FLEXIBLE SPENDING ACCOUNT (FSA)
HEALTH SAVINGS ACCOUNT (HSA)
What is an HSA? If you enroll in the HDHP, you can use a health savings account (HSA) to pay medical, prescription drug, dental and vision expenses not covered by your Averitt plans with tax-free dollars. To be eligible for the HSA, you must not be enrolled in any other insurance coverage except for a qualified HDHP.
Four advantages of an HSA
What is an FSA? A flexible spending account (FSA) allows you to set aside money from your paycheck to pay health care or dependent care expenses with tax-free dollars. If you choose to participate in the Health Care or Dependent Care FSA, you must re-enroll every year. Who is eligible? Associates enrolled in the THP can participate in a Health Care FSA and a Dependent Care FSA. Associates enrolled in the HDHP can participate in the Dependent Care FSA only. Associates not enrolled in either of our medical benefits are eligible for both FSAs. Four advantages of an FSA 1. LOWER TAXES The amount you choose to contribute is deducted from each paycheck before income taxes and Social Security taxes are calculated. This reduces the amount of taxes you pay. 2. ABILITY TO PAY EXPENSES WITH TAX-FREE DOLLARS As you have eligible expenses, you can be reimbursed from your accounts with tax-free dollars. 3. HEALTH CARE FSA FUNDS AVAILABLE IMMEDIATELY The total amount you choose to contribute to your Health Care FSA is available at the beginning of the year. You can spend the dollars in your Dependent Care FSA as they are deposited each pay period. 4. $500 ANNUAL ROLLOVER IN HEALTH CARE FSA You can roll over up to $500 in unused funds in your Health Care FSA at the end of the year if you re-enroll for the following year. The Dependent Care FSA is a use-it-or- lose-it account.
ANNUAL CONTRIBUTION LIMITS
ELIGIBLE EXPENSES
ACCOUNT
1. IT’S FREE MONEY The company will contribute $10 per week if you choose individual coverage or $20 per week if you enroll with family members. 2. IT’S CONVENIENT Use your HSA now, or save it for later – even for health care expenses after you retire. The money in your HSA belongs to you. It rolls over each year, and you can take it with you if you change jobs.
Medical, dental and vision expenses, including glasses, contact lenses, prescription medications and orthodontia Day care for children under age 13 or elder care expenses so you and your spouse can work or attend school full time
• $2,850 per year • Minimum:
Health Care FSA
$5 per week
• $5,000, or $2,500 if
WEEKLY AVERITT CONTRIBUTION
married and filing separate tax returns
Dependent Care FSA*
ASSOCIATE ONLY
$10.00
ASSOCIATE + SPOUSE
$20.00
• Minimum:
3. IT OFFERS TRIPLE TAX ADVANTAGES • Pay no taxes on money you contribute • Pay no taxes on interest you earn • Pay no taxes when you withdraw money
$5 per week
ASSOCIATE + CHILD(REN)
$20.00
EXAMPLE **
With FSA Without FSA
FAMILY
$20.00
$50,000
$50,000
Your taxable income
4. IT ALLOWS YOU TO CONTRIBUTE TOO You can make additional pre-tax contributions to your HSA through payroll deductions. Total Averitt and associate contributions combined cannot exceed these annual IRS limits in 2023: • $3,850 for single coverage • $7,750 for family coverage If you are age 55 or older, you can make an additional $1,000 catch-up contribution.
Pre-tax contribution to the Health Care FSA and the Dependent Care FSA
$2,000
$0
Federal and Social Security taxes*
$15,696
$16,350
After-tax dollars spent on eligible expenses Spendable income after expenses Savings with the Health Care FSA and the Dependent Care FSA
$0
$2,000
$32,304
$31,650
$654
N/A
*The Health Care FSA can be used to pay for eligible medical expenses for yourself, your spouse and any dependents you claim on income taxes. The Dependent Care FSA can be used for nonmedical child care (under age 13) and elder care. **This is an example only and may not reflect your actual experience. It assumes a 25% federal income tax marginal rate and a 7.7% FICA marginal rate. State and local taxes vary and are not included in this example. However, you will save on any state and local taxes as well.
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