Run: HSA and FSA Benefit Policy

This policy establishes the rules for employee participation in the company’s Health Savings Account (HSA) and Flexible Spending Account (FSA) benefit programs. It explains eligibility, contribution limits, eligible expenses, reimbursement procedures, rollover or carryover treatment, and employee responsibilities. The company administers these benefits in accordance with the Internal Revenue Code, applicable IRS guidance, and all other applicable federal, state, and local laws.

This policy applies to all eligible employees enrolled in company-sponsored medical coverage or benefit plans that permit HSA or FSA participation. **Applicable jurisdictions:** United States employees only, unless a local plan document states otherwise. **Applicable roles:** All benefits-eligible employees, payroll administrators, HR staff, and benefits vendors involved in enrollment or claims administration. California employees: any payroll deductions, leave coordination, and benefit administration must also comply with applicable California wage and hour rules and state benefit requirements where they differ from federal rules.

For purposes of this policy: - **HSA** means a Health Savings Account under IRC Section 223. - **FSA** means a Flexible Spending Account under IRC Section 125. - **HDHP** means a high-deductible health plan that meets IRS eligibility requirements for HSA participation. - **Eligible expense** means an expense that qualifies under the plan document and applicable tax law. - **Carryover** means the amount of unused FSA funds that may be rolled into the next plan year if the plan allows it. - **Grace period** means an optional post-plan-year claims window, if offered by the plan. - **Policy holder** means the company or plan sponsor responsible for administering the benefit program.

The company may offer HSA and/or FSA benefits as part of its employee benefits package. Participation is voluntary unless otherwise required by a collective bargaining agreement, plan amendment, or other written benefit arrangement. The company will administer HSA and FSA elections in a nondiscriminatory manner consistent with EEOC requirements, and will not apply benefit rules in a way that unlawfully discriminates on the basis of protected characteristics under Title VII of the Civil Rights Act of 1964. Benefit administration will be coordinated with payroll practices to ensure lawful pre-tax deductions, proper withholding, and accurate reporting. For nonexempt employees, deductions and benefit administration must not interfere with FLSA overtime calculations or other wage obligations. The company will provide plan information, enrollment deadlines, and annual contribution limits during open enrollment or upon hire, as applicable.

**HSA eligibility** - Employees are eligible to contribute to an HSA only if they are enrolled in a qualifying HDHP and otherwise meet IRS eligibility requirements. - Employees generally may not contribute to an HSA if they are enrolled in disqualifying non-HDHP coverage, are claimed as a dependent on another person’s tax return, or otherwise fail IRS eligibility rules. - Employees must notify HR immediately if they become ineligible for HSA contributions. **FSA eligibility** - FSA eligibility is determined by the company’s plan document and enrollment rules. - Employees must complete enrollment within the stated election period and may only change elections during permitted IRS-allowed events or other plan-approved events. **Enrollment procedure** - Employees must submit elections through the designated benefits system by the published deadline. - HR or the benefits administrator will confirm enrollment, deduction amounts, and effective dates. - Employees are responsible for reviewing election confirmations for accuracy and reporting errors promptly. **California employees:** payroll deduction timing and any required notices must comply with California wage statement and deduction rules where applicable.

**HSA contribution limits** - The company will administer HSA contributions in accordance with the annual IRS limit, including any catch-up contributions for employees age 55 or older. - For 2026, the HSA contribution limit is $3,400 as reflected in current benefit guidance; the company will update this amount each plan year based on IRS published limits. - Total contributions include employee payroll deductions, employer contributions, and any other contributions made on the employee’s behalf. **FSA contribution limits** - FSA annual election amounts are limited by the company’s plan document and applicable IRS rules. - The company will communicate the annual FSA limit during open enrollment and will not accept elections above the plan maximum. **Payroll deductions** - Employee contributions will generally be taken on a pre-tax basis through payroll deductions, subject to plan rules and applicable law. - Deductions will begin and end according to the employee’s effective enrollment date and payroll schedule. - Employees are responsible for ensuring their elections do not exceed legal or plan limits. **Good-faith correction** - If an overcontribution or deduction error occurs, the company may correct the issue in good faith through payroll adjustment, refund, or other permitted correction method consistent with IRS and payroll requirements.

**Eligible expenses** - HSA funds may be used for qualified medical expenses as defined by the Internal Revenue Code and IRS guidance. - FSA funds may be used only for expenses allowed under the applicable FSA plan document and tax rules. - Employees should verify eligibility before submitting a claim. **Ineligible expenses** - Expenses that are not permitted under the plan or tax law are not reimbursable. - Duplicate claims, expenses already reimbursed by another source, and expenses lacking required documentation are not eligible. **Documentation requirements** - Employees must submit itemized receipts, explanation of benefits statements, or other supporting documentation requested by the claims administrator. - Documentation must clearly show the date of service, provider or merchant, amount, and description of the expense. **Reimbursement process** - Claims must be submitted through the designated administrator within the required filing deadline. - Approved reimbursements will be paid according to the plan’s processing schedule. - The company may deny or request additional information for incomplete or unsupported claims. **Coordination with other benefits** - Employees may not seek reimbursement from an HSA or FSA for expenses already paid by insurance, another benefit plan, or another reimbursement source unless permitted by law and plan rules.

**HSA rollover** - HSA funds generally roll over from year to year and do not forfeit at the end of the plan year, subject to applicable law and account provider rules. **FSA rollover / carryover** - FSA treatment at year-end depends on the plan design. - If the plan allows carryover, unused funds may be carried into the next plan year up to the plan’s stated limit. - If the plan uses a grace period, employees may incur eligible expenses during the grace period using prior-year funds, if permitted. - Any remaining FSA balance not eligible for carryover or grace period use may be forfeited under the plan’s use-it-or-lose-it rules. **Plan-specific notice** - The company will communicate the applicable rollover, carryover, grace period, and forfeiture rules before open enrollment each year. - Employees are responsible for understanding how year-end balances will be handled.

**Policy holder** - Maintains the plan document and this policy. - Ensures annual review of contribution limits, eligibility rules, and administrative procedures. **HR / Benefits team** - Communicates eligibility, enrollment deadlines, and plan changes. - Coordinates with payroll and the benefits administrator. - Reviews employee questions and escalates exceptions where needed. **Payroll** - Processes deductions accurately and on time. - Corrects deduction errors in good faith and in accordance with applicable law. **Employees** - Review eligibility requirements before enrolling. - Submit accurate elections and claims. - Promptly report status changes that affect HSA eligibility or FSA participation. **Benefits administrator / vendor** - Adjudicates claims, maintains records, and issues reimbursements according to the plan document.

Employees who knowingly submit false claims, alter documentation, exceed contribution limits, or misuse benefit funds may be subject to claim denial, repayment obligations, payroll correction, benefit suspension, and disciplinary action up to and including termination of employment. The company may make exceptions only when required by law, the plan document, or a written approval from the policy holder or authorized benefits representative. Any request for accommodation related to a disability, pregnancy-related condition, or other protected need will be reviewed through the ADA interactive process or other applicable legal process as required. The company will consider reasonable accommodation where the requested adjustment does not create undue hardship and is otherwise lawful. This policy will be administered consistently with the NLRA, including employees’ rights to engage in protected concerted activity, and with all applicable anti-retaliation requirements.

This policy will be reviewed at least annually and updated as needed to reflect changes in IRS guidance, benefit plan design, payroll practices, and applicable federal or state law. The policy holder is responsible for approving revisions and communicating material changes to employees before they take effect. **Current version:** 1.0 **Effective date:** 2026-01-01