Medical and Non-Medical Lactation Expenses

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.  […]

HSA Establishment Date

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 […]

What Happens to an HSA upon Death

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 […]

How Medicare Affects HSA Eligibility

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 […]

Special HSA Contribution Limit for Spouses

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 […]

Early Termination of COBRA Upon Enrollment in Other Group Health Plan or Medicare

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 […]

Medicare Secondary Payer Employer Size Requirements

Question:  At what size are employers subject to the Medicare Secondary Payer rules? Short Answer: The Medicare Secondary Payer rules generally apply at 20 employees for Medicare entitlement based on age, and 100 employees for Medicare entitlement based on disability. Medicare Secondary Payer Rules: General Rule The Medicare Secondary Payer (MSP) rules prohibit employer-sponsored group […]

COBRA Small Employer Exception

Question:  When does the COBRA small employer exception apply? Short Answer:  The small employer exception from the federal COBRA requirements applies if the employer had fewer than 20 employees on at least 50% of its typical business days in the preceding calendar year. Small Employer Exception: General Rule The federal COBRA continuation coverage rules do […]