Section F: Revocable and Irrevocable Health Care Expenditures (HCSO Administrative Guidance)

Answers from the Revocable and Irrevocable Health Care Expenditures section of the HCSO Administrative Guidance.

1. What is an Irrevocable Expenditure?

An Irrevocable Health Care Expenditure is a Health Care Expenditure that has not been retained by and cannot at any time be recovered by or returned to the employer. This means that the employer cannot recover any portion of the funds, even if the employee leaves the job or if the business ceases to operate. Since 2017, only Irrevocable Expenditures have been permitted by the HCSO.

A few examples of Irrevocable Expenditures include:

  • Payments to an insurance provider for medical, dental, or vision insurance premiums;
  • Contributions to the SF City Option; and
  • Contributions to Health Savings Accounts, Medical Savings Accounts, or other irrevocable reimbursement accounts.

Updated January 5, 2023

2. Do employer contributions to a Flexible Spending Arrangement count as Health Care Expenditures under the HCSO?

No. Funds contributed to a Flexible Spending Arrangement (also known as a Flexible Spending Account or FSA) only remain available to the employee for one calendar year. In order to qualify as a Health Care Expenditure under the HCSO, a Revocable Expenditure cannot be revoked for a minimum of twenty-four 24 months (if the Covered Employee remains employed).

Last updated February 28, 2024