Health Savings Account (HSA)
Administered by: Optum Bank
Available only to employees who enroll in the CDHP Plan or CDHP2 Plan.
Acme offers you the following accounts and encourages you to take full advantage of their money-saving potential. You can enroll in them on the Acme Enrollment website as a new hire, during Open Enrollment, or if you have a qualifying life event. Note: You must enroll in these accounts each Open Enrollment if you want to contribute the next year, even if you already participate.
2020 tax-advantaged accounts
Health Care Flexible Spending Account (FSA)
Administered by: WageWorks
Available to employees who enroll in the PPO Plan, PPO2 Plan, or HMO Plan or do not elect medical coverage through Acme.
Combination Flexible Spending Account (FSA)
Administered by: WageWorks
Available to employees who enroll in the CDHP Plan or CDHP2 Plan with an HSA.
Dependent Care Flexible Spending Account (FSA)
Administered by: WageWorks
Available to all employees.
Key features at a glance
Tax-free money.
Money goes in tax-free* and comes out tax-free when it’s used for eligible expenses.
Convenient payroll deductions.
Contribute to your accounts easily and effortlessly.
Helpful budgeting tool.
Plan for upcoming expenses by setting aside money each paycheck.
*Contributions are not subject to federal tax. However, HSA contributions are currently subject to state tax in AL and CA, both HSA and FSA contributions are subject to state tax in NJ. Consult with your tax advisor to understand the potential tax consequences of enrolling in an HSA and/or FSA.
Compare the accounts
Access your account
What’s eligible?
How much could you save?
Here’s an example. Let’s say Tom decides to set aside $2,000 in an HSA or FSA for the year. Normally, on that money, he’d pay $480 in federal income tax, $100 in state income tax, and $153 in payroll tax. So, by contributing that $2,000 to his HSA or FSA, he’ll get $733 in tax savings for the year.
| Without an HSA or FSA, Tom would pay … | Savings |
|---|---|
| 24% in federal income tax | $480 |
| 5% in state income tax* | $100 |
| 7.65% in payroll tax | $153 |
| His total tax savings for the year with an HSA or FSA | $733 |
This hypothetical illustration is for educational purposes only. Dollar amounts or savings will vary depending on income, state and city tax rules, and other factors. Please consult a tax, legal, or financial advisor about your own personal situation.
*Contributions are not subject to federal tax. However, HSA contributions are currently subject to state tax in AL and CA, both HSA and FSA contributions are subject to state tax in NJ. Consult with your tax advisor to understand the potential tax consequences of enrolling in an HSA and/or FSA.
With the CDHP Plan, you’re eligible to open and contribute money to a Health Savings Account (HSA) through Optum Bank. The HSA is a tax-free savings account that you own. You can use it to pay for eligible health expenses anytime, even in retirement.
Get unbeatable advantages with an HSA
The HSA has a triple-tax advantage that trumps even a 401(k) or Roth IRA. And, Acme will contribute to your account, too!
Put money in tax-free.
You contribute to your HSA through before-tax payroll deductions.
If you need to, you can change your contribution amount anytime.
Get company contributions.
Acme will contribute $500 if you have employee-only medical plan coverage, or $1,000 if you cover dependents.
Pay for care tax-free.*
Pay for eligible medical, dental, and vision expenses for you and your family using your HSA debit card (provided sufficient funds are in your account).
Track your spending, check your balance, reimburse yourself, and more on the Optum Bank website.
Grow money for the future tax-free.
All the money in your HSA is yours to keep, year after year.
You can build up savings through tax-free interest and even invest your money once it reaches a minimum balance, which gives you the potential for tax-free earnings growth and a way to plan ahead.
[Alternate version if no company contributions to HSA:]
Get unbeatable advantages with an HSA
The HSA has a triple-tax advantage that trumps even a 401(k) or Roth IRA.
Put money in tax-free.
You contribute to your HSA through before-tax payroll deductions.
