If you enroll in a Consumer-Driven Health Plan (CDHP), you can open a Health Savings Account (HSA) through HealthEquity. FBM contributes $500 annually for employee-only coverage and $1,000 annually for all other coverage tiers. You can use your HSA to pay for eligible medical, dental, vision, and prescription drug expenses.
Let’s take a look at how the CDHP and HSA work together.
This is your main health plan. It’s like typical insurance, but with a couple of key differences:
This account helps you cover those higher early costs, until you hit your deductible (and beyond):
1
FBM contributes FREE money to your HSA:
$500 (employee only coverage) / $1,000 (all other tiers of coverage) annually.
2
Pay less in monthly medical premiums than the PPO, even if you’re covering your family.
3
Enjoy tax savings* on HSA contributions, investment earnings, and withdrawals.
4
You own the HSA, so your money goes with you if you change jobs or retire.
5
Unused funds roll over every year; you can spend or save money in your HSA.
*State taxes may still apply in CA and NJ. For detailed tax implications of an HSA, please contact your professional tax advisor.
To open an HSA, you must be enrolled in a qualified high deductible health plan, such as FBM’s Low Consumer Directed Health Plan (CDHP) or High CDHP. You may not be enrolled in Medicare or claimed as a dependent on someone else’s tax return.
A CDHP and an HSA work together to help you pay for current health expenses, save for future medical costs, and you lower your taxable income. Once you meet your annual deductible, you and the plan share the cost of covered services. If you reach the out-of-pocket maximum, the plan will pay 100% of your covered expenses for the rest of the plan year. Your HSA funds can be used to cover the cost of the deductible and other eligible medical expenses.
The money you contribute to your HSA, along with any contributions made by the company, are owned by you.
FBM will contribute money to your HSA each pay period. FBM contributions are as follows:
No, the money in your account rolls over year after year. Even if you leave the company or retire, the money goes with you.
Your HSA dollars can be used to pay for qualified medical, dental, and vision expenses. Visit irs.gov/publications/p969 for a complete list of eligible HSA expenses.
You can pay for eligible expenses with your HSA debit card or you can pay cash and submit receipts for reimbursement.
Once you reach age 65, your HSA funds can be used for any type of expenses without incurring penalties.
Please remember: You will still be taxed at the ordinary income level for non-healthcare-related expenses incurred by your HSA account.
Yes, the money in your HSA can be used to pay for the eligible expenses of any family member who qualifies as a dependent on your tax return, even if they are not covered under your medical plan.
Flexible Spending Accounts (FSAs) provide a tax-advantaged way to pay for eligible healthcare and dependent care expenses. You choose your annual contribution amount, and contributions are deducted from your paycheck on a pre-tax basis. Employees enrolled in a CDHP may be able to participate in the Limited Purpose FSA and Dependent Care FSA but are not eligible for the Health Care FSA.
Reimburses eligible health expenses for you, your spouse, and your children.
2027 limit
$3,400
Covers current costs for CDHP+HSA members while your HSA keeps growing.
2027 limit
$3,400
Pre-tax dollars for childcare, after-school programs, and summer day camps.
2027 limit
$5,000*
*$2,500 if married filing separate.
The Health Care, Limited Purpose, and Dependent Care FSAs all offer significant tax advantages, but are subject to IRS regulations:
Because FSAs are “use it or lose it” accounts, you want to accurately estimate your expenses, in order to not forfeit funds at the end of the year. HealthEquity has worksheets to help you determine your estimated health care and dependent care expenses for the year. With just a little planning, you can get a more accurate picture of your health care and dependent care needs and can better calculate how much to put into your flexible spending accounts.
Health Care FSA Tax Worksheet: learn2.healthequity.com/fbm/fsa/tax-worksheet
Limited Purpose FSA Tax Worksheet: learn2.healthequity.com/fbm/lpfsa/tax-worksheet
Want to know what’s covered? Visit IRS Publication 502 and 503 for a full list of eligible FSA expenses.
FSAs are tax-advantaged accounts that allow you to set aside pre-tax contributions to pay for eligible health care and dependent care expenses.
Pre-tax contributions are dollars you allocate toward your FSA from your paycheck before federal, FICA, and most state and local taxes are withheld. Each pre-tax dollar you contribute lowers your current taxable income, so you reduce the federal income tax and FICA tax you pay. In most cases, you’ll also pay lower state and local income taxes.
If you wish to contribute to an FSA, you must enroll during Open Enrollment. Once, you enroll in an FSA, you will elect the amount of money to contribute to each of the accounts, up to IRS limits. Pre-tax dollars are then deducted from your paycheck in equal installments throughout the year. See the relevant FSA section above for maximum contribution amounts.
To continue participation in an FSA, you must re-enroll each year during Open Enrollment. Your elections and account balance do not carry over from one year to the next.
You may change your FSA contributions each year during Open Enrollment. Your plan may also allow you to change your contributions during the year if you experience a qualifying life event, such as marriage or the birth of a child.
No. IRS regulations require the accounts to operate separately. You cannot use your Health Care FSA for eligible dependent care expenses, or the reverse.
Your contributions to your FSA stop. However, until the claims filing deadline, your survivors can continue to file eligible expenses you incurred before your death.
The EPO and PPO Plans are eligible to participate in a Health Care FSA. CDHP Plans (or any plans with an HSA) are not able to enroll in an FSA.
You may use your Health Care FSA funds to pay for eligible medical expenses, such as deductibles, copays, coinsurance, prescriptions, and some over-the-counter medications, if prescribed by your doctor. For the latest information about eligible health care expenses, refer to IRS Publication 502.
You can pay for eligible expenses at the time of service with your FSA debit card. If you pay out-of-pocket, you can submit a claim for reimbursement.
Yes. You may be asked to submit supporting documentation to verify your FSA funds were used for eligible items or services.
A Limited Purpose FSA is similar to a Health Care FSA in that you can use pre-tax dollars to pay for eligible expenses. Unlike a Health Care FSA, the Limited Purpose FSA only covers eligible dental and vision expenses. Limited Purpose FSA enrollees may be eligible to participate in a Health Savings Account (HSA).
If you participate in an HSA, you are not able to enroll in a Health Care FSA. However, you may enroll in the Dependent Care and/or Limited Purpose FSA, if available.
A Limited Purpose FSA covers qualified dental and vision care expenses only, such as:
For the latest information about eligible Limited Purpose FSA expenses, refer to IRS Publication 502.
A Dependent Care FSA allows you to set aside pre-tax dollars from your pay for eligible child and/or adult care expenses so you can work.
To estimate your future expenses, first review similar expenses you’ve had over the last couple of years. Also, consider any changes to your child and/or adult care needs which may occur during the year.
It’s important to carefully estimate your expenses before you decide how much you want to contribute to the Dependent Care FSA each year. Be conservative in your estimate since you forfeit (lose) any unused balance by the claims filing deadline. On the other hand, if your expenses exceed the amount you contribute to the FSA, you miss out on some tax savings.
Eligible Dependent Care FSA expenses include:
For the latest information about child and dependent care expenses, refer to IRS Publication 503.
You may submit claims to your FSA for eligible expenses incurred before your participation ended up until the claims filing deadline in the following year. You cannot continue to make Dependent Care FSA contributions after you leave the payroll.
Limited Purpose FSA Tax Worksheet
IRS Publication 502IRS Publication 503IRS Publication 969
