HSA Administration: Debit Card Coordinates HRA/Health FSA Expense

Written by Loretta Graham-Giles, Manager of CoreAdmin

Can an Employer include the Premium Only Plan with HSA Module when they order a Health FSA and/or HRA Plan document and allow Employees to fund their HSA with pre-tax dollars?

HSA Coordination with HRA/Health FSA! Few realize that if the Employer is providing an HRA and/or Health FSA benefit, they can also provide a pre-taxed HSA benefit to their employees. If the Employee is funding a Health Savings Account, they can only use their HRA and Health FSA for dental and vision expenses until they meet the minimum HSA deductible set by the IRS. In 2015 this minimum HSA deductible was $1,300 for a single policy and $2,600 for a family policy. Once the Employee has met this deductible, the HRA and Health FSA can be used for any other eligible expenses.

With an HRA and/or Health FSA through Core Documents, these benefits can be coordinated with the HSA benefit on one card through CoreAdmin. If the Employee is funding a Health Savings Account and also has an HRA and/or Health FSA benefit, the HRA and Health FSA will be limited to Dental/Vision expenses until the Employee has met the minimum deductible for their HSA. After the HSA deductible is met, the Employee can use their HRA and/or Health FSA for all eligible expenses. For example, if the patient uses their BennyCard for a dental expense it is automatically drawn from their Limited Health FSA (or Limited HRA). If the patient uses their BennyCard for a prescription expense it is automatically drawn from their HSA (because their Health FSA and HRA are limited to dental/vision expenses).

The Core Documents Health FSA Plan document provides the option for the Limited/Post Deductible Health FSA and gives the Employee information regarding the HSA deductible that must be met before their Health FSA can be used as a General Purpose Health FSA. Now that the annual Health FSA contribution is limited to $2,550 (adjusted annually based on inflation), Employees often have more medical expenses after they have exhausted their Health FSA. Encourage Employees to think ahead, pre-taxing the minimum HSA deductible of $1300/$2600 (individual/family policy deductible minimum for 2015) to fund their HSA and pre-taxing the amount they know they will need for dental and vision expenses from their Health FSA. If you include the Health FSA Carryover option (up to $500) in your Health FSA Plan document the Employee can include a buffer of up to $500 in their Health FSA that will automatically be carried over to the next Plan Year if it is not used, giving them a maximum of $3,050 ($2,550 + $500 based on 2015 maximums) in their Health FSA for the next Plan Year.

When you order an HRA from Core Documents we can help you design a benefit that will coordinate easily with an HSA. You can provide an HRA benefit to Employees funding an HSA that will require them to pay the first $1300/$2600 of deductible expenses (individual/family policy deductible minimum for 2015), making it a Post-Deductible HRA.

Or, you can design an HRA benefit that is limited to dental/vision expenses, and include premiums that are still allowed to be reimbursed through the HRA (premiums for dental insurance, vision insurance, Medicare Supplement Plans, COBRA etc.), making it a Limited HRA.

The Limited and Post-Deductible HRA can also be combined, providing reimbursements for dental/vision/allowable insurance premiums with first dollar reimbursements through the HRA, and providing reimbursements for medical expenses after the Employee has met the first $1300/$2600 of deductible expenses (individual/family policy deductible minimum for 2015).

For just $129 more when you purchase or renew a Health FSA or HRA, you can include the Premium Only Plan with HSA Module.

HSA Administration: Debit Card Coordinates with other benefits

If you have clients that would like to begin allowing their Employees to pre-tax their HSA contributions, and you would like to make them available on the BennyCard through CoreAdmin, when you place your order for the Premium Only Plan with HSA Module, add “Please Provide HSA Admin Set-Up” in the Notes section.

We will then send an HSA Administrative Services Agreement to you with the forms required to set up the Bancorp HSA Employer Account.

Send your questions about HSA Administration and Coordinating your HRA/FSA with your Employee’s HSA benefit to Loretta @ CoreAdmin.info

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