Flexible Spending Accounts and Health Savings Accounts
There are two options for employees to elect 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 do not participate in UA health coverage 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.
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 | |
|---|---|---|
|
|
Healthcare FSA |
Dependent Care FSA |
|
Eligibility |
All eligible employees, excluding those participating in the Health Savings Plan |
All eligible employees |
|
2023 Contribution Maximum |
$2,850 – Maximum 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 $570. 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.
| Healthcare FSA | HSA | |
|---|---|---|
|
Healthcare FSA |
HSA |
|
|
2023 Contribution Maximum |
$2,850 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: $3,850 pre-tax Family: $7,750 pre-tax Includes University contributions. $1,000 additional catch-up contribution allowed if you are 55 or older. |
|
2023 Employer Contribution |
None |
Individual Coverage – up to $650 Family Coverage – up to $1,200 |
|
Plan Year Rollover |
Any amount over $50 up to $570 |
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. Also, If you leave UA employment, you can take the account with you.