Question: Can employees utilize the dependent care FSA if their spouse works from home or is self-employed? Short Answer: In most cases, employees with a spouse who works from home or is self-employed can still have eligible dependent care FSA expenses as long as the spouse has “earned income”. General Rule: Dependent Care Expenses Must […]
Question: How do the HSA catch-up contribution rules work, and particularly how do they apply for married individuals? Short Answer: If both spouses are HSA eligible and at least age 55, each spouse may make a $1,000 catch-up contribution to their own HSA. Catch-Up Contributions: General Rule Individuals who are HSA eligible and age 55+ […]
Welcome to Compliance Friday Answers to the Service Team (FAST)! Each Friday we publish our response to a question that the ABD Compliance Team received from a client or member of the EB Service Team. These represent the most frequently asked (or interesting) questions we see. We post all of our FAST responses on the […]
Question: Which lactation expenses are eligible medical expenses for reimbursement under a FSA/HRA/HSA? Short Answer: Breast pumps, lactation supplies, and lactation consultant costs are eligible medical expenses that can be reimbursed through a FSA/HRA/HSA. General Rule: Expenses Must Qualify as §213(d) Medical Expenses A health FSA and HRA can reimburse only IRC §213(d) medical expenses. […]
Question: When is an HSA established? Short Answer: The general rule is that an HSA is established when it is first funded, and individuals cannot take a tax-free distribution for medical expenses incurred prior to the HSA establishment date. General HSA Establishment Rule: Ability to Incur Expenses That are Eligible for Tax-Free Medical Distributions […]
In line with the now well-established annual holiday tradition, yesterday the IRS issued Notice 2019-63 extending by 30 days the 2020 deadline to provide the 2019 Forms 1095-B and 1095-C to individuals. The Notice mirrors the same 30-day extensions for the past three years of ACA reporting. The 2020 ACA reporting deadlines for the 2019 […]
Question: What happens to an HSA upon the HSA holder’s death? Short Answer: The HSA will preserve its tax-advantaged HSA status if the beneficiary is a spouse, otherwise the account will lose its tax-advantaged HSA status. General Rule: HSA Designed Beneficiary HSAs permit the HSA holder to designate a beneficiary to receive the account’s funds […]
Question: How does Medicare enrollment affect HSA eligibility? Short Answer: Individuals who enroll in any part of Medicare lose HSA eligibility, which means they cannot make or receive HSA contributions. General Rule: HSA Eligibility The general rule is that an individual must meet two requirements to be HSA-eligible (i.e., to be eligible to make or […]
Question: What is the HSA contribution limit for each spouse where both spouses are HSA eligible? Short Answer: Where at least one spouse is enrolled in family HDHP coverage, the combined HSA contributions for both spouses cannot exceed the annual family limit. General Rule: HSA Eligibility The general rule is that an individual must meet […]
Question: How does enrollment in another employer-sponsored group health plan or Medicare affect a qualified beneficiary’s COBRA rights? Compliance Team Response: Short Answer: COBRA generally terminates early where the qualified beneficiary first becomes covered under another group health plan or Medicare after COBRA is elected. General Rule: COBRA Maximum Coverage Period Absent an early […]
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