HCW Benefits Blog

 Contributor:
Jenn Hargiss, Client Coordinator and Consultant
Hill, Chesson & Woody

Education to employees around what is and is not permissible at an onsite clinic is a big part of making sure employees are not disqualified from their HSA eligibility. Having an onsite clinic check ID cards and recognize those employees covered on an HDHP/HSA plan, as well as what services can and cannot be provided, are an important step in the education process. Take care in the design of your onsite clinic to ensure you are mitigating the potential adverse affect it could have on your employees' HSA eligibility.

IRS Notice 2008-59 addresses the potential impact. This notice has a great Q&A in regard to HSAs and on-site clinics:

Question: Is an otherwise eligible individual who has access to free healthcare or healthcare at charges below fair market value from a clinic on an employer’s premises an eligible individual under § 223(c)(1)?

Answer: An individual will not fail to be an eligible individual under § 223(c)(1)(A) merely because the individual has access to free healthcare or healthcare at charges below fair market value from an employer’s onsite clinic if the clinic does not provide significant benefits in the nature of medical care (in addition to disregarded coverage or preventive care).

Here's an example...
A manufacturing plant operates an onsite clinic that provides the following free healthcare for employees: (1) physicals and immunizations; (2) injecting antigens provided by employees (e.g., performing allergy injections); (3) a variety of aspirin and other nonprescription pain relievers; and (4) treatment for injuries caused by accidents at the plant.

The clinic does not provide significant benefits in the nature of medical care in addition to disregarded coverage or preventive care.

Remember that an onsite clinic is permissible if nominal benefits are provided (e.g., flu shots, aspirin and bandages). The onsite clinic is not permissible if substantial benefits are provided.

So, this brings to light a necessary question: What types of services does your on-site clinic offer? Could your employees face losing their HSA because of the services you offer?