Short answer: No. An employee does not have to enroll in the employer’s group health plan to participate in a health care FSA, but the employer must offer a group health plan in order to offer an FSA.
An employee generally may elect a health care Flexible Spending Account (FSA) even if they decline enrollment in the employer’s group medical plan. As long as the employer offers an FSA through a Section 125 cafeteria plan, employees can typically choose the FSA independently of medical coverage.
This is common for employees who are covered under a spouse’s health plan but still want to use pre-tax dollars for eligible out-of-pocket medical expenses such as copays, prescriptions, or dental and vision costs.
However, federal rules require that an employer offer a group health plan in order to sponsor a health care FSA. While an employee does not need to enroll in the medical plan, the medical plan must exist for the FSA to be valid under tax rules.
Employers may impose additional eligibility conditions in their plan design, such as limiting FSA participation to employees who enroll in the group health plan. These restrictions are employer-specific and not required by the IRS, so employees should review their plan documents to confirm eligibility.
Sources
- Internal Revenue Service, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans: https://www.irs.gov/publications/p969
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Internal Revenue Code, Section 125: https://www.law.cornell.edu/uscode/text/26/125
Content history
Originally published: March 25, 2025
Last reviewed: January 25, 2026