Pre-tax programs that help employees to save for inevitable unreimbursed health care, such as Flexible Savings Accounts and Health Savings Accounts, are advantageous to employees. Not just in helping them save for that rainy day when insurance does not fully cover a service, but also due to the tax savings involved. However, there are specific rules that apply to these programs. Understanding these complex rules is important for any advisor, especially due to their prevalence: 17% of employers offered HSA programs in 2021, while 43% offered a Healthcare FSA. Sandy Wood will review the regulations affecting both of these pre-tax savings programs, outlining their similarities and differences.
Take-aways or learning outcomes
• An understanding of which companies may have certain employees restricted from participating
• The similarities and differences between these pre-tax funding programs
• Two main Healthcare Flexible Spending Account programs most commonly used by employers
• Special rules for Health Savings Accounts, such as catchup contributions and the last month rule