Employees who participate in Cigna Option 1 qualified High Deductible Health Plan (HDHP) may be eligible to set aside money in a Health Savings Account (HSA). The money you contribute to an HSA is exempt from taxes; you save FICA and Federal taxes when contributing through payroll, and you spend the money tax-free when you spend it on qualified expenses. Qualified expenses include unreimbursed medical, dental, and vision expenses incurred by you and your eligible dependents – even if you don’t cover your dependents. The money in your HSA remains in your HSA until you’re ready to spend it; there’s no time limit. If you change jobs or retire, you take the HSA with you. HSA funds can also be spent on Medicare, Cobra, and Long Term Care insurance premiums.
Who is eligible to open and fund an HSA?
Anyone who is:
- Covered by a qualified HDHP Plan Option 1; and
- Not covered under another medical plan that is not a qualified HDHP
- Including Medicare, Medicaid, TriCare, VA, and/or a Health Care Flexible Spending Account (FSA)
Does Associated Packaging contribute to the account?
Yes, Associated Packaging matches employee contributions up to $50/month up to $600 per year!
How much can I contribute to an HSA?
The IRS sets a contribution limit every calendar year. The limits include any contributions made by Associated Packaging.
Does the money in my account draw interest?
The regular account will draw a small amount of interest similar to a standard checking account. However, you can move a portion of your contributions into an investment account where you can invest in mutual funds as well as individual stocks. Any gains to your account grow tax-deferred.
What happens if I am no longer enrolled in the High Deductible Health Plan in the future or your employment ends?
All funds remain in the account and you can continue to use the funds accumulated to pay for eligible health expenses.
You have the opportunity to pay for out-of-pocket Dependent Care expenses with pre-tax dollars through the Dependent Care Flexible Spending Account (FSA). A Dependent Care FSA is used to reimburse work-related expenses; while you or your spouse work, look for work or attend school full-time or are physically unable to care for your dependent. Eligible children are under age 13, or a dependent who is physically or mentally not able to care for themselves. Eligible expenses include a nanny, nursery school, before care/aftercare, late pick-up fees, day camp, or daycare. Your Dependent Care contribution is not pre-loaded to a debit card; you can only access what has been payroll deducted and is in your DCFSA account.
- The IRS sets a contribution limit every calendar year. Contributions to your DCFSA come out of your paycheck before any taxes are taken out. This means that you don’t pay federal income or FICA taxes on the portion of your paycheck you contribute to your DCFSA.
- You should contribute the amount of money you expect to pay out-of-pocket for eligible expenses incurred during the Plan Year. If you still have money in the account at the end of the Plan Year (June 30, 2024), you will have a 2.5-month extension period to incur additional eligible expenses. Any money remaining in the account when the extension period ends on September 15, 2024, is forfeited; this is the “use-it or lose-it” rule.
- Do your homework and consider known expenses. Make an informed decision when you elect your contribution for the year. Dependent Care FSA elections can only be changed during Open Enrollment or due to a Qualifying Event.
