Health Savings Accounts vs. Flexible Spending Accounts

Benefit eligible employees have two options to elect to have pre-tax dollars be deducted from their paychecks to cover unreimbursed qualified medical, dental, prescription and vision expenses. A Health Savings Account (HSA) managed by the Public Employee’s Benefits Program (PEBP) and administered by Healthscope and a Flexible Spending Account (FSA) administered by ASIFlex.

2019 Limits
HSA Individual Coverage $3,500
HSA Family Coverage $7,000
HSA Over 55 years of age additional contribution $1,000
Medical FSA Account $2,700
Limited Scope FSA Account $2,700
Dependent Care FSA Account $5,000

Health Savings Account (HSA)

PEBP offers Health Savings Accounts to participants of the Consumer Driven Health Plan (CDHP-PPO). An HSA is a tax free account used to pay for qualified medical expenses in conjunction with a High Deductible Health Plan.

Once signed up for the CDHP-PPO, participants will be provided a tax-free contribution(s) or “seed money” into the HSA to help offset out of pocket high deductible expenses.  A Healthscope HSA debit card with a VISA logo will be provided to use to pay out-of-pocket expenses. Any qualified medical or prescription expense will count toward the annual CDHP-PPO deductible.

If not eligible for an HSA, employees on the CDHP-PPO plan are automatically enrolled in a Health Reimbursement Arrangement (HRA). This account will also receive the tax-free contribution(s) or “seed money”. As the HRA is owned by PEBP, participants are not eligible to set aside extra pre-tax contributions.

Fiscal Year 2019-2020 Tax-free Contributions from PEBP
Base Contribution (Based on a 7/1 hire date) $700
Per Dependent (maximum 3) (Based on a 7/1 hire date) $200

**Participants and covered dependent(s) enrolled in the CDHP on August 1st or thereafter will receive a pro-rated amount for the remainder of the plan year.

Requirements

  • Participants have to be enrolled in a qualified high deductible health plan.
  • Participants must not have other medical coverage.
  • Participants cannot be claimed as a dependent on someone else’s tax return.

Benefits

  • Receive tax-free contributions from PEBP.
  • Account owned by employee.
  • Eligible to voluntarily contribute pre-tax dollars any time in the year.
  • Changes to voluntary contributions can be made any time in the year.
  • Funds carry over from one year to the next (no “use-it-or-lose-it” provision).
  • Funds grow tax-deferred.
  • Able to use Healthscope VISA card to pay for qualified eligible purchases directly from the HSA account.
  • Funds are portable – if employment ends, any existing funds in the HSA stay with participant.

Limitations

  • Voluntary contributions are made available only after deducted from a paycheck.
  • Not available for HMO participants.
  • Not available for Medicare participants.
  • Reimbursements must be submitted to Healthscope within a year of the date of service.

Medical Flexible Spending Account (FSA)

Flexible Spending Accounts are offered to any benefit eligible employee, regardless of accepting the medical insurance or not.

The Medical FSA provides participants the opportunity to have funds deducted on a pre-tax basis to cover out-of-pocket medical, dental, prescription and vision expenses, including certain over-the-counter medications.  Similar to the HSA, the FSA comes with a debit card to pay for qualified medical expenses.

For employees enrolled in the CDHP-PPO plan with an HSA, the University offers a Limited Scope FSA that allows participants to have deducted pre-tax funds for dental and vision expenses only.

For employees enrolled in the CDHP-PPO plan with an HRA, the University allows enrollment into the Medical FSA used to cover out-of-pocket medical, dental, prescription and vision expenses, including certain over-the-counter medications. 

Benefits

  • Available to any benefit eligible employee (HMO and PPO).
  • Available to employees who actively decline the health insurance.
  • Full year elected amount of funds are made available immediately after enrollment.

Limitations

  • Enrollment in FSA makes participants ineligible for a Health Savings Account.
  • Enrollment in FSA is only available during open enrollment or within 60 days of hire/qualifying event.
  • Changes cannot be made during the plan year, unless there is a qualifying event.
  • FSA is a use-it-or-lose it product. Must use funds before end of employment or end of plan year (6/30).
  • There is a small administration fee of $3.25 per month to participate in the FSA account.
  • Reimbursements claims must be submitted within 90 days of employment ending or during the grace period.  The grace period is the 90 days after the end of the plan year, and allow you to submit reimbursement claims for expenses incurred in the previous plan year.

Dependent Care Flexible Spending Account (FSA)

The Dependent Care FSA provides participants the opportunity to have funds deducted on a pre-tax basis for dependent care expenses for eligible dependents.

Benefits

  • Use pre-tax dollars for child care or preschool tuition expenses.
  • Use pre-tax dollars for elder care expenses.

Limitations

  • No debit card available. All reimbursements must be submitted to ASI Flex.
  • Funds are only made available after the funds are deducted from paycheck.
  • There is a small administration fee of $3.25 per month to participate in the FSA account.
  • Dependent Care is a use-it-or-lose-it account. Funds must be used before end of plan year (6/30).