If you need to, you can change your contribution amount anytime.
Pay for care tax-free.*
Pay for eligible medical, dental, and vision expenses for you and your family with tax-free money.
You can either use your HSA debit card (provided sufficient funds are in your account) or make payments later through the Optum Bank website.
Grow money for the future tax-free.
All the money in your HSA is yours to keep, year after year.
You can build up savings through tax-free interest and even invest your money once it reaches a minimum balance, which gives you the potential for tax-free earnings growth and a way to plan ahead.
Manage your account.
Use the Optum Bank website or mobile app to:
- Check your balance.
- Pay bills.
- Reimburse yourself for payments you made without HSA funds.
- Manage your HSA investments.
2020 contribution limits
Keep in mind, the maximum amount you and Acme can contribute to your HSA is determined by annual limits that the IRS sets. In 2020, the total contribution limits are:
- $4,150 if you have employee-only medical plan coverage, or
- $8,300 if you cover dependents.
Add $1,000 to these limits if you’re age 55 or older.
Who’s eligible for an HSA?
In order to establish and contribute to an HSA, you:
- Must be enrolled in the CDHP Plan, CDHP2 Plan, or another qualified high-deductible medical plan.
- Cannot simultaneously participate in the Health Care FSA (but participation in a Combination FSA is allowed).
- Cannot be enrolled in any other medical coverage, including a spouse’s plan or Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
You should review IRS rules for making HSA contributions if you will turn age 65 during the year. For more information, see IRS Publication 969.
Increase your tax savings with a Combination FSA
Use your HSA together with a Combination FSA for additional tax savings. With the Combination FSA, only dental and vision expenses are allowed until you meet the IRS-required medical deductible of $1,600/individual and $3,200/family. After that, all eligible medical expenses are allowed, too.
Increase your tax savings with a Limited Purpose FSA
Use your HSA together with a Limited Purpose FSA for additional tax savings. With the Limited Purpose FSA, only dental and vision expenses are allowed.
Getting started
To contribute to an HSA, you must be enrolled in the CDHP Plan. If you’re enrolled and haven’t opened your HSA yet, visit Optum Bank to open your account. If you’re not enrolled in the CDHP Plan, you may enroll during the next Open Enrollment period.
As you start using your account, keep in mind that you can only spend money that has actually been deposited into your account — your entire annual contribution amount is not available to you from the beginning of the plan year. Your HSA balance will grow as deposits are made from each paycheck.
Consolidate HSA funds next year
If you currently have an HSA, you can simplify your account management by transferring your existing HSA balance into your new HSA bank (through Optum Bank) starting in January 2021. An HSA Transfer Request Form and instructions will be available on the Acme Enrollment website. You may be charged a fee to make the transfer depending on your bank. If you don’t take action to consolidate accounts between January 1 and January 31, 2021, you may incur a monthly service fee through your 2020 bank. The company contribution will not be deposited into previous HSA bank accounts.
With the CDHP Plan, you will receive an employer-funded Health Reimbursement Account (HRA), administered by Optum Bank, which you can use to help cover the costs of your health care.
HRA features
- It’s free money. Completely funded by Acme, without employee contributions.
- Works like a bank account. Acme contributes $X to an account that can be used to pay for your eligible health care expenses. You’ll receive $X for employee-only medical coverage or $X if you cover dependents. Swipe your HRA debit card to spend the money on:
- Deductibles
- Coinsurance
- Prescription drugs
- Out-of-pocket expenses
- And more
- Acme contributes to your HRA annually, and the funds are available for use at the beginning of the calendar year.
- Unused money does not carry over at the end of each year. You cannot take the money with you if you leave the company.
- Can be paired with a Health Care FSA. You can set aside your own before-tax money in an FSA to help cover health expenses that exceed your HRA amount.
Using an FSA is like getting a discount on everyday health and/or dependent care expenses because you’re paying with tax-free money. There are separate FSAs for health care and dependent care. Our FSAs are administered by WageWorks.
