Using the FSA with HSA Plans

A Section 125 plan like the CSI Flexible Benefits Plan can be used to pay for premiums on a pre-tax basis for all of CSI’s health plans, including the High Deductible Health Plan used with a Health Savings Account (HSA). The CSI Flexible Benefits Plan may also be used to pay dependent care expenses on a pre-tax basis.
The Health FSA may be used for expenses not reimbursed through another plan. For the High Deductible Health Plan with the HSA component, however, reimbursement is limited to dental and vision expenses. There is a significant change here for participants in the High Deductible Health Plan with an HSA: even if the expense applies to the deductible, unless it is a dental or vision expense, is not eligible for reimbursement from the Health FSA.

You will now see two Health FSA options on the Flexible Benefits Plan Enrollment Form:

  • General-Purpose Health FSA Option (the traditional Health FSA for individuals NOT covered under a High Deductible Health Plan with an HSA). You can be reimbursed for any qualifying health care expense not covered by your health plan.

  • Limited-Purpose Health FSA Option (for individuals who are covered under a high deductible health plan with an HSA). According to federal HSA regulations, you and/or your employer will not be able to make pre-tax contributions to your HSA if you participate in the General-Purpose Health FSA Option. You may, however, participate in a Limited-Purpose Health FSA that reimburses dental and vision expenses only. This allows you to save money in your HSA for other medical expenses and use your Health FSA funds for dental and vision expenses.
    The CSI Flexible Benefits Plan may also be used for pre-tax employee contributions to the Health Savings Account associated with a High Deductible Health Plan. Even if your school is contributing funds to your HSA, you are permitted to contribute additional amounts up to the amount of the deductible using one of these two methods: you may contribute on a pre-tax basis through the CSI Flexible Benefits Plan, or contribute post-tax and claim the credit on your personal income tax.

    Full Issue: No. 50 - May 3, 2005

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