Flexible Spending Accounts and Health Savings Accounts

There are now two options for employees to elect to have tax-exempt dollars to be deducted from their pay checks to cover unreimbursed medical, dental and vision expenses – a Health Care Flexible Spending Account (FSA) and a Health Savings Account (HSA). Employees who participate in the Classic Plan, Premier Plan or who don’t participate in UA health coverage at all are eligible to participate in a Healthcare Flexible Spending Account. Only employees who participate in the Health Savings Plan can participate in a Health Savings Account. All employees, regardless of their health plan participation, are eligible to participate in Dependent Care Flexible Spending Accounts.

Flexible Spending Accounts (FSA)

Flexible Spending Accounts (FSA) are tax-exempt accounts that you can use to pay for eligible medical, dental, vision, prescription and dependent day care expenses.  Your contributions to an FSA are deducted from your pay before taxes, which lowers your taxable income.  Flexible Spending Accounts are Administered by UMR.  See the University’s full Flexible Benefit Summary Plan Description or additional information from UMR including links to detailed lists of eligible or ineligible expenses. 

You have two FSA options:

  • Healthcare FSA - Employees who participate in the Health Savings Plan are not eligible for the Healthcare FSA. All other benefits-eligible employees are eligible to participate in a Healthcare FSA.
  • Dependent (day) Care Account – All benefits-eligible employees are eligible to participate in the Dependent Care FSA.

 Contributions will be deducted from your paycheck exempt from taxes.   You will have access to your full Healthcare FSA annual contribution amount any time during the calendar year. 

 

Healthcare FSA

Dependent Care FSA

Eligibility

All eligible employees, excluding those participating in the Health Savings Plan

All eligible employees

2018 Contribution Maximum

$120 – Minimum Annual Contribution

$2,600 – Maximum Annual Contribution

$120 -  Minimum Annual Contribution

$5,000 -  Maximum Annual Contribution if married & filing jointly or single

$2,500  - Maximum Annual Contribution if married and filing separately

Plan Year Rollover

Any amount between $50 up to $500.  Excess is forfeited.

Unused funds are forfeited

Eligible Expenses

Medical, prescription drug, dental & vision expenses, including copays, coinsurance & deductibles

Dependent care expenses for daycare or after-school care expenses for a child under age 13, an elderly person or a person with disabilities as long as you claim them as a dependent on your tax return.  Expenses must be incurred because you & your spouse are working or looking for work.

Health Savings Accounts (HSA)

Health Savings Accounts (HSA) are pre-tax accounts that Health Savings Plan participants can use to pay for eligible medical, dental, vision, and prescription expenses.  Contributions to an HSA are deducted before taxes, which lowers taxable income.  Health Savings Accounts are administered by Optum Bank. 

Once an employee enrolls in the Health Savings Plan, a Health Savings Account (HSA) with Optum Bank will be opened for them. 

The IRS requires the following in order for you to enroll in an HSA:

  • You must be enrolled in the Health Savings Plan.
  • You can’t have other health coverage that pays for out-of-pocket health care expenses before you meet your plan deductible.
  • You or your spouse can’t have a Healthcare FSA or Health Reimbursement Account (HRA) in the same year that you have an HSA.
  • You can’t be eligible for or enrolled in Medicare, covered by TRICARE, or have received Veterans Administration (VA) benefits in the three previous months.
  • You can’t be claimed as a dependent by someone else.

What are the differences between FSAs and HSAs?

 

Healthcare FSA

HSA

2018 Contribution Maximum

$2,600 pre-tax

Elect contribution amount for the year at new hire and during Open Enrollment.   No changes allowed during the year without an eligible qualifying event.

·   Individual:  $3,450 pre-tax

·   Family:  $6,900 pre-tax

Includes University contributions.  $1,000 additional catch-up contribution allowed if you are 55 or older.

2018 Employer Contribution

None

·   Individual Coverage – up to $420

·   Family Coverage – up to $840

Plan Year Rollover

Any amount over $50 up to $500

Any amount

Account Ownership

Account is owned by the University.  If you leave, you can continue to use it through COBRA; once COBRA ends account balance is forfeited.

You own the account.  You can take it with you if you leave the University or retire.

Account Growth

·   Your contributions

 

·   Your contributions

·   University contributions

·   Transfers

·   Interest

·   Investment income

Access to Funds

Full yearly contribution any time during the plan year

Only funds deposited in the account

Reimbursement

File eligible claims for the plan year by March 31 of the following year

HSA funds can be used to pay for any eligible services incurred after your start date

Eligible Expenses

Copayments or deductibles, dental care, vision care, qualifying prescriptions, certain medical equipment.  For a full list of qualified medical expenses, visit www.irs.gov.

Health Savings Account contributions cannot be forfeited.  Unused amounts will carryover each year a.  Also, If  you leave UA employment, you can take the account with you.