I agree.

“You probably can’t have both an HSA and an FSA

If you qualify for an HSA, you cannot elect to set up both an HSA and an FSA, unless the FSA is a “limited purpose” FSA. Your employer’s HR representative will be able to tell you if this is the case.

A limited purpose FSA works like a regular FSA but can be used only for vision care and dental expenses. If you expect to have high medical costs throughout the year, or want to maximize contributions to your HSA while minimizing your withdrawals, using a limited purpose FSA for expected vision and dental expenses could be a smart choice.”

Nerdwallet dot com

@Tropical_Willie thats the sad part is I am in HR. I was told we don’t offer a limited… I told my boss this and they basically said there’s been confusion and I’m mistaken…

IRS anonymous tip line time. The company is breaking a federal reg and you won’t be able to tell them they are doing it wrong. Only the government doing an audit .

@Tropical_Willie I was thinking of bringing my findings to my boss and play stupid and ask her for clarification to our practices. Or do you think this will only hurt me?

It might hurt once the Feds show-up.

I’d ask who is receiving both but I don’t need to know, but is it executives?

@Tropical_Willie no, just an regular lower level employee. I honestly think there may be more because I see you can elect anything online without having any limited controls and I don’t know if anyone has been reviewing or approving them since the benefit specialist before me left.

Somebody is going to have to explain to the employee why they will not have both, is that going to be you?

@Tropical_Willie lol probably, since I’m the person handling benefits.

@chelle21689 I think I would consider emailing them and start by saying, “I’m still confused about this .” Then cite the passages in the Government doc you are using to back up your facts – and attach the whole doc with perhaps the passages highlighted to the email. You could end by saying, “Could you please clarify this for me?”

Then see how they respond.

@Tropical_Willie: Someone in my family is a CPA and from what I’ve been hearing, when you call the IRS now you are on hold for hours.

I just googled “Can i have both an FSA and an HSA” and I got “no” according to 4 sources. Here’s one: https://www.forbes.com/sites/christinalamontagne/2015/07/13/my-employer-offers-both-hsa-and-fsa-whats-the-difference-and-which-should-i-use/?sh=50e84f4272d0

As you Jellies may know, I love to provide sources so there’s clarification.

Update, I found a document from my predecessor from our benefits broker with FAQs stating that we CANNOT have both FSA and HSA. I’m going to bring this up at our one on one meeting. Score one point for me lol. I hope they don’t hate me for this but it would require a lot of clean up since a lot of employees have been contributing to both!!!

This will either make me look really good or they will hate me haha.

@chelle21689: Wouldn’t it be better to approach the bosses ASAP so that you can start rectifying the issue for people who have been incorrectly paying for both? That seems better than doing a “Gotcha” in a meeting in front of everyone, where the bosses can’t save face.

@jca2 It is a one on one meeting. I just told my boss I have some things I’d like to discuss so she scheduled a time later this afternoon.

Sounds like you found a way to handle it. You have your information so I think even if your boss is reluctant she will take it seriously. I have corrected my accountant more than once regarding what is available to me to lower my taxes. I find it annoying and frustrating professionals can be so ignorant of some very basic rules. How is it possible?

What I was going to ask before you already had a plan is do you have a Director or VP of Total Rewards or of Benefits? That would be the person overseeing the selection of the benefit plans.

The Hr director is in charge of overseeing it all. I report to her with the day to day stuff. M
I agree, almost every HR person I know knows this, it’s simple to me. I feel like it can be hard to do my job with things like these lol.

@chelle21689 You are a gift to this company. Already you are making significant impact. How large is the company? How many employees? You probably know this, but very often HR generalists are clueless about comp and ben. People who specialize in comp and ben usually make a very good salary. If it interests you at all you might consider specializing in it or getting some certifications. My husband’s companies have always paid for him to get the certifications. The negative can be that you start to get pigeonholed if you stay in that specific track for too many years.

@JLeslie that means a lot for me to hear. If you must know it’s a very well known company but I’m afraid to mention the name lol. We have a region though so it’s ran like a mid sized company with about 450 employees.
I wanted to be a generalist actually but when I got this job I was thrilled to no longer be recruiting and interviewing so I think benefits and comp may be my new path.

