Lively Conversations is our video series designed to explore timely topics in healthcare and employee benefits through open, practical dialogue. Each episode brings together voices from across Lively to share insights, experiences, and strategies that matter most to brokers, employers, and HR leaders.

In this installment, Rick Sutter, Regional Sales Director, sits down with Jordan Mazur, Lively’s General Counsel, to unpack some of the most common compliance questions employers and brokers face. From varying contributions to non-discrimination rules, this episode sheds light on the essentials of staying compliant while supporting employees.

▶ Watch the full conversation below:

Highlights from the Conversation

Rather than diving into legal jargon, this conversation focuses on practical compliance issues employers encounter every day.

Key topics discussed include:

• Varying employer contributions Employers can set different contribution amounts for different employee groups, but only if they follow written plan rules, apply them consistently, and avoid favoring highly compensated employees.

• Ineligible spending HSAs operate on self-certification, so ineligible withdrawals can trigger taxes and penalties if not corrected. FSAs require substantiation, and misuse can lead to suspended cards or taxable income.

• Carryover vs. grace period FSAs may offer either a carryover into the next year or a grace period to spend remaining funds — but not both. Employers must choose one in their plan document.

• Non-discrimination testing While not currently mandated, testing is highly recommended to ensure compliance. Employers should assess eligibility, benefits levels, and key employee concentration to avoid inadvertently favoring highly compensated employees.

• Notifying employees of changes Employers are required to communicate plan changes that affect participant rights or administration. Some updates align with open enrollment, but others may require mid-year notifications.

As open enrollment approaches, understanding these rules can help organizations stay proactive and avoid last-minute issues.

Compliance in Practice

The conversation emphasizes that compliance isn’t just about avoiding penalties — it’s about building clarity and trust with employees. Jordan highlights that compliance rules are designed to create fairness. Employers who document their plan decisions, test for discrimination proactively, and communicate changes transparently are in the best position to succeed. By taking a proactive approach, organizations can prevent last-minute scrambles, strengthen employee confidence, and stay ahead of evolving regulations.

Who Should Watch This Video?

This episode is especially relevant for:

• HR professionals who manage plan setup and employee communications, and want straightforward guidance on how to document contributions, handle misuse of funds, and communicate plan changes.

• Brokers and consultants who advise clients on contribution strategies and compliance risks, and need clear, practical talking points to support employers during open enrollment.

• Employers and business leaders looking to understand non-discrimination rules, FSA carryover vs. grace period decisions, and employee notification requirements — without the legal jargon.

• Anyone navigating employee benefits who wants clarity on how compliance impacts everyday plan administration, from plan documents to employee education.

Whether you’re guiding employees, advising clients, or leading a team, this episode offers practical guidance to help you stay confident and compliant.

Closing Thoughts

Compliance questions come up often because the rules are complex and constantly evolving. As Rick and Jordan share, the key is to document your plan, avoid favoritism toward highly compensated employees, communicate changes promptly, and use testing to stay compliant.

If you’re preparing for open enrollment or re-evaluating your benefits strategy, now is the time to review compliance practices. Interested in learning how Lively can support your organization? Contact our team today to learn more.