Newfront Logo
  • About
    • Who We Are
    • How We Work
    • Leadership
    • Diversity, Equity & Inclusion
    • Community
    • Careers
    • Locations
  • Solutions
    • Employee Benefits
    • Executive Risk Solutions
    • HR Services
    • M&A Advisory
    • Private Client Services
    • Property & Casualty
    • Retirement Services
    • Wholesale Benefits
    Menu
    • Employee Benefits
    • Executive Risk Solutions
    • HR Services
    • M&A Advisory
    • Private Client Services
    • Property & Casualty
    • Retirement Services
    • Wholesale Benefits
    Services
    • Newfront Total Solution
    • Claims Management
    • Contract Review
    • Financial Wellness
    • Global
    • Occupational Health & Safety
      and Workers’ Compensation
    • Surety
    Menu
    • Newfront Total Solution
    • Claims Management
    • Contract Review
    • Financial Wellness
    • Global
    • Occupational Health & Safety
      and Workers’ Compensation
    • Surety
  • Industries
    • Cannabis
    • Clean Technology
    • Construction
    • Entertainment
    • Financial Institutions and Fintech
    • Food and Beverage
    • Healthcare
    • Life Science
    • Maritime
    Menu
    • Cannabis
    • Clean Technology
    • Construction
    • Entertainment
    • Financial Institutions and Fintech
    • Food and Beverage
    • Healthcare
    • Life Science
    • Maritime
    • Nonprofit and Social Enterprise
    • Private Equity and Venture Capital
    • Public Sector
    • Real Estate
    • Real Estate Investment Trust (REIT)
    • Sharing Economy
    • Technology
    Menu
    • Nonprofit and Social Enterprise
    • Private Equity and Venture Capital
    • Public Sector
    • Real Estate
    • Real Estate Investment Trust (REIT)
    • Sharing Economy
    • Technology
  • Insights
    • Events
    • Blog
    • Press
    • Resources
    • COVID-19 Resources
  • Contact
  • Newfront Connect

Contact

Menu
  • About
    • Who We Are
    • How We Work
    • Leadership
    • Diversity, Equity & Inclusion
    • Community
    • Careers
    • Locations
  • Solutions
    • Employee Benefits
    • Executive Risk Solutions
    • HR Services
    • M&A Advisory
    • Private Client Services
    • Property & Casualty
    • Retirement Services
    • Wholesale Benefits
  • Services
    • Newfront Total Solution
    • Claims Management
    • Contract Review
    • Financial Wellness
    • Global
    • Occupational Health & Safety & Workers Compensation
    • Surety
  • Industries
    • Cannabis
    • Clean Technology
    • Construction
    • Entertainment
    • Financial Institutions and Fintech
    • Food and Beverage
    • Healthcare
    • Life Science
    • Maritime
    • Nonprofit and Social Enterprise
    • Private Equity and Venture Capital
    • Public Sector
    • Real Estate
    • Real Estate Investment Trust (REIT)
    • Sharing Economy
    • Technology
  • Insights
    • Events
    • Blog
    • Press
    • Resources
    • COVID-19 Resources
  • Contact
  • Newfront Connect
  • ABD Home
  • Blog

Veterans Day Special: HSA Considerations for Veterans During Open Enrollment

  • November 13, 2018
  • Brian Gilmore
  • Compliance
Share
Share on linkedin
Share on facebook
Share on twitter
Share on email

Many veterans have access to VA health benefits, and many of those veterans are now employees with the option to enroll in a High Deductible Health Plan (HDHP) paired with a Health Savings Account (HSA) during this open enrollment season.

The general rule for HSA eligibility is employees cannot make or receive HSA contributions if they are covered under another medical plan that is not a HDHP. Needless to say, VA coverage does not qualify as a HDHP.

This brings us to a very important question for veteran employees on this Veterans Day:

 How Does a Veteran’s Access to VA Benefits Affect HSA Eligibility?

  • Special Rule: VA Eligibility Not Disqualifying Coverage

The IRS’s special rule for veterans provides that mere eligibility for VA benefits is not disqualifying coverage for purposes of HSA eligibility—despite the fact that VA benefits are not subject to the minimum HDHP deductible. This is a sharp contrast from the general rule that any pre-deductible coverage blocks HSA eligibility.

This special rule prevents nearly the entire veteran population from being blocked from making or receiving HSA contributions because of their ability to access VA services. However, as described below, some veterans who utilize their VA benefits will temporarily lose HSA eligibility.

