Stretch your health care dollars with a personal spending account
A personal spending account paired with your Concordia Health Plan option makes it possible for you to use tax-free dollars to pay for eligible medical, prescription, dental, vision and dependent care expenses. There are three types of PSAs – health savings account, health reimbursement arrangement and flexible spending account (medical and dependent care).
What’s the benefit of a PSA?
PSAs offer tax advantages that can help keep more money in your pocket. The money is contributed pre-tax (although post-tax contributions can be made), and withdrawals are always tax free if used for eligible expenses.
Health savings accounts allow balances to accumulate and earn interest year over year, providing investment opportunities that can grow your account and be used towards your retirement.
PSAs help you budget and save dollars to cover major care needs, everyday care or dependent care costs.
Pairing your health plan option with an HSA, HRA and FSA can put you in the driver's seat when it comes to making decisions about how much you want to pay for your health care.
What are the types of Personal Spending Accounts?
A health savings account is a tax-advantaged account for you to use to pay qualified medical expenses, today or in the future. Money going in is tax-free, but money coming out including earnings on investments is also tax free, as long as used for qualified medical expenses. HSAs are able to be rolled over from year to year, and therefore can be used in retirement for medical expenses as well.
Contribution Limit:
For 2020: $3,550 for individuals, $7,100 for families. HSA holders 55 and over can contribute an extra $1,000.
HSAs are available with:
Option HDHP
Choice 1500
Choice 2000
Choice 3000
Whole Health 2000
Healthy Me B (BCBS, Cigna, UMR)
Healthy Me C (BCBS, Cigna, UMR)
A health reimbursement arrangement is a tax-advantaged account established and funded entirely by your employer for you and your dependents’ qualified health plan expenses.
Available with all health plans.
A flexible spending account is a tax-advantaged account where your contributions are used toward qualified medical or dependent care expenses depending on the type of FSA. FSAs are generally use it or lose it plans. This means that amounts in the FSA at the end of the plan year generally cannot be carried over to the next year. Additionally, if an accountholder leaves an employer or retires, unused funds are forfeited. However, the plan can provide for either a grace period or a carryover.
Dependent Care FSAs allow employees to make pre-tax payroll contributions to pay for dependent care expenses. To qualify, the dependent must be under age 13 or fully disabled and the care must be essential for the employee and a spouse (if applicable) to work, look for work or attend school full-time. Funds are only accessible as they are deposited with each payroll deduction and employees pay for dependent care costs out-of-pocket then submit documentation for reimbursement.
Current Contribution Limits
Medical FSA 2020: $2,750 on employee contributions. Employer contributions are not counted against the maximum. If an employee is married, each spouse may contribute up to $2,750 to his or her own FSA, even if both participate in the same FSA plan sponsored by the same employer.
Dependent Care FSA 2020: The maximum annual DCRA contribution allowed is $5,000 per household.
FSAs are available with all plans.
Members
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Medicare and HSAs
Are you at or approaching age 65 and currently contributing to a health savings account? Be aware that enrolling in Medicare or receiving Social Security benefits ends your eligibility to contribute to an HSA. Contact your employer right away if this
applies to you.
Questions? Contact the Concordia Plans Health Services Team at 888-927-7526, ext. 6002 or Contact Us.