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I joined my current company in January and chose a Kaiser Permanente health insurance plan with a Health Savings Account (HSA), and chose the maximum contribution of $3,450 per year. The contributions are evenly divided over the year.

Since then, I've had LASIK surgery which cost $5,200; my HSA debit card had not been set up yet, and in any case, the full $3,450 hadn't been contributed yet, so I paid out of my own pocket and am making 'withdrawals' from the HSA account to compensate.

Starting in July, my employer is switching to a new benefits provider, and I'm considering choosing the Anthem PPO 250, which doesn't have an HSA, but instead has an FSA (Flexible Spending Account).

My question is: will I be able to continue 'withdrawing' money from the FSA to pay for the LASIK of the same year?

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    Are any of the plans available in July an. HDHP plan with an HSA? – mhoran_psprep Jun 14 '18 at 3:38
  • Yes, actually some of the new plans available include an HSA! Should I choose that to continue deducting the expenses? – Kurt Peek Jun 14 '18 at 15:13
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Unfortunately, FSA is a substantially different animal than HSA. The issue is that your date of service is before the plan year that would apply to your FSA, presumably 7/1/2018 - 6/30/2019 which puts your lasik procedure outside the eligibility window for a qualified FSA expense.

Additionally, since you'll only have been enrolled in an HSA eligible HDHP for six months your maximum HSA contribution for 2018 is limited to $1,725.

Your only option as far as I can tell, and it would not be advisable at all to do this, would be to waive your employer's coverage and buy yourself an individual HSA eligible HDHP for the remainder of the year; you couldn't take the current HDHP via COBRA because you employer is no longer offering it. This would not be advisable at all for essentially two reasons. First, your employer likely contributes heavily to the cost of your health plan, you'd be foregoing that contribution. Second, your portion of your cost to your health plan are made on a pre-tax basis, you'd be paying the full premium of your individual coverage with no tax benefit. I suspect both your employer contribution and the individual premium are larger numbers than the $1,725 you'd be able to contribute to an HSA by leaving your employer plan for an individual one.

Thinking further, even if you could convince the provider to refund you the unreimbursed amount and begin billing you back after the FSA is in effect, the date of service would still be outside the eligible window.

  • This feels like a very unjust outcome: because my employer is switching benefits provider, I get to deduct less of my health expenses. There should be more continuity of the rules! – Kurt Peek Jun 14 '18 at 15:13
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    Looking at your comment above you can just elect the new HSA eligible HDHP and continue along. – quid Jun 14 '18 at 15:23

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