Pre-tax money for health care needs? Everyone has time for that
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are benefits worth looking into. These accounts offer you the opportunity to put aside money on a pre-tax basis to use for health care needs or dependent care needs for the year.
HSAs are part of the Purdue Health Plan Plus HSA 1 and Purdue Health Plan Plus HSA 2. Additionally, the limited purpose health care flexible spending account is available to those enrolled in Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2 plans.
Let’s take a look at how an FSA and / or HSA might work for you:
Health Care Savings Accounts: FSA and HSA
The interactive health care account tool provided through PayFlex – the company that manages Purdue’s HSA and FSA accounts – is a great way to see how your account can work for you.
The PayFlex tool walks you through how health care accounts work. Pete the pig asks you a variety of questions to help him help you learn more about and how much you should set aside in your respective FSA or HSA. Once you’ve had a chance to use the interactive tool, there are additional resources at your fingertips.
Participating in one of Purdue's two 2017 high-deductible medical plans qualifies employees for a health savings account (HSA); however, IRS rules may cause an employee to be ineligible for an HSA or may affect the tax status of the employee's account.
If you have an HSA or are thinking of participating in one for 2017, the HSA Interactive Tool is a good place to start.
The Frequently Asked Questions section on the Benefits website has information you should review. The information is designed to give you a basic concept of how medical plans with HSAs function and will be helpful to you as you decide if you should set aside money and/or how much money to set aside.
The IRS has set limits on how much can be contributed to your HSA each calendar year. The annual limits include both Purdue's contributions and your own contributions. It's your responsibility to be sure your combined contributions do not exceed IRS limits.
In 2017, the maximum HSA contribution if you are covered with employee-only medical insurance is $3,400. The limit if you have medical coverage for yourself plus one or more family members is $6,750. If you are an employee age 55 or older, you may contribute an additional $1,000 in 2017. These limits are for Purdue’s contributions and your contributions combined. You are responsible for ensuring that you and your spouse (if applicable) do not over-contribute to your combined HSA accounts. If you do over-contribute, you will have to account for this on your annual tax return.
In 2017, the maximum FSA contribution will increase to $2,550. For claims with dates of service in 2016, you’ll have until March 31, 2017, to file claims to PayFlex, Purdue’s FSA administrator. Payflex continues to be required to collect documentation to support your claims. If you don’t provide supporting documentation by Dec. 1, 2016, to prove you’re paying for an eligible FSA expense, the transaction amount will be added to your 2017 W-2. PayFlex notifies employees who use their PayFlex FSA debit cards and need to provide documentation.