Overview
You can save money on your health care expenses by enrolling in and contributing pre-tax dollars to a Health Care Spending and Saving Account. Administered by HealthEquity, these tax-advantage accounts allow you to deduct money from your paycheck on a pre-tax basis and deposit it into a special account, resulting in tax savings.
SPARC encourages you to take full advantage of their money-saving potential. Read on to learn more about the different accounts and how they can help you save pre-tax dollars!
Key features
Tax-free money
Money goes in tax-free* and comes out tax-free when it’s used for eligible expenses.
Convenient payroll deductions
Contribute to your accounts easily and effortlessly.
Helpful budgeting tool
Plan for upcoming expenses by setting aside money each paycheck.
*HSA contributions are not subject to federal income tax, but are currently subject to state income tax in CA and NJ. Consult with your tax advisor to understand the potential tax implications of enrolling in an HSA and/or FSA.
2024 tax-advantaged health care accounts
Health Savings Account (HSA)
Pay for medical expenses such as plan deductibles, coinsurance, doctor’s visits, hospital services, dental care, and vision care. Available only to employees who enroll in the Essential CDHP.
Health Care Flexible Spending Account (FSA)
Pay for out-of-pocket medical, dental, prescription drug, and vision expenses. Employees do not need to enroll in a medical plan to also enroll in the FSA.
Limited Purpose Flexible Spending Account (LPFSA)
In conjunction with an HSA, pay for eligible dental and vision post-deductible expenses. Available only to employees who enroll in the Essential CDHP.
Health Reimbursement Account (HRA)
Pay for medical expenses such as plan deductibles, coinsurance, doctor’s visits, and hospital services. Available only to employees who enroll in the Standard PPO.
What’s eligible?
The IRS determines what expenses can be paid with money from an HSA, FSA, LPFSA, or HRA. Learn more about the eligible expenses for each account.
How much could you save?
Here’s an example. Let’s say Tom decides to set aside $2,000 in an HSA or FSA for the year. Normally, on that money, they’d pay $480 in federal income tax, $100 in state income tax, and $153 in payroll tax. So, by contributing that $2,000 to their HSA or FSA, they’ll save $733 in taxes for the year.
| Without an HSA or FSA, Tom would pay … | Savings |
|---|---|
| 24% in federal income tax……………………………………………………….. | $480 |
| 5% in state income tax*…………………………………………………………. | $100 |
| 7.65% in payroll tax…………………………………………………………..……. | $153 |
| Their total tax savings for the year with an HSA or FSA …………... | $733 |
This hypothetical is for educational purposes only. Dollar amounts or savings will vary depending on income, state, and city tax rules, and other factors. Please consult a tax, legal, or financial advisor about your own personal situation.
*HSA contributions are not subject to federal income tax, but are currently subject to state income tax in CA and NJ. Consult with your tax advisor to understand the potential tax implications of enrolling in an HSA and/or FSA.
HealthEquity: Manage your accounts on the go
HealthEquity offers a convenient mobile app to help use and manage your health spending accounts.
- On-the-go access for all account types
- Take a photo of documentation with phone and link to claims and payments
- Send payments/reimbursements from your account
- Manage debit card transactions
- View claims status
Health Savings Account (HSA)
With the Essential CDHP, you’re eligible to contribute money to a Health Savings Account (HSA) through HealthEquity. The HSA is a tax-free savings account that you own. You can choose to spend the money right away as eligible health expenses come up or save it for the future — you can even use it in retirement. HSA’s are individually owned accounts, meaning they go with you wherever you go. If you leave the Company with money remaining in your HSA, that account remains in your name, and the money can be used at a later date. You would only need to pay a small monthly administrative fee, which the Company covers as an active employee.
Get a triple tax advantage!
*HSA contributions are not subject to federal income tax, but are currently subject to state income tax in CA and NJ. Money in an HSA can be withdrawn tax-free as long as it is used to pay for qualified health-related expenses. If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn, plus a 20% penalty tax if you withdraw the money before age 65.
2024 contribution limits
The maximum amount you and SPARC can contribute to your HSA is determined by annual IRS limits. In 2024, the total contribution limits are:
| Individual | Family | |
|---|---|---|
| IRS HSA Limit | $4,150 | $8,300 |
| SPARC Contribution | $500 | $1,000 |
| Your Contribution | $3,650 | $7,300 |
| 55+ Contribution | $1,000 | N/A |
Keep in mind that the contribution amount you’re able to elect for the year will be reduced by the amount of SPARC’s annual contribution: $500 if you have employee-only medical plan coverage or $1,000 if you cover dependents.
Who’s eligible for an HSA?
