Q&A Employer Compliance Guide: HSA Rules, Payroll Deductions, Bronze Plans, and Qualifying Events

12.25.25  |  HSA TAX-FAVORED STATUS

Q.  A group offers a fully-insured medical HDHP and a self-funded dental plan. The medical plan is primary for oral surgery and will apply the deductible to the claim after in-network provider discounting. The dental plan is secondary and will cover half of what’s applied to the member’s deductible. The general rule is that a member on an HDHP can receive coverage from another plan for expenses going toward the health plan’s deductible, provided the member is responsible for the minimum HSA deductible ($1,700 in 2026). Does this rule apply on care that’s covered by both the medical and dental plans?
A. An employee can have an HDHP and dental insurance and still contribute to an HSA. Dental insurance is considered an exception to the rule that generally prohibits any benefits prior to an employee satisfying the HDHP. An employee can receive benefits from a dental plan and that will not impact the ability of the employee to contribute to an HSA if the medical plan is an HDHP.

1.1.26  |  PAYROLL DEDUCTION FOR STATE CONTINUATION COVERAGE

Q.  A small group is offering state continuation coverage to an employee due to a reduction in hours, which made them ineligible for benefits. Since the individual is still an employee, the group would like to continue deducting the employee portion of the premium through payroll, but without any employer contribution. Is this permitted? If so, would the payroll deduction be taken on a pre-tax or post-tax basis?
A. Assuming part-time employees are still eligible to participate in the company’s cafeteria plan, it is possible to pay COBRA premiums on a pre-tax basis when the triggering event is a reduction in hours. The 2007 proposed cafeteria plan regulations make it clear that COBRA premiums are a qualified benefit that can be paid on a pre-tax basis.

1.8.26  |  HSA WITH BRONZE PLANS

Q.  Does the expanded HSA eligibility created by the One Big Beautiful Bill apply to group plans, or just the individual market?
A. The rule that considers a bronze plan to be compatible with an HSA only applies to bronze plans purchased on a state Exchange or Marketplace. This applies to individual coverage only and not group health plans. IRS Notice 2026-5 makes it clear that only individual bronze or catastrophic plans are automatically considered HSA eligible under the new OBBBA rules.

1.15.26  |  DEPENDENT’S MARRIAGE AS A QUALIFYING EVENT

Q.  An employee’s dependent just got married and the employee wants to drop the dependent’s coverage but doesn’t know if she will move to her spouse’s plan. Is the dependent’s marriage a considered a qualifying event for the employee?
A. A dependent’s marriage is not a qualifying life event that would allow the employee (parent) to change her health plan election mid-year. That said, if the dependent is enrolling in her new spouse’s plan, that enrollment would be a qualifying life event. The employee will need proof of the dependent’s enrollment in the new spouse’s plan.

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.