Non-State Agency & Higher Education Employees

Employees working for a non-state agency and the Nevada System of Higher Education will need to contact their human resources benefits office for information about the availability of Flexible Spending Accounts offered by their employer.

What is the FSA? Does it have anything to do with the HSA or HRA?

Non-state and NSHE employees are ineligible for the PEBP sponsored FSA but may be eligible through a similar program offered by their employer. The HealthCare FSA is a tax-free account that allows a person to pay for essential health care expenses that are not covered or are partially covered by your medical, pharmacy, dental and vision plans. The FSA plan year is July 1 through June 30 of the following year. Flexible Spending Account open enrollment is usually held in May each year. To participate in an FSA, you must enroll during open enrollment each year for the upcoming plan year, within 60 days of your hire date, or during certain qualifying life events. For more information regarding FSAs contact UMR at 1-888-763-8232.

The FSA is a use it or lose it account and the HSA/HRA rolls over from year to year, month to month. The FSA allows for a limited amount of funds to roll over from year to year.

An HSA is a Health Savings Account that also receives tax-free contributions from PEBP but also allows the participant to make voluntarily contributions to their HSA through pre-tax payroll deductions. If you leave State service, the money will stay with you until it is spent by you. Not everyone is eligible for an HSA.

An HRA is a Health Reimbursement Arrangement with only PEBP contributions. You are not eligible to make your own contributions to this account. If you leave State service, this money will revert to the State. Everyone enrolled in the CDHP PPO plan is eligible for an HRA.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), Health Savings Account (HSA), HMO, LD

What is a Medical Flexible Spending Account (Medical FSA)?

The Medical FSA is a tax-advantaged account that allows employees to set aside a portion of earnings to pay for qualified health care expenses that are not paid by insurance (i.e. copayments, deductibles, and coinsurance). An FSA may also be used to pay for things like prescription eyeglasses and Lasik surgery. Generally, allowable items are the same as those allowed for the medical tax deduction.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, & LD

What is a Limited Purpose Flexible Spending Account (Limited Purpose FSA)?

The Limited Purpose FSA is a tax-advantaged account that allows employees to set aside a portion of earnings to pay for out-of-pocket dental and vision expenses. Employees who contribute to an HSA may also elect the Limited Purpose FSA. For more information, contact UMR at 1-888-763-8232.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, & LD

What is a Dependent Care Flexible Spending Account (Dependent Care FSA)?

A dependent care FSA provides a way to pay dependent care expenses and lower your taxable income. You direct part of your before-tax pay into a special account to pay work-related dependent care costs. You can use your account throughout the year to help pay for eligible expenses. Your expense must be for the purpose of allowing you and, if married, your spouse to be employed. Members can enroll in an FSA during a new hire event, open enrollment, or during a qualifying life event. For more information, contact UMR at 1-888-763-8232.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, LD

How may I use a Flexible Spending Account (FSA) to offset costs for orthodontic services?

A flexible spending account is a financial account you put money into that you can use to pay certain out-of-pocket healthcare and dependent care costs. You don’t pay taxes on this money. With an FSA, you can set aside up to $3,050 in pre-tax wages during PY24 for out-of-pocket medical expenses. The amount limits are subject to change annually. Depending on your tax bracket the tax savings could cover from 18 to 35 percent of the cost. What many people don’t know is that your FSA funds can help offset the high cost of orthodontic services as well.

Single Year Savings Comparison

 

Without an FSA:
$212.50 Monthly budget for orthodontic expenses
– $46.75 Taxes deducted on $212.50 (federal tax rate of 22%)
$165.75 Amount left for out-of-pocket orthodontic expenses

With an FSA:
$212.50 Monthly FSA deposit for orthodontic expenses
– $0.00 Taxes deducted on $212.50
$212.50 Amount left for out-of-pocket orthodontic expenses

Annual Savings (Example):
$46.75 x 12 = $561
Use $561 towards orthodontic expenses from income tax savings using a flexible spending account.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD FAQs

Is there a cost to participate in the FSA?

You pay a small administration fee of $3.15 per month to participate in either one or both (medical and/or dependent care) flexible spending accounts.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD

What are the risks of participating in a health care or dependent care FSA?

FSA dollars are “use-it-or-lose-it” funds. For PY24, account balances greater than $610 cannot be carried over into the following plan year for Health Care and Limited Purpose FSAs. For dependent care FSAs, $0 can be carried over to the next plan year, so it is important to only contribute what you know you will use. If you have any unused funds exceeding the limit at the end of the plan year (end of grace period), those funds will be forfeited per IRS requirements.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD FAQs

If my spouse has a Medical Flexible Spending Account, am I eligible to contribute to an HSA?

No. If your spouse has a Medical Flexible Spending Account you are disqualified from establishing and/or contributing to an HSA.

Categories: CDHP with HSA or HRA, Flexible Spending Account (FSA), Health Savings Account (HSA)

How are HSA withdrawals monitored? Is there an expense verification process like an FSA or HRA?

Verification of expenses is not required for HSAs. However, total withdrawals from your HSA are reported to the IRS on Form 1099-SA. You are responsible for reporting qualified and non-qualified withdrawals when completing your taxes. You are also responsible for saving all receipts as verification of expenses in the case of an IRS audit.

Categories: CDHP with HSA or HRA, Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), & Health Savings Account (HSA)