No, an employee does not have to enroll in the group health plan to participate in a healthcare Flexible Spending Account (FSA).
As long as the employer offers an FSA as part of their Section 125 cafeteria plan, employees can usually elect the FSA independently, even if they decline the employer’s medical coverage. This can be helpful for employees who are covered under a spouse’s plan but still want to take advantage of pre-tax savings for out-of-pocket healthcare expenses.
However, it’s important to note that the employer must offer a group health plan in order to offer a healthcare FSA. So while enrollment in the health plan isn’t required, the plan itself must exist for the FSA to be valid.
Some employers may choose to impose additional rules—such as limiting FSA participation to employees who enroll in the group medical plan—but this is a company-level decision, not an IRS requirement. Be sure to check the employer’s specific plan guidelines to confirm eligibility.