Flexible Spending Account

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Key Points to Take Away

A Flexible Spending Account (FSA) allows an employee to set aside a portion of earnings to pay for qualified expenses on a pre-tax basis for themselves, their spouse and any tax dependents. The full annual amount of funding is available at the beginning of the plan year. Employers may also choose to contribute to the FSA under certain parameters.

The Patient Protection and Affordability Act has shifted FSA rules and regulations. For the calendar year 2021, the employee FSA contribution limit is $2,750. However, under certain conditions, up to $550 remaining in the account at the end of the plan year may be rolled over unlike the previous "use it or lose it" standard where any unused funds are forfeited. Health care expenses such as medical, dental, vision and limited over-the-counter items are FSA eligible.

 

Please visit our partner the FSA Store for a list of some FSA eligible items.

  • Medical Flexible Spending Account
     

  • Pre-taxed Funds are in
     

  • An FSA is a paid by the employer and the employee to help cover out of pocket medical expenses
     

  • Most plan funds are Use-it-or-Lose by end of plan year but, some allow for a $550 rollover into the next  year
     

  • Funds normally cover eligible medical, dental and vision expenses
     

  • A few other expenses could be used for:
    - Prescription Medications
    - Eyeglasses & Contacts
    - Over the counter health products
    - First aid Items
    - Home health care items

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Health Reimbursement Account

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Key Points to Take Away

A Health Reimbursement Arrangement (HRA) is an account funded solely by an employer to help employees pay for health care expenses on a tax-free basis. The employer sets the parameters for the Health Reimbursement Accounts is to be used and unused dollars remain with the employer. A tremendous amount of originality is available to the employer when designing these plans.

Most often but not always, HRAs are implemented in conjunction with a High Deductible Health Plans (HDHP) to control health insurance costs. Because the HDHP premiums are lower, the employer can deposit the savings into HRA accounts for employee to access. The annual amount deposited into these accounts is typically enough to cover an individual's or family's annual health care expenses, but less than the health insurance annual deductible. This potentially creates a gap which the employee is responsible for a portion of expenses within a plan year. This is an incentive for participants to be wise consumers and offer employees choices when shopping for health care.

 

The amount of funding, eligible expenses and rollover amount, if any, is decided by the employer and specified in the Plan Document which is provided to all HRA participants.

  • An HRA is a Health Reimbursement Arrangement
     

  • Funds are paid by the employer to help cover out of pocket expenses
     

  • Tax free funds provided to the employee
     

  • Funds are only for the plan year

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Dependent Care Account

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Key Points to Take Away

A Dependent Care Account (DCA) allows you to be reimbursed a maximum of $5000 on a pre-tax basis for childcare or adult dependent care expenses for qualified dependents that are necessary to allow you or your spouse to work, look for work, or attend school full-time.

Your DCA can be used to reimburse you with pre-tax dollars if the expenses for your dependents meet the IRS definition of dependent care expenses for income tax purposes. An adult (e.g., parent, grandparent, and adult disabled child) may qualify as a dependent if you are providing more than half of that person's care for the year.

 

Claims Processing

 

Healthy Dollars works with employees to ensure they are set up for the continual reimbursement with direct deposit if eligible. This process eliminates the need to submit claims throughout the year and provides a single claim form that can be completed annually. Click here to access the Dependent Care Account Form.

  • A DCA/DCAP is a Dependent Care Account
     

  • Pre-Tax funds are paid by the employee to help cover out of pocket expenses
     

  • Eligible expenses can be daycare, after school care or elderly care as long as requirements are met
     

  • Funds are only for the plan year

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Health Savings Account

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Key Points to Take Away

A Health Savings Account (HSA) allows individuals covered by high deductible health plans (HDHP) to save for qualified medical expenses on a pre-tax basis for themselves, their spouse, and any tax dependents.

In order to receive the benefits of an HSA, the law requires that the savings account be combined with a qualified high deductible health insurance plan. Currently, the minimum annual deductible of a qualified HSA plan for an individual is $3,600 and $7,200 for a family.

 

You may use your HSA funds to pay for expenses under your HDHP that you incur before you have met your deductible, for coinsurance or co-payments you have after meeting your deductible, or for any other qualified medical expenses such as dental and vision. Funds remaining in your account at the end of the year roll over and accumulate for future qualified medical expenses.

  • An HSA is a Healthy Savings Account
     

  • You must be enrolled in a HDHP in order to be eligible
     

  • Unused funds rollover each year
     

  • Account is portable – take it with you!

Health Savings Account Coverage Chart
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Commuter Programs

Commuter plans provide a tax-free benefit to employees who take public transportation, pay for parking or ride a bicycle to work. These plans also lower your company’s payroll taxes while employees take home extra money each month allowed under IRS Section 132(f).

PARKING

 

  • Parking expenses include monthly or daily parking, metered parking or parking at a mass transit facility.

  • Employees and/or employers contribute up to $270/month (pre-tax). Additional post-tax funds may be added.

  • Elections can be adjusted as needed throughout the year as needs change.

  • Funds roll over from year to year.

 

TRANSIT

 

  • Transit expenses include bus vouchers, pass and tokens, ferry passes, van-pooling and commuter rail passes.

  • Employees and/or employer can contribute up to $270/month (pre-tax). Additional post tax funds may be added.

  • Elections can be adjusted as needed throughout the year as needs change.

  • Funds roll over from year to year.

 

VANPOOL

  • Seating capacity of 6 or more adults, 50% full.

  • Employees and/or employers contribute up to $270/month (pre-tax). Additional post-tax funds may be added.

 

REIMBURSEMENT

 

  • Debit Card

  • Continual reimbursement form

  • Manual claim

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Key Points to Take Away

  • Funds roll over year to year
     

  • Cannot contribute more than $270 / month
     

  • Additional POST TAX funds may be added
     

  • Van Pool is 6 or more adults

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