I haven’t gotten into comp yet but it’s something I’m supposed to be getting into later this year which is why as much as of a headache I have now, I think it’ll look good on my resume.

As much as I was bored at my last job I think they prepared me very well for this.

@chelle21689 If you need any information about the certifications and job tasks let me know. My husband was VP of Total Rewards for years. More recently we owned our own business for a few years, so when he went back to HR in the corporate world he took a title cut, and is Director of Comp (including executive comp) at the company he works for now, but this company is multinational, and it has been years since he worked internationally, so it was good to get that back into his resume.

@JLeslie yes please. It would be good to know if I pursue it! Thanks!!

If I were you, I would keep that resume handy and well up to date. In fact, I think you should probably be distributing it now. Since I’ve been here, I cannot recall a career to match your own at exhibiting the hazards and pitfalls of administrative work. You’re fairly new at this job, but the longer you remain the more you risk being the focal point when the IRS arrives (as it inevitably will). SOMEBODY’s going to be in the hotseat, and you can be assured that your superiors will see to it.

Sounds like whoever wrote the code for the “benefits page” didn’t know or wasn’t giving good instruction.

@chelle21689 I PM’d you.

Lol right. Well, I’ll keep you all posted what happens after 4 pm today if anyone is curious.

I think the important thing here, after getting your facts straight and daring to speak up, is to avoid being confrontational about it. Somehow you have to put yourself and your boss on the same side (because you really are: you work for the same organization and presumably are acting in its interests). If she gets defensive, she may dig in, and then you are going to be the troublesome, pot-stirring new kid.

So first ask yourself what advice you would give if an employee came to HR and asked you how to handle a disagreement with her boss over a company matter.

@Jeruba
So update: I mentioned it to her and the document and she is saying she doesn’t think that’s right or how could have everyone missed it and it would’ve made bigger news because of the impact. She says if I am right, it would’ve been pretty recent changes. Then she kind of blamed it on her being more of a generalist and big picture person lol.

She said for me to ask our benefits broker who makes sure we are within guidelines and helps design our plans so we will see what they say. If the brokerage that specializes in it confirms I am correct, we are going to have to make some major changes.

Sounds good. Let us know what the broker says.

See that generalist comment. That’s why companies pay a lot for people who specialize in Comp and Ben. Lol.

My husband wasn’t sure of the law either, but it made sense to him you can’t do both at once. He hasn’t done benefits in almost ten years.

Worldatwork.org has the Comp and Ben certifications if you are interested at looking at the website.

@jleslie I thought of your comment right when she said that lol

Thanks for the resource.

I woke up thinking about this Q. Are you sure people can choose both an FSA and an HSA and it’s not just that your company offers both? Probably it’s ok they offer both as long as employees can’t select both.

How is it possible that your previous boss AND the benefits broker in particular can be unaware of this?

So the broker responded and said you technically can have both as long as you aren’t contributing to a general FSA and an HSA in the same tax year. Limited FSA and dependent FSA is different, so forget about those two for a moment. Usually people don’t qualify for both though. In one way you can have both is if you have leftover HSA funds you no longer contribute to but it just sits there and the next year you open an FSA. I already knew this but I don’t think my boss does.

It raises another question like how would we even track this? Right now we don’t have a sponsored account. I would have to open up an HSA with my bank and deposit funds into it and later have it tax deductible. There’s no way to trace it. So I’m at a loss, i think it’s the employees responsibility in this case and our best bet is to educate them during each new hire, orientation and open enrollment I guess.

I don’t envy you.

@chelle21689 Now, I don’t think I understand your original concern. So, your company doesn’t pull the money out of an employee’s paycheck for the HSA, but the company does for the FSA? Is that right?

Was your concern people have money in an HSA account while selecting an FSA program? First, I can’t imagine HSA people would later choose an FSA program. FSA is horrible and in my opinion should be eliminated, except maybe in the case of what @Tropical_Willie posted where you maximize an HSA and use an FSA for optical and dental, but I wouldn’t do that unless I know I will have to get new glasses or dental work out of pocket that year. FSA is somewhat of a racket in my opinion.

