RCA Benefit Guide

Health Savings Account (HSA)
A Health Savings Account (HSA) is an individually owned tax-advantaged savings
account. By contributing to an HSA, you reduce your taxable income and increase
your take-home pay. You can use your account to pay for qualified health care
expenses for you, your spouse and your tax dependents. The money in your HSA is
yours to keep. You must be enrolled in a qualified High Deductible Health Plan
(HDHP) to open an HSA.
WHAT DO PEOPLE LOVE ABOUT THE HSA?
• Tax savings—Contribute pre-tax dollars and reduce your taxable income
• Tax-free earning—Money you keep in your HSA can earn interest tax free
• Tax-free spending—Money you take from your HSA to pay for qualified health
care costs is never taxed
• You own your HSA—Your HSA stays with you, even if you switch employers,
change health plans or retire
• There’s no use-it-or-lose-it policy—Unused funds roll over from year to year
• It’s an investment—Your HSA is a savings account that can earn interest. It’s
a terrific way to put money away for health care costs down the road, even in
retirement. After you build up a certain amount, you may have investment
options
CONTRIBUTION LIMITS
Contribution limits are adjusted annually. For
2018 the maximum that can be contributed
into an HSA is $3,450 for individual coverage
and $6,900 for family coverage. The sum of
all contributions for a calendar year (from all
sources; i.e., yourself or your employer) must
not exceed the IRS contribution limits.
Individuals and spouses covered under an
HDHP between the ages 55 and 65 can make
“catch-up” contributions up to an additional
$1,000 per year.
Flexible Spending Account (FSA)
A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows
you to use pre-tax income to pay for qualified expenses for you, your spouse, and
your eligible dependents. Since your contribution is set aside before taxes are
calculated, you effectively decrease your taxable income, which may allow you to
actually increase your spendable income. You do not need to be enrolled in a
medical plan to qualify.
HEALTH CARE FLEXIBLE SPENDING ACCOUNT (HCFSA)
Health care flexible spending accounts (HCFSA) allow you to pay for everyday,
routine medical expenses such as copays, deductibles, prescriptions, dental
services and vision care. Certain over-the-counter (OTC) products are also eligible
for reimbursement such as bandages, sunscreen, thermometers and much more.
OTC medications are eligible for reimbursement with a prescription from your
physician. Visit http://fsastore.com for a list of OTC eligible products. Another big
advantage of the HCFSA—employee contributions are available on the first day of
the plan year.
DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT (DCFSA)
A dependent care flexible spending account (DCFSA) is a pre-tax benefit account
that can be used to pay for dependent care services such as preschool, summer
day camp, before or after school programs, baby sitters, and child or adult daycare,
so that you and your spouse can work or attend school full-time. You can use your
DCFSA funds during the plan year as long as the funds are in your account.
FUNDING YOUR FSA
Calculate your annual reimbursable expenses.
Take into consideration what your out-ofpocket
expenses will be during the upcoming
plan year for you and your dependents.
Note: Once you make your election, you will not be able
to change your deduction during the plan year. However,
if you experience a qualifying life event you may be
permitted to change your election.
The maximum that can be deducted for the
HCFSA is $2,650 per tax year. At the end of
the plan year your HCFSA allows you to carry
over up to $500 into the following plan year.
Funds exceeding $500 at the end of the plan
year are forfeited*.
The maximum for DCFSA is $5,000 per tax
filing ($2,500 if married and filing separate tax
returns). Any unused funds that remain in
your DCFSA will be forfeited* at the end of the
grace period.
*As a result of the “use it or lose it” rule, it is important
for you to determine the actual costs you expect to incur
during the course of the plan year.
10 | 2018 Recovery Centers of America Benefit Guide