If an employee begins HDHP coverage mid-month, when does the employee become an eligible individual?
Under section 223(b) (2), an eligible individual must have HDHP coverage as of the first day of the month. An individual with employer-provided HDHP coverage on a payroll-by-payroll basis becomes an eligible individual on the first day of the month on or following the first day of the pay period when HDHP coverage begins. Please see your tax advisor if you have questions about whether or not you are qualified to have an HSA.
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