Scott Florsheim, Special Projects Manager, Northwest Region Annual Conference, Spokane WA

Transcription

1 Scott Florsheim, Special Projects Manager, Northwest Region 2017 Annual Conference, Spokane WA

2 Employers can offer eligible benefits to employees on a pre-tax basis Helps reduce your tax and increase your spendable income

3 Designed to help employees save money on important expenses like: Eligible insurance premiums Health-related expenses Dependent care expenses

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5 Help with common medical expenses not covered by your insurance or with dependent day care expenses Elect a portion of your salary to be deducted, on a pre-tax basis, from each paycheck to use for reimbursement of qualified expenses

6 How it works Used to reimburse eligible medical expenses Expenses may be incurred by you, your spouse, or eligible dependents Eligible employees may participate, even if you do not have major medical coverage through your employer

7 Use your account to pay for a variety of out-of-pocket expenses Pay for products and services for you, your spouse, and your dependents cont ribut ion limit is $2,5 50. How ever, your emp loye r sets the amo unt that you may cont ribut e. Che ck with your emp loye r on your cont ribut ion limit.

8 1 Future service dates require proof of payment Visit for more details!

9 Estimate the medical expenses you anticipate to pay out of your own pocket (not covered by health coverage) during the year. Visit americanfidelity.com/customersupport/fsa-worksheet for the online worksheet.

10 Use or Lose Carefully choose your election amount each year Under Treasury regulations, if you don t use your full election amount during the required timeframe, any remaining funds are forfeited Check with your employer to see if your plan offers a Runoff Period Carryover Provision Grace Period

11 A period after the plan year ends when you are able to submit claims that you incurred during the previous plan year but have not yet submitted

12 You are able to carry over up to $500 of unused contributions from one plan year to the next, which may be used to reimburse eligible medical expenses incurred anytime during the next plan year

13 An additional two and a half months following the end of the plan year in which you are allowed to incur Health FSA claims and still receive reimbursements

14 The Health FSA Card allows you to pay for eligible medical expenses with your card instead of paying out of pocket first Take a look at this example of traditional reimbursement versus reimbursement using a Health FSA Card

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16 Buy eligible items with your Health FSA Card online at FSAstore.com

17 An option for Health Savings Account (HSA) participants May reimburse out-of-pocket vision and dental expenses Use your LPHFSA for annual dental and vision expenses, keeping more funds in your HSA to plan for the unexpected If your employer participates in an HSA program, see if a LPHFSA is available and ask for more details.

18 Used to reimburse eligible dependent care expenses incurred while you are working You may allocate up to $5,000 pre-tax per calendar year for reimbursement of dependent care services or $2,500 if you are married and file a separate tax return

19 Any employee who meets certain eligibility requirements and who has a qualifying dependent If you are considering participating, you should be aware that you may be able to take a federal and/or state tax credit instead of participating in the Dependent Day Care FSA

20 A tax dependent of the employee who is under the age of 13 and spends at least eight hours per day in the employee s household. A spouse or dependent who is physically or mentally incapable of self-care, has the same principle place of residence as the employee for more than half of the year and spends at least eight hours per day in the employee s household.

21 After-school care or extended day care programs Babysitter, during work hours, inside or outside participant s household Custodial or elder care expenses if the qualifying individual still spends at least eight hours each day in the employee s household

22 Educational expenses (kindergarten and above) Custodial elder care (not work-related, for other purpose) Nursing home care Transportation to and from eligible care (not provided by the care provider)

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24 You only have access to your funds as they are deducted from each paycheck and deposited into your FSA Maximize your reimbursement opportunities by submitting the entire amount of expense Build up a pool of submitted expenses, with pending amounts ready for reimbursement as soon as your next contribution is received and deposited into your FSA

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26 ESB Set aside money, pre-tax, to pay for eligible medical expenses.

