Compliance Q&A: Spousal Surcharges, FSA Requirements & HSA Deductibles
- February 24, 2025
- Posted by: Gus Altuzarra
- Category: Compliance Q&A
2.6.25 | SPOUSAL SURCHARGE
Q. If a client has a spousal surcharge, would that be considered pre-tax or post-tax?
A. Typically, a spousal surcharge is just treated as an additional premium that employees have to pay for family coverage. This premium would be eligible to be paid pre-tax, just like the other premiums, under the company’s cafeteria plan.
2.13.25 | PREMIUM-ONLY PLAN DOCUMENT FOR FLEXIBLE SPENDING ACCOUNT
Q. If an employer offers only a flexible spending account, is a premium-only plan (POP) document needed?
A. A premium-only document is a type of cafeteria plan under Section 125 of the Internal Revenue Code. It can be used when an employer only offers employees the ability to pay premiums on a pre-tax basis. It cannot be used for a flexible spending account. A POP plan is not appropriate in this case.
A flexible spending account can be offered under a cafeteria plan under Section 125 of the Internal Revenue Code. So, while a POP plan is not needed, the employer will need a cafeteria plan that allows for contributions to the flexible spending accounts.
2.20.25 | AGGREGATE VS. EMBEDDED DEDUCTIBLE FOR AN HSA-COMPLIANT PLAN
Q. Can a plan have an embedded deductible on an HDHP/HSA and still be compliant with IRS regulations?
A. To be eligible to contribute to an HSA, an employee must be covered only by a high deductible health plan (HDHP). An HDHP is a plan with a minimum deductible for employee-only coverage of $1,650 and a deductible of $3,300 for family coverage in 2025.
With family coverage that uses an embedded deductible, the deductible for any family member cannot be lower than $3,300. This makes little sense with an HDHP that uses the lowest possible deductible, because the family deductible will be the same as the embedded individual deductible. It makes more sense for an HDHP that uses a higher deductible, like $6,000 for family coverage. There, you could have an embedded individual deductible of $3,300. In this case, the HDHP could pay out on claims of one family member over $3,300 before the family deductible of $6,000 is satisfied. But this only makes sense when the family deductible of the HDHP is set at something above the minimum $3,300.
Answers to the Question of the Week are provided by Kutak Rock LLP. Kutak Rock provides general compliance guidance through the UBA Compliance Help Desk, which does not constitute legal advice or create an attorney-client relationship. Please consult your legal advisor for specific legal advice.
