The NCFlex Benefits Guide (page 7) notes that if an employee is enrolled in the HCFSA, his/her spouse cannot make or receive tax-favored HSA contributions. We would like to add some clarification to this IRS rule.
If you have an employee who has already chosen to participate in the HCFSA for the year OR who has a carry forward account from last year to use for the current year, and their spouse becomes eligible to participate in an HSA, this is not a qualifying life event that allows an employee to cancel their HCFSA.
However, if an employee's spouse was contributing into an HSA prior to the employee's enrollment into an HCFSA (and the employee did not realize they cannot have both), please submit an exception to our team for review.
A Q&A document has been posted in the FSA section of our website which addresses this topic.
If an employee has additional questions about the regulations around participating in these plans, we suggest they contact a tax professional.