How does a company roll over their HSA and FSA?

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) have different rollover rules. FSA Rollover Rules For FSA plans, companies can allow their employees to roll over up to $500 to the next year. But this is an optional benefit that companies aren’t obligated to provide. The IRS details in the rollover process, but you’ll […]

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2018 HSA contribution limit

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) have different rollover rules.

FSA Rollover Rules

For FSA plans, companies can allow their employees to roll over up to $500 to the next year. But this is an optional benefit that companies aren’t obligated to provide. The IRS details in the rollover process, but you’ll need to contact your plan administrator to amend the current year plan.

HSA Rollover Rules

Many are surprised to learn that all unused dollars in an HSA roll over year to year. Think of an HSA plan as a savings account; funds stay in the account until they are withdrawn or the account is closed. The HSA can earn interest up to a balance of $2,000. Above that level, the account owner is entitled to investment options.

HSA/FSA Conflict

Employees enrolled in an FSA aren’t permitted to contribute to an HSA plan in the same year. There are provisions for handling a situation where an employee needs to move to an HSA. This involves a limited-purpose FSA (LPFSA). Your plan administrator will need to be involved in this change as well.

Helpful Links:

Guidelines on FSA/HSA – IRS

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