November 16, 2017

Top Things to Know When Introducing an HSA to Your Employees

Across the nation, tons of companies are jumping on the HSA and HSA- qualified high-deductible health plan train. But, before you dive in, both employers and employees have questions about how to make it work. Here are some frequently asked questions you might have before rolling out a successful HSA offering.

How do I spread the word about HSA benefits effectively?

Start talking about it early and keep the conversation going. Use tools from your administrator to show off the perks of HSAs, clarify who’s eligible, and understand how claims work. Check out Ameriflex’s Help Center for extra HSA information.

How do new hires sign up for HSAs? Is it prorated?

To max out your HSA contributions for the year, you have to be HSA-eligible by December 1st. But there’s a catch: you have to stay eligible through the next year too. Let’s say you start putting money into your HSA on July 1, 2024, but then switch to a low-deductible plan in November.

That means no full contribution for the year. To dodge a penalty, you have to stay HSA-eligible  until at least December 31 of the following year. It’s all about the “full contribution rule” and the no-proration rule.”

Can I contribute to HSA accounts for some employees and not others?

If HSAs are part of the pre tax-plan, they have to follow cafeteria plans and discrimination testing rules. But if they’re on a post-tax basis (which is rare), no cafeteria plan rules, but watch out for comparability rules. 

Ameriflex’s tip? Kick in the same amount for everyone. Plus our pre-tax HSA plans come with access to our self-service discrimination testing portal, so you’re covered on compliance.

Can my team switch from a medical FSA to a Limited-Purpose FSA?

No, unless there is a true qualifying event or it is open enrollment and the FSA balance is 0. A change in an employee’s health plan is NOT a qualifying event.

How about HSA’s and qualifying events?

HSAs work month-to-month. You can start or stop contributing without needing a qualifying event, as long as you’re not tied up in disqualifying coverage, like an FSA.

What happens if my FSA has a grace period and my team still has funds left? When can they participate in the HSA?

During the FSA grace period, your team can’t chip into an HSA. but once that period ends, they’re good to go for the next month. To dodge this hiccup, tweak your cafeteria plan before the grace period kicks in. Think about switching to a Limited Purpose FSA and Post Deductible Health FSA.

Remember, this tweak applies to all FSA participants in the grace period. And if some aren’t HSA-ready, you can still offer a General Purpose Health FSA for the next year.

Want a more in depth look at HSAs? Learn more about HSAs in our Ultimate Guide. Want to speak to a benefits expert? Contact us today.


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