What Qualifies for Short Term Disability: How Does It Work and Who is Eligible?
Understand the role of short-term disability in protecting you from income loss during illness or injury, and how the benefits are calculated.
2020 FSA and HSA Contribution Limits
The health FSA and HSA contribution limits increased once again for 2020, allowing you to save more pretax dollars for qualifying medical expenses.
The IRS has announced the 2020 contribution limits for flexible spending accounts (FSA) as well as limits for health savings accounts (HSA) for those with a qualifying high deductible health plan (HDHP). For 2020, the health FSA contribution limit is $2,750 (an increase of $50 from 2019), and HSA limits are $3,550 for self or $7,100 for family. The Dependent Care FSA contribution limit will remain at $5,000 for 2020.
What is a Flexible Spending Account (FSA or Flex Spending)?
Flexible spending allows participants to set aside pre-tax dollars to apply to the upcoming calendar year’s out-of-pocket expenses related to eligible medical, dental, vision, pharmacy and dependent care. The major advantage to enrolling in FSA is lowering your taxable income.
How much money rolls over year-to-year with a Flexible Spending Account?
Per IRS guidelines, up to $500 of any unused dollars left in your FSA account at the end of the year can be rolled over and used in the subsequent year for eligible expenses. The rollover amount does not count towards the annual election limit of $2,750. Any unused amount in excess of $500 will be forfeited.
When can I enroll in a Flexible Spending Account?
Open enrollment is the only time, barring qualified life events, when eligible employees can enroll in FSA benefits for the upcoming calendar year. Flex spending dollars can be used in addition to other insurance plans. Open enrollment has an effective date of January 1, 2020.
Click here to see the comprehensive IRS list of qualifying FSA expenses.
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is another way to save pre-tax dollars for eligible expenses. However, you must also be currently participating in a Qualified High Deductible Health Plan (HDHP) to have an HSA.
How is a Health Savings Account (HSA) similar to a Flexible Spending Account (FSA)?
Both an HSA and an FSA lower your taxable income and are used to pay for eligible health care expenses.
How is a Health Savings Account (HSA) different from a Flexible Spending Account (FSA)?
An HSA differs from an FSA in multiple ways. HSAs have a higher maximum annual contribution ($3,550 for the year 2020), and the money in your account accrues from year-to-year like a bank account and earns interest. In other words, if you don’t use it, you don’t lose it. FSA funds are on a use-it-or-lose-it basis.
You can change your HSA contribution throughout the calendar year, whereas FSA dollars must be elected only during open enrollment. HSA dollars can only be used after they've been funded, whereas an FSA balance is available in its entirety (for most plans/services) at the beginning of the year.
Can I enroll in both an FSA and an HSA?
If you participate in an HSA, you can only participate in an FSA if it’s a limited-purpose FSA, meaning it can only be used for dental and vision expenses (i.e. not medical expenses).
For more information about FSAs, HSAs, open enrollment, or any other benefit-related question, please contact our benefits team at benefits@stratus.hr.
The 2020 contribution limits for FSAs and HSAs have increased again to keep up with inflation.