In order to establish and contribute to an HSA:
- You must be enrolled in the Essential CDHP.
- You cannot have access to funds in a Flexible Spending Account (FSA) owned by a spouse/domestic partner if taxes are filed jointly.
- If you and your spouse/domestic partner are both enrolled in separate HSA-eligible medical plans, your combined annual pre-tax contribution cannot exceed the IRS limits.
You should review IRS rules for making HSA contributions if you will turn age 65 during the year. For more information, see IRS Publication 969.
Increase your tax savings with a Limited Purpose FSA.
Use your HSA together with a Limited Purpose FSA for additional tax savings. With the Limited Purpose FSA, only dental and vision expenses are allowed.
How it works
HealthEquity automatically sends you a debit card to use for your HSA transactions. This card can be used the same way that any other debit card is used. Payroll contributions are available to use as they are deducted from your paycheck. If you do not have enough funds to cover a service at a specific time, you can always pay out of pocket and reimburse yourself with funds from the account as they become available. Remember to keep all of your receipts, as HealthEquity may occasionally ask for documentation of a qualified medical expense.
Did you know?
You can change your HSA contribution throughout the year. HSA contributions can be changed once per month and will take effect in the following paycheck. If you make a change mid-year, your payroll deduction will be adjusted accordingly based on the number of pay periods remaining in the year.
To initiate a change, download the HSA Change Request Form. You can also access this form on the Benefits page on your brand intranet site or request it from your Benefits Team. See Contacts for email addresses for each company to request or return completed forms.
Health Care Flexible Spending Accounts (FSA)
For employees enrolled in the Standard PPO, Premium PPO, or Kaiser HMO (CA Only), a Health Care FSA lets you set aside pre-tax dollars through bi-weekly contributions to help pay for eligible out-of-pocket medical, dental, prescription drug, and vision expenses.
- You may contribute up to $3,200 to your Health Care FSA.
- There is no company contribution to an FSA; it is entirely employee funded.
Important note
Once you make your election for 2024, it cannot be changed during the plan year unless you experience a Qualified Life Event (QLE).
Use your money!
The money in your FSA does not carry over to the next plan year; you must “use it or lose it.” Employees have until the end of March of the following year to submit FSA expenses incurred during the previous plan year.
How the Health Care FSA works
Save all receipts or other itemized documentation
You may be asked to provide supporting documentation for purchases made through your FSA. Please be sure to save your receipts and Explanations of Benefits (EOBs). Expenses related to vision and dental will not be automatically confirmed. Your plan administrator will notify you if documentation is needed to support an expense.
Important note
Participation in an FSA ends upon termination from the Company unless continuation is elected through COBRA.
Limited Purpose Flexible Spending Account (LPSFA)
If you are enrolled in the Essential CDHP, you may elect to enroll in a Limited Purpose Flexible Spending Account (LPFSA). An LPFSA may be used in conjunction with an HSA and allows you to contribute pre-tax dollars to use for eligible dental and vision post-deductible expenses. This allows you to maximize your pre-tax HSA contributions and contribute additional pre-tax dollars to an LPFSA.
Use your money!
The money in your LPFSA does not carry over to the next plan year; you must “use it or lose it.” Employees have until the end of March of the following year to submit LPFSA expenses incurred during the previous plan year.
Important note
Participation in a LPFSA ends upon termination from the Company unless continuation is elected through COBRA.
Health Reimbursement Account (HRA)
With the Standard PPO, you will receive an employer-funded Health Reimbursement Account (HRA), administered by HealthEquity, to help cover the costs of your health care.
Unlike a health care spending account, you are not able to contribute additional funds into an HRA, though you can use these funds for the same types of medical expenses.
The amount of company contributions is as follows:
| If you earn less than $50,000 | If you earn $50,000 or more |
|---|---|
| Employee: $200 Family: $400 |
Employee: $100 Family: $200 |
Important note
Unused HRA funds can be rolled over for one year and used in the following year.
HRA features
- It’s free money. Completely funded by SPARC, without employee contributions.
- SPARC employee have the following options:
- Works like a bank account. SPARC contributes tax-free money to your HRA at the start of each year that you can use to pay for your eligible health care expenses. You’ll receive $1,000 for employee-only medical coverage or $2,000 if you cover dependents. Use your HRA debit card to spend the money on:
- Deductibles
- Coinsurance
- Prescription drugs
- Out-of-pocket expenses
- And more
- Automatically applied to your claims. Money in your HRA is automatically applied to your out-of-pocket expenses associated with your medical plan.
- Unused money from the previous year carries over at the end of the year. You cannot take the money with you if you leave the company.
- Can be paired with a Health Care FSA. You can set aside your own before-tax money in an FSA to help.