Do the section 125 change in status rules apply to elections of HSA contributions through a cafeteria plan?
A-58. A cafeteria plan may permit an employee to revoke an election during a period of coverage with respect to a qualified benefit and make a new election for the remaining portion of the period only as provided in Treas. Reg. ยง 1.125-4. Because the eligibility requirements and contribution limits for HSAs are determined on a month-by-month basis, rather than on an annual basis, an employee who elects to make HSA contributions under a cafeteria plan may start or stop the election or increase or decrease the election at any time as long as the change is effective prospectively ( i.e., after the request for the change is received). If an employer places additional restrictions on the election of HSA contributions under a cafeteria plan, the same restrictions must apply to all employees.
Related Questions
- If I make contributions to my HSA through pre-tax payroll deductions (Section 125 cafeteria plan), can I change the per payroll deduction at any time?
- Do the section 125 change in status rules apply to elections of HSA contributions through a cafeteria plan?
- How do the rules under section 419 affect contributions by an employer to an HSA?
