Flexible Savings Accounts (FSA) and Health Savings Accounts (HSA) help you save for qualified medical expenses. However, the two vary in terms of benefits and eligibility.
Which account is right for you?
Health Spending Account (HSA)
If you elect our HDHP $3,200 HSA Plan you are eligible to enroll in and contribute to a Health Savings Account (HSA). This combination allows YOU, the consumer, control over how your healthcare dollars are spent. A HSA operates like a tax-free savings account for medical expenses, allowing you to gain maximum tax benefit for your share of these expenses. HSA funds may be used without penalty to pay for qualified medical, dental and vision expenses as well as COBRA premiums. Unused monies grow tax free and roll over from year to year from active employment into retirement.
How the High Deductible Health Plan with HSA works:
Upon enrollment in a qualified HDHP, OMEGA Benefits will send you an email with a link to activate your HSA. Once they receive confirmation from you, OMEGA Benefits will set-up your account and contributions will automatically be deposited. OMEGA Benefits will mail you a Health Savings Account (HSA) debit card to your home address within 10-14 days.
The HSA is not for everyone. You’re eligible only if you are:
- Enrolled in the High Deductible Health Plan
- Not enrolled in other non-HDHP medical coverage, including Medicare, Medicaid, or Tricare.
- Not a tax dependent.
- Not enrolled in a healthcare Flexible Spending Account (FSA), unless it’s a “limited purpose” FSA for dental and vision expenses.
A Health Savings Account (HSA) is an easy way to pay for healthcare expenses that you have today and save for expenses you may have in the future.
You can use your OMEGA Benefits HSA debit card to pay for eligible expenses like office visits, lab tests, deductibles, coinsurance, prescriptions, dental and vision care and even some drugstore items.
One of the best features of the HSA is that money left over at the end of the year remains in the account so you can use it the following year or at any time in the future. Even if you leave Asset Living or retire, your HSA goes with you!
Funds available for reimbursement are limited to the balance in your HSA account.
Four Reasons to Love a Health Savings Account (HSA)
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Tax-free. No federal tax on contributions, or state tax in most states. Withdrawals are also tax-free as long as they’re for eligible healthcare expenses.
02
No “use it or lose it.” Your balance rolls over from year to year. You own the account and can continue to use it even if you change medical plans or leave the company.
03
Use it now or later. Use your HSA for healthcare expenses you have today or save it to use in the future.
04
Boosts retirement savings. After you retire, you can use your HSA for healthcare expenses tax-free, or for regular living expenses, taxable but no penalties.
Flexible Spending Account (FSA)
A Flexible Spending Account (FSA) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You do not pay taxes on this money which means you'll save an amount equal to the taxes you would have paid on the money you set aside. You don’t have to enroll in one of our medical plans to participate in the healthcare FSA. However, if you or your spouse are enrolled in our high deductible health plan, you can only participate in the “limited purpose” FSA for dental and vision expenses.
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There are three FSA types:
Healthcare Flexible Spending Account (FSA): This account lets you pay for all eligible medical expenses, including dental and vision expenses and over the counter medications. You may not participate in a Healthcare FSA if you or a spouse are enrolled in a High Deductible Health Plan (HDHP).
Limited Purpose Flexible Spending Account (LPFSA): This account is restricted to dental and vision expenses exclusively. You may be enrolled in a High Deductible Health Plan (HDHP) and Health Savings Account (HSA) with the LPFSA and use the LPFSA for dental and vision expenses, while saving your HSA funds for medical expenses and long-term future healthcare costs.
Dependent Care Flexible Spending Account (DCFSA): This account is restricted to dependent care expenses exclusively. A qualifying dependent may be a child under the age 13, a disabled spouse or an older parent in eldercare.
Set aside healthcare dollars for the coming year
- A healthcare FSA allows you to set aside tax-free money to pay for healthcare expenses you expect to have over the coming year
How the Healthcare FSA works:
- You estimate what you and your family’s out-of-pocket costs will be for the coming year. Eligible expenses include office visits, surgery, dental and vision expenses, prescriptions, even eligible drugstore items.
- You can contribute up to $3,200, the annual limit set by the IRS. Contributions are deducted from your pay pretax, meaning no federal or state tax on that amount.
- During the year, you can use your FSA debit card to pay for services and products. Withdrawals are tax-free as long as they’re for eligible healthcare expenses.
Dependent Care FSA
Dependent Care FSA—up to $5,000 per year tax-free
A dependent care Flexible Spending Account (FSA) can help families save potentially hundreds of dollars per year on day care. This program is administered by OMEGA Benefits.
Here's how the Dependent FSA works:
You set aside money from your paycheck, before taxes, to pay for work-related day care expenses. Eligible expenses include not only child care, but also before and after school care programs, preschool, and summer day camp for children under age 13. The account can also be used for day care for a spouse or other adult dependent who lives with you and is physically or mentally incapable of self-care.
You can set aside up to $5,000 per household per year. You can pay your dependent care provider directly from your FSA account, or you can submit claims to get reimbursed for eligible dependent care expenses you pay out of pocket.
DOWNLOAD THE OMEGA BENEFITS APP
- View account activity & check balances
- Enter & track expenses
- File FSA claim with receipt images
- Scan or view eligible expense
Estimate carefully! You can’t change your FSA election amount mid-year unless you experience a qualifying event. Money contributed to an FSA must be used for expenses incurred during the same plan year. Unspent funds will be forfeited. If you want to participate in the FSA for 2024, you must ACTIVELY enroll!
Keep your receipts! You should keep copies of all itemized receipts when you use your Omega Benefits debit card.
