Can an employee participate in the FSA if he declined medical insurance because they are on their spouse’s plan?

According to the IRS , there’s no law prohibiting an employee from participating in a Flexible Spending Account if they’re not on their company’s health insurance plan.

FSA eligibility

As the IRS notes, health FSAs are employer-established benefit plans. As an employer, you may choose to offer this in conjunction with other provided benefits (such as your company’s chosen medical insurance plan) or not. You have the flexibility to offer different combinations of benefits when designing the employee’s plan. Employees who do not choose to enroll in your company’s health insurance (for example, if an employee chooses to be on their spouse’s insurance plan instead) can still sign up for the FSA.

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Using a Flexible Spending Account