Are you locked into your HSA Plan forever? No! Can you cancel your Plan whenever you like? Not likely!
Just like making changes to a Plan, cancelling a Plan falls within guidelines set out by the CRA.
That means that Plans can be cancelled within the annual renewal period, but generally not mid-Plan Year.
The reason is that there's a commitment by the Plan Sponsor to fund the Plan for the entire Plan Year so we're required to collect the committed funds on behalf of the Members of the Plan.
There are, however, a few exceptions:
- If the employees on the Plan sign a form or provide documentation acknowledging changes to their employment agreement and their benefit agreement to cancel a Plan mid-Plan Year - then we can stop their contributions.
- It's an individual Plan (only one Member on the Plan and he/she is giving the instructions), we’d be able to decrease the contributions on the basis that the Member is acknowledging changes to their employment agreement them self.
Cancelling a Plan is really quite easy once it's been established if it's allowed.
The Plan Sponsor, Plan Administrator, or Advisor of the Plan just needs to provide us with instructions to cancel the Plan.
The instructions can simply be by email (yay - no cumbersome forms!) as long as the instructions are coming from the email address registered to the Plan, which therefore acts as a 'digital signature' to authorize any changes to the Plan.
Once we have the instructions, we'll implement the changes and send a formal confirmation once complete. We don't send formal stuff very often but in terms of Plan Changes, you'll want to keep an eye out for it.
Tada! It's almost like magic!
For more detailed information, keep an eye out for our blog post "The Gist on Cancelling Plans & Changing Plan Contributions" coming soon!
In the meantime, if your plan includes insured or blended benefits, just submit a support request and we'll take a look at the specifics and advise you!