Personal Spending Accounts
Put more money in your workers’ pockets by offering personal spending accounts
Personal spending accounts offer great financial advantages for your workers to help them budget and save for everyday health care and dependent care costs, while also providing tax advantages that let your workers keep more money in their pockets. These financial accounts can help to offset worker costs for lower-premium plans, while still helping you to be mindful of the costs to your ministry.
Health savings accounts are medical savings accounts that can be paired with health savings account compatibles health plan options. HSA balances automatically roll over from year to year, so that workers can use the account to pay this year's expenses or save it for the future. You can determine if you want to make a contribution to your worker’s HSA to help them with their qualified expenses.
Health reimbursement accounts are funded by you to help workers pay for certain out-of-pocket medical, dental and vision expenses. It’s a great way to ensure that you help cover your workers’ medical expenses that come up while providing an affordable health care plan to your ministry.
Flexible spending accounts for medical expenses will help workers pay for qualified medical expenses, but the funding is use-it-or-lose it and is forfeited if not spent by the end of the plan year.
Flexible spending accounts for dependent care expenses cover dependent care costs including daycare, nursery school and day camp for eligible children, as well as for adult dependents who need care.
When you offer PSAs to your workers, you:
- Provide financial support and tax-advantages for your ministry and workers when combined with a lower-cost medical plan and premiums. Contributions through payroll deductions result in FICA and income tax savings for most employers.
- Protect your workers’ finances, giving them a greater peace of mind.
- Round out the benefits you offer, improving recruitment and retention of your workers.
- Offer great features including direct deposit, debit card access, online account management and even automatic bill payment.
PSAs are offered through Further, Kaiser Permanente and the Lutheran Church Extension Fund.
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What's the difference between and HSA, HRA, and FSA?
|What is it?||An HSA is a tax-advantaged account used to pay qualified medical expenses for the account holder and dependents.||An HRA is a tax-advantaged account established and funded entirely by the employer for its workers’ and their dependents’ qualified health plan expenses.||An FSA is a tax-advantaged account usually offered as part of a Cafeteria Plan. Funds can be used toward qualified medical or dependent care expenses depending on the type of FSA.|
|What is eligible?||Medical expenses according to Internal Revenue Code Section 213(d). Visit irs.gov for a list of eligible and ineligible expenses.||Health plan eligible expenses (copays, deductibles, coinsurance) as directed by the employer.||
Medical FSA: Medical expenses according to Internal Revenue Code Section 213(d).
Dependent care FSA: Dependent care expenses according to Internal Revenue Code Section 129.
|Who owns the account?||Worker.||Employer.||Employer.|
|CHP Option compatibility?||Option HDHP, Healthy Me HSA A, Healthy Me HSA B, Healthy Me HSA C, Healthy Me HSA D, Healthy Me HSA E and Whole Health 2000.||Can be used with any health plan option.||
Can be used with any health plan option.
Note: Kaiser Permanente will not administer an FSA paired with Whole Health 2000.
|Who contributes?||Generally, the worker. This account is typically funded by the worker, although the employer can contribute as well.||Employer only.||Generally, worker. This account is typically funded by the worker, although the employer can contribute as well.|
|Balance rolls over?||Yes. The balance does roll over from year to year.||Employer decision. Money in the account at the end of the year can be rolled over if the employer designates.||No. If money is not used by the end of the year, the remaining dollars are forfeited to the employer, unless the employer elects to allow a rollover of up to $500 in funds.|
|Portable?||Yes. The account is fully portable.||Employer decision. The employer can allow terminated workers to spend remaining funds in the account.||No. The account is not portable if the worker leaves the organization.|
|Investment opportunities?||Yes. The account can earn interest. Workers also may invest a portion of their account dollars when the balance reaches a designated threshold. Several investment options are available.||No.||No.|
|Who holds the funds until a claim is received?||In the member’s account with the administrator (e.g., Further or Kaiser Permanente).||Employer.||Employer.|
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