HSA’s are almost better than IRA’s. A person with any income can sock away money in them tax free. I have thousands of dollars sitting in my HSA. That has nothing to do with what healthcare plan I choose in the future. Once the money is in it’s in.

@JLeslie If i wanted an HSA, I would have to set one up with my bank and have my pay from my employer be deposited to that account. At my old job, they had an employer account with PNC so I didn’t have to sign up with my bank.

My concern is people contributing to both an FSA and HSA accounts which is not within guidelines. I don’t think there is an easy way to catch this but after speaking with the broker it kind of sounds like it would be the employee’s responsibility right? I mean since we won’t know if someone decides to open one externally. At my old job we opened it for them because we had a sponsored account with PNC which I feel like we had more control of reviewing and catching it. So I guess I was more so afraid of me and the company being in trouble when I initially posted this.

I never understood the appeal of an FSA either. It’s a use it or lose it kind of thing too.

Does an FSA require a certain type of health care plan like HSA does? HSA requires a high deductible, but within certain limits as you know, but I can’t remember if FSA has rules like that.

When I had an HSA with BCBS via the ACA I had to deposit the money myself into an HSA account. Usually, people who take advantage of HSA would have a brokerage account somewhere. People can open HSA with fidelity and other similar companies. If they have their IRA’s there anyway it’s more convenient. I keep thinking about moving my HSA over there. I have two separate accounts from two different jobs my husband had.

Does your company actually call them HSA plans and FSA plans?

You don’t need insurance to open up an FSA but you need a high deductible Olán to open an HSA. I think they call the medical insurance the HSA plan but you need to go to your bank to open up an HSA if you want one so we can deposit money there. I don’t think we can know if someone decides to do that so that’s why now I’m thinking the responsibility falls on the employee. At my last job it made it sound like we were responsible because we were really strict but I think cuz we were able to monitor it so closely. So it’s whatever now lol I don’t care anymore. I think I just need to educate them at new hire orientations and open enrollment.

@chelle21689 So, if someone selects a high deductible plan that qualifies for an HSA your company will put the money in an FSA if someone selects that?

They get an amount they can use for the year for whatever elected but for FSA the employee makes those payments back.

@chelle21689 I don’t even understand what that means.

Let’s take an example. I select a high deductible plan eligible for HSA. Will your company let me put money in an FSA when I select that plan?

Yes because it doesn’t mean you have a HSA. At my old job it did cuz you automatically get one lol

So, they just need to make sure people understand they can’t do both like you said. Why would anyone choose an HSA eligible plan and put money in the FSA rather than an HSA? That’s crazy.

Do you know how many people are on an HSA deductible plan and also are contributing to an FSA? I’d be curious to know if it’s 2 people or 200. Not that you should look for me, I just mean if I were you I’d be curious.

@JLeslie Correct. I think people are just uneducated. I looked at our orientation slides for benefits and they don’t really mention the pros and cons. It seems like a lot of people don’t know the benefits.

I would have to pull a report to see that. Maybe I’ll do that Monday and message you if I can. I feel like I’m this company it seems more common than my lady to contribute to an FSA because it seems super easy to apply rather than call the bank. I called my bank to ask about opening an HSA and for some reason it’s been a pain.

@chelle21689 That makes sense that employees opt for the FSA because it’s easier. Actually, just recently I had two friends start to tell me about HSA, as in they were giving me a financial planning tip, and I couldn’t believe they hadn’t been maxing out their HSA for years. These are people who max out everything else to reduce their taxable income. One was still contributing to an FSA. They both play in the stock market, put lots of money away for retirement, but when it came to healthcare since they relied on company plans they never had researched it much I guess.

Did you have an HSA account with your old company? Just add money to that one. Why open a new account? You have the debit card already, it’s all set up.

Remember you can only contribute to HSA for the month you are active in an HSA plan so never prepay into your HSA for the year.