Use your money!
With FSA money, you “use it or lose it.” If you have a balance left in your FSA as year-end approaches, try to spend as much of it as you can on eligible expenses. Request reimbursement or manage your account on the WageWorks website.
Health Care FSA
A Health Care FSA is available to employees who enroll in the PPO Plan, PPO2 Plan, or HMO Plan or do not elect medical coverage. You can contribute up to $3,200 for the year through before-tax payroll deductions to help cover eligible medical, dental, and vision expenses.
How the Health Care FSA works
Choose
Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.
Contribute
Your annual contribution will be divided into equal payroll deductions, but the entire amount is available to you from the beginning of the plan year.
Spend
Spend your money by using your FSA debit card, or log in to the WageWorks website to request reimbursement for payments you’ve made.
Use It Up
Up to $500 of unused money may be carried over to the next year; amounts above $500 will be forfeited, so be sure to use it up!
Combination FSA
A Combination FSA is available only to employees with an HSA to offer additional tax-saving opportunities. You can contribute up to $3,200 for the year through before-tax payroll deductions. Note that only dental and vision expenses are allowed until you meet the IRS-required medical deductible of $1,600/individual and $3,200/family, then eligible medical and prescription drug expenses are also allowed. See a complete list of eligible expenses.
How the Combination FSA works
Choose
Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.
Contribute
Your annual contribution will be divided into equal payroll deductions, but the entire amount is available to you from the beginning of the plan year.
Spend
Spend your money by using your FSA debit card, or log in to the WageWorks website to request reimbursement for payments you’ve made.
Use It Up
Up to $500 of unused money may be carried over to the next year; amounts above $500 will be forfeited, so be sure to use it up!
Limited Purpose FSA
A Limited Purpose FSA is available only to employees with an HSA to offer additional tax-saving opportunities. You can contribute up to $3,200 for the year through before-tax payroll deductions. This account can be used on eligible dental and vision expenses only.
How the Limited Purpose FSA works
Choose
Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.
Contribute
Your annual contribution will be divided into equal payroll deductions, but the entire amount is available to you from the beginning of the plan year.
Spend
Spend your money by using your FSA debit card, or log in to the WageWorks website to request reimbursement for payments you’ve made.
Use It Up
Up to $500 of unused money may be carried over to the next year; amounts above $500 will be forfeited, so be sure to use it up!
Dependent Care FSA
A Dependent Care FSA is available to all employees. You can contribute up to $5,000 for the year through before-tax payroll deductions to help cover your eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders.
How the Dependent Care FSA works
Choose
Choose your contribution amount when you enroll. You can only change it during the year if your personal situation changes, so estimate carefully.
Contribute
Your annual contribution will be divided into equal payroll deductions. You can only use money that has been deposited into your account.
Spend
Spend your money by using your FSA debit card, or log in to the WageWorks website to request reimbursement for payments you’ve made.
Use It Up
Unused money does not carry over at the end of each year — use it or lose it! Be sure to use it up.
| HSA | Combination FSA | Health Care FSA | Dependent Care FSA | |
|---|---|---|---|---|
| Available with … | CDHP Plan | CDHP Plan |
PPO Plan
PPO2 Plan
HMO Plan
(Also available if you waive medical coverage)
|
Your employment at Acme |
| Receive company contribution | Yes | No | No | No |
| Change your contribution amount anytime | Yes | No | No | No |
| Access your entire annual contribution amount as needed | No | Yes | Yes | No |
| Access only funds that have been deposited | Yes | No | No | Yes |
| Use account money for… | All eligible health care expenses | Only dental and vision expenses until you meet the IRS-required deductible, then use for all eligible health care expenses | All eligible health care expenses | Eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders |
| “Use it or lose it” at year-end | No | Yes (Carry over up to $500) | Yes (Carry over up to $500) | Yes |
| Money is always yours to keep | Yes | No | No | No |