HSA and FSA
Health Savings Account (HSA)
A health savings account (HSA) is a personal healthcare bank account that you can use to pay out-of-pocket medical expenses with pre-tax dollars. When you participate in a qualified high deductible health plan (QHDHP), you are eligible to open an HSA. Your Health Savings Account:
- Allows you to make payroll deposits with pre-tax dollars.
- Grows tax-free.
- Can be used to pay qualified expenses now and in the future.
- Is your account and goes with you if you leave The Sample Company for any reason.
- Is subject to IRS contribution limits.
Enjoy Triple Tax Advantages with your HSA
With a health savings account, you enjoy triple the tax advantages because contributions are tax-free, investment earnings are tax-free; and withdraws for qualified medical expenses are tax-free. Enjoy triple tax advantages:
- Contributions are tax-free.
- Investment earnings are tax-free.
- Withdrawals for qualified medical expenses are tax-free.
Flexible Spending Account (FSA)
A great way to plan ahead and save money over the course of a year is to participate in a flexible spending account (FSA). An FSA lets you redirect a portion of your salary on a pre-tax basis into a reimbursement account.
- Healthcare FSA – Money from this account can be used to pay qualified medical, dental, and vision expenses. Each year that you would like to participate in the FSAs, you must elect the amount you want to contribute. Funds in the healthcare FSA are available at the beginning of the plan year and can be used for your expenses and those of your spouse and dependents, even if you and your family aren’t covered by our plan. If you are contributing to an HSA, you cannot also contribute to a healthcare HSA.
- Dependent Care FSA – Dependent Care FSAs allow you to set aside money pre-tax to pay eligible out-of-pocket day care expenses so that you or your spouse can work or attend school full-time. You must contribute money through payroll deduction to your dependent care FSA before you can spend it.
- Limited Purpose FSA – A limited purpose health FSA is much like a general health FSA. The main difference is that the limited purpose account is set up to reimburse only eligible FSA dental and vision expenses. A limited purpose health FSA allows you to continue to contribute to an HSA.