  • Veterans Who Access VA Benefits: Three-Month Block on HSA Eligibility

Except as described in the section blow, veterans who actually receive medical benefits from the VA do lose HSA eligibility. The IRS rules provide that individuals are not HSA-eligible if they received medical benefits from the VA at any time during the previous three months.

Again, veterans must actually access VA benefits for this three-month block on HSA eligibility to apply. Mere eligibility for VA benefits is not disqualifying coverage.

  • Veterans with Service-Connected Disabilities: Three-Month Rule Does Not Apply

In 2015, Congress passed a new law designed to enhance HSA eligibility for veterans with service-connected disabilities. The modification permits veterans enrolled in a HDHP (with no other disqualifying coverage) and who have a service-connected disability to make or receive HSA contributions regardless of if or when they received VA benefits.

Subsequent guidance from the IRS has confirmed that all VA services provided to a veteran with a service-connected disability are deemed to be provided for the veteran’s service-connected disability. This means that VA benefits will never be disqualifying coverage for veterans with a service-connected disability—even if the VA services are unrelated to the veteran’s service-connected disability.

Bottom Line: Veterans with a service-connected disability are not blocked from HSA eligibility, even if they accessed VA benefits in the prior three months.

Check out my September 27, 2018 ABD Office Hours Webinar Go All the Way with HSA: Everything HDHP/HSA You Need to Know for more details.

Contact Brian Gilmore at brian.gilmore [at] theabdteam.com for more info/questions!

Brian Gilmore

Brian Gilmore

Brian Gilmore is the Lead Benefits Counsel at ABD. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.
The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. ABD shall have no liability for the information provided. While care has been taken to produce this document, ABD does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.
Stay connected.
Anytime, anywhere.
LEARN MORE
Newfront Global Reach
Worldwide Broker Network

500 offices • 100 countries • 6 continents

About
  • Who We Are
  • How We Work
  • Leadership
  • Diversity, Equity & Inclusion
  • Community
  • Careers
  • Locations
Menu
  • Who We Are
  • How We Work
  • Leadership
  • Diversity, Equity & Inclusion
  • Community
  • Careers
  • Locations
Solutions
  • Employee Benefits
  • Executive Risk Solutions
  • HR Services
  • M&A Advisory
  • Private Client Services
  • Property & Casualty
  • Retirement Services
  • Wholesale Benefits
Menu
  • Employee Benefits
  • Executive Risk Solutions
  • HR Services
  • M&A Advisory
  • Private Client Services
  • Property & Casualty
  • Retirement Services
  • Wholesale Benefits
Industries
  • Cannabis
  • Clean Technology
  • Construction
  • Entertainment
  • Financial Institutions and Fintech
  • Food and Beverage
  • Healthcare
  • Life Science
  • Maritime
Menu
  • Cannabis
  • Clean Technology
  • Construction
  • Entertainment
  • Financial Institutions and Fintech
  • Food and Beverage
  • Healthcare
  • Life Science
  • Maritime
 
  • Nonprofit and Social Enterprise
  • Private Equity and Venture Capital
  • Public Sector
  • Real Estate
  • Real Estate Investment Trust (REIT)
  • Sharing Economy
  • Technology
Menu
  • Nonprofit and Social Enterprise
  • Private Equity and Venture Capital
  • Public Sector
  • Real Estate
  • Real Estate Investment Trust (REIT)
  • Sharing Economy
  • Technology
Insights
  • Events
  • Blog
  • Press
  • Resources
  • COVID-19 Resources
Menu
  • Events
  • Blog
  • Press
  • Resources
  • COVID-19 Resources
Contact
  • Contact
  • hello@theabdteam.com
Menu
  • Contact
  • hello@theabdteam.com
Newfront Connect
Facebook-f Twitter Linkedin-in
HQ: 777 Mariners Island Blvd., Suite 250 | San Mateo, CA  94404 | 650-488-8565
© Copyright 2022 Newfront | License #0L76672
Privacy Policy

Newfront is a brand name of ABD Insurance and Financial Services, Inc., which is the surviving company of the January 1, 2022 merger of three insurance agencies: ABD Insurance and Financial Services, Inc., Newfront Insurance Services, LLC and Aviation Marine Insurance Services. ABD Insurance and Financial Services, Inc. is licensed to sell insurance products in all 50 states, the District of Columbia and Puerto Rico, and is authorized in certain of those jurisdictions to use the names of its predecessor companies as DBA names. See this link for a list of licenses held by ABD Insurance and Financial Services, Inc. and the names under which it operates in each jurisdiction.