If you're a myFlexplan user, you might have wondered if you can shift funds between your Health Spending Account (HSA) and Wellness Spending Account (WSA) during the year. It's a common question, and we're here to clear things up!
The Short Answer: Unfortunately, No
We know it might be tempting to move funds around as your needs change, but unfortunately, reallocating funds within your myFlexplan isn't possible once you've made your initial allocation. This isn't just our rule – it's a requirement set by the Canada Revenue Agency (CRA).
Why Can't I Reallocate?
The CRA has specific rules about when and how you can allocate funds in flexible benefit plans. These rules are designed to maintain what's called an "Element of Risk" in your plan. But what does that mean?
The "Element of Risk" Explained
The "Element of Risk" is a crucial concept in flexible benefit plans. This risk is what makes your myFlexplan act like a plan of insurance in the eyes of the CRA.
If you could freely move funds between your HSA and WSA throughout the year, you'd essentially be able to eliminate this risk. You could simply shift money to cover any unexpected expenses, which would make your plan function more like a straight reimbursement account rather than an insurance plan.
Are There Any Exceptions?
The CRA does allow for some flexibility in specific circumstances. Paragraph 6 of the bulletin outlines two exceptions:
Life Events: These are significant changes in personal circumstances, such as the birth or death of a dependent, a change in marital status, or loss of insurance coverage under a spouse's employer's plan.
Changes in Employment Status: If your employment status changes (e.g., from part-time to full-time), affecting your flex credit allocation, you may be allowed to adjust your selections.
However, these changes are limited. They're designed to accommodate significant life changes, not to allow for regular reallocation of funds. If these circumstances apply to you, we would need your Plan Admin to reach out to us and confirm that this is the case. The discretion of applying these exceptions is solely up to your employer, we do not make the final call.
Planning is Key
Given these restrictions, it's crucial to carefully consider your allocation when you first set up your myFlexplan. Think about your anticipated health and wellness needs for the year ahead, and allocate your funds accordingly. Here's a guide on how to do that:
Remember, while you can't reallocate funds mid-year, you're still benefiting from the flexibility of choosing how to distribute your funds between HSA and WSA at the start of each plan year. This allows you to tailor your benefits to your changing needs on an annual basis.
Questions?
If you have any questions about your myFlexplan allocation or need guidance on how to best utilize your funds, don't hesitate to reach out to myHSA's support team. We're here to help you make the most of your flexible benefits! You can start a live chat or email support@getmyhsa.com