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 Aetna HSA Medical Plan (HDHP), a Health Savings Account (HSA) through Inspira will be automatically created for you which will allow you to put aside money on a tax-free basis to pay for current deductible and other out-of-pocket medical expenses and save for future qualified medical expenses. 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 prescriptions and COBRA premiums. Unused monies grow tax free and roll over from year to year from active employment into retirement.
Perks of a HSA:
Your HSA account is set up automatically after you enroll in the HDHP (you must enroll even if you do not want to contribute). Veritext will contribute to your account to help offset your out-of-pocket costs under the plan or build health care savings for the future. See below for a breakdown of contributions.
Veritext HSA Contribution Amounts:
*Veritext makes quarterly contributions on 1/1, 4/1, 7/1 and 10/1; you must be actively enrolled in the plan on those dates to receive the contribution.
**Those participants age 55 and older can contribute an additional $1,000 as a catch-up contribution.
How the High Deductible Health Plan with HSA works:
- When you enroll in the HSA medical plan, an Inspira HSA will automatically be created for you.
- You will receive a welcome packet in the mail 7-10 business days after enrollment which will include your MasterCard debit card and instructions for what to do next.
- Your debit card provides access to use the funds in the account to pay for any qualified medical expenses.
- Unused funds will accrue interest on a tax-free basis which roll over from year to year.
- Participants have 24/7 account access available online and toll-free as well as on the Inspira mobile app.
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.
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 $3,300, 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.
Please note:
- HSA participants can only participate in the Limited Purpose FSA and/or Dependent Care FSA.
- FSA funds are “use it or lose it” in the calendar year — Funds must be used by March 15 of the following year in order to receive reimbursement.
- All FSAs are administered by PayFlex.
Click HERE to explore the list of eligible, potentially eligible, and ineligible FSA 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 eligible childcare or elder care expenses. This program is administered by Inspira.
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 childcare, 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. The amount you elect is deducted from your paycheck pre-tax and stored in your individual FSA until you need it. You pay your dependent care provider directly out of pocket and then submit your claim to Inspira to get reimbursed for eligible dependent care expenses.
Commuter Benefits
Commuter benefits allow you to put money from your paycheck aside each month, before taxes are taken out, for qualified commuting and parking expenses to and from work.
This program is administered by Sterling Administration.
What does it cover?
Commuter funds can be used on a variety of transportation and parking expenses that allow you to travel to and from work. Eligible modes of transportation include but aren't limited to:
- Train
- Bus
- Subway
- Ferry & Van Pool (must seat at least 6 adults)
- Parking or parking meter near employment
Once you enroll in the Commuter Benefits program, you will receive a debit card. If you elect the Healthcare FSA plan, you will use the same debit card for both benefits.
Availability of funds: Your funds become available as you contribute to the plan, generally within 2-3 days after your payroll contribution.
Contribution changes: You can adjust the amount you contribute to the plan each month at any time. No qualifying event is needed.
Rollover and use-or-lose: The commuter plan is flexible and your funds will continue to roll over month to month until the funds are used. However, your funds will no longer be available if you terminate employment.
The 2025 IRS sets the maximum dollar amount you can set aside each month as part of your commuter benefit. Federal income tax and FICA taxes are not imposed on amounts set aside. Depending on state law, employees may also avoid state and local income taxes. The monthly pre-tax contribution limit is:
Transit: $325/month
Parking: $325/month
Any money contributed to your transit or parking benefit rolls over every month until it is used or you are no longer eligible.
