteria plan, may the employer contribute amounts to an employee’s HSA to cover qualified medical expenses incurred by an employee that exceed the employee’s current HSA balance? A-60. Yes. Where an employee elects to make contributions to an HSA through a cafeteria plan, the employer may, but is not required to, contribute amounts to an employee’s HSA up to the maximum amount elected
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