27 1 2 3 An account you own Triple tax advantage Potential for growth

28 1. An account you own Like a personal savings account, the money in an HSA rolls over annually, meaning the funds are never forfeited and you can take it with you wherever you go even if you change jobs, change health plans, or retire. ESB

29 2. Triple tax advantage HSAs offer a triple tax advantage. The funds go into the account tax free, can be withdrawn tax free for eligible medical expenses, and continue to grow tax free until you need them. ESB

30 3. Potential for growth The money in your HSA earns interest, so the more you save, the more you earn. Account holders may also choose to invest any balance over $2,500 into a variety of investment options. At age 65, you can use your HSA dollars for any purpose without penalty (non-eligible expenses are still subject to income tax). This is a great way to potentially grow your savings for future healthcare costs or retirement. ESB

31 ESB Who is Eligible to Participate?

32 To participate in an HSA, you must first be enrolled in a qualified High Deductible Health Plan (HDHP). An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and outof-pocket medical expenses that you must pay for covered expenses. Out-of-pocket expenses include copayments and other amounts, but do not include premiums.

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34 Once you re covered by a qualified HDHP, you may contribute to a Health Savings Account as long as you are not also covered by: A general purpose Health Flexible Spending Account (Health FSA) A Health Reimbursement Arrangement (HRA) Other disqualifying coverage You also may not participate if your spouse has a general purpose Health FSA or HRA that allows reimbursements for your expenses. ESB

35 Once you re covered by a qualified HDHP, you may contribute to an HSA as long as you: Are not enrolled in Medicare or Tricare Are not covered by a secondary health insurance plan with a lower deductible Are not being claimed as a dependent on someone else s tax return If you are over 65, as long as you have not enrolled in Medicare or Tricare, you may continue to make contributions and use your funds. ESB

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37 Your contribution limit is based on who is on your HDHP. If you are the only person on your HDHP, you may contribute the self-only coverage maximum. If you include your spouse and/or any tax-dependent children on your HDHP, you may contribute the family coverage maximum. As the account holder, you may use your HSA funds for your spouse and any tax-dependent children, regardless if they are on your HDHP or not. ESB

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39 ESB Using Your Funds

40 ESB You can use your HSA funds to pay for any eligible medical expenses. This includes expenses for major medical, dental and vision care, and prescriptions. Additionally, you can use your HSA funds to pay for certain premiums, including: Long-term care insurance Healthcare continuation coverage (such as coverage under COBRA) Healthcare coverage while receiving unemployment compensation under federal or state law Medicare and other healthcare coverage if you are 65 or older (does not include premiums for Medicare supplemental policies such as Medigap)

41 ESB Using Your Funds

42 Medical expenses, including medical bills to cover deductibles and copayments Prescription drugs and over-the-counter medications prescribed by your doctor Vision expenses (including prescription glasses, contacts and Lasik) Dental treatment (including orthodontia) Chiropractor Immunizations, Flu shots Medical exams, X-rays ESB

43 ESB Pairing Your HSA

44 You have an option to pair your HSA with a Limited Purpose Health Flexible Spending Account to pay for qualifying dental and vision expenses for you, your spouse, and your eligible dependents. Participating in both plans allows you to maximize tax savings and tax benefits. ESB

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47 ESB Employer-funded plan authorized by IRS Notice Reimburses the employee for qualified medical expenses of the employee and his/her spouse, dependents, or adult children

48 An HRA is an employer-sponsored benefit program offered outside of Section 125 and usually in conjunction with high deductible health coverage (HDHC), although an employee may have an HRA and not participate in an HDHC. An HRA is 100% employer funded (no funding can come from the employee). The account can be used to reimburse the employee for medical expenses and requires claim adjudication. ESB

49 There are two main types of HRAs Funded HRA Unfunded HRA The Employer can determine if the funds will rollover each year or not ESB

50 An employee covered by an HRA can also participate in a general or limited Health FSA Can not use both accounts to reimburse the same expense (double dipping) ESB

51 Employee who satisfies the eligibility criteria set forth by the employer Only available to employees enrolled in a major medical plan offered by the employer ESB

52 Out-of-pocket medical expenses (under Code Section 213) which are not reimbursed by another source ESB

53 Deductibles Co-pays Vision Care Dental Care Routine Physicals Contacts, Eyeglasses, and Contact Solution ESB

54 ESB Comparing HSAs, FSAs, & HRAs

55 In addition to HSAs, Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) are other common medical reimbursement accounts. All three accounts allow you to set aside money for medical expenses, while reducing your overall tax burden. With an HSA, you own the account, the funds are never forfeited at the end of the plan year, and you can take it with you wherever you go. Also, unlike a Health FSA, your funds are available in your account as contributions are made, instead of at the beginning of the plan year. ESB

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