Overview

You can save money on health care and dependent care expenses by paying for them with tax-free accounts. Using these accounts effectively will help you take full advantage of their money-saving potential.

Tax-advantaged accounts:

Key features at a glance:

  • 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.
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Compare the health accounts

HSA vs FSAs

Health Accounts
Access your account

Manage your HSA: Visit WageWorks

Manage your FSA: Visit WageWorks

Eligible
What's eligible?

Compare Health Accounts

How is the FSA different from the HSA?

  Health Care FSA Health Savings Account
Who can participate?Participate if you elect the High Option PPO or Low Option PPO — or waive medical coverageParticipate only if you elect the CDHP
How can you use it?Use FSA for eligible medical, prescription drug, dental and vision expensesUse HSA for eligible medical, prescription drug, dental and vision expenses
Does DSM contribute?No contributions from DSMContributions from DSM — and you — if you wish to contribute
Can you change your contribution?You cannot make changes during the year, unless you have a life eventYou can change your contribution amount anytime during the year (you cannot elect an amount less than what you already contributed)
What happens at year end?Carry over up to $500 of unused FSA contributions at the end of the plan year Money left in your HSA at the end of the plan year remains in your account for use in future years
Can you participate in the other account?If you participate in a Health Care FSA, you cannot participate in an HSAIf you participate in an HSA, you can also enroll in the Limited FSA for eligible dental and vision expenses
What medical plan allows you to use the account?You and your spouse/DP can enroll in your spouse’s/ DP’s Health Care FSA if you elect a PPOYou and your spouse/DP cannot enroll in your spouse’s/DP’s Health Care FSA if you elect DSM’s CDHP
What happens if you leave DSM?The FSA is established and maintained by DSM; you cannot take it with you if you were to leave DSMThe HSA is your account; it is not established or maintained by DSM

Health Savings Account (HSA)

Employees in the CDHP can open and contribute money to a Health Savings Account (HSA) through WageWorks. The HSA is a tax-free savings account that you can use to pay for eligible health expenses anytime, even in retirement.

Tax AdvantagePut money in tax-free.

Put money in tax-free.

  • Contribute to your HSA through pre-tax payroll deductions.
  • Change your contribution amount anytime.

Tax AdvantageGet company contributions.

Get company contributions.

  • $250 for coverage for yourself only
  • $500 if you cover yourself and your spouse/DP
  • $750 if you cover yourself and child or yourself and two or more dependents
  • Up to an additional $1,200 if you and/or your spouse/DP earned the wellness incentive

An HSA election must be made in order to receive the Company Contribution and any earned Wellness Incentive (even if a $0 contribution). If no election is made, the money will be forfeited.

Tax AdvantageCarry unused money over.

Carry unused money over.

  • All the money in your HSA is yours to keep, year after year.
  • You can build up savings to pay for future health care expenses. You can even invest your money once it reaches a minimum balance, which gives you the potential for tax-free earnings growth and a way to plan ahead for your medical costs in retirement.

Tax AdvantagePay for care tax-free.

Pay for care tax-free.

Keep in mind: 2020 contribution limits

The total amount you and DSM can contribute to your HSA this year is:

  • $3,550 for individual medical coverage.
  • $7,000 for family medical coverage.

Add $1,000 to these limits if you’re age 55 or older.

HSA at a glance

HSA

Increase your tax savings with a Limited Purpose FSA. Use your HSA together with the Limited Purpose FSA for additional tax savings. Note that with the Limited Purpose FSA, only dental and vision expenses are allowed.

icon Triple tax advantage

The HSA has a triple tax advantage that trumps even a 401(k) or Roth IRA. Money goes in tax free for federal taxes (state income taxes may apply in some states), builds earnings tax free, and comes out tax free when used on eligible expenses.*

*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.

Getting started

To open an HSA, you must be enrolled in the CDHP. If you’re enrolled and haven’t opened an HSA yet, visit WageWorks to open your account. If you’re not enrolled in the CDHP, you may enroll during the next Annual Enrollment period.

An HSA election must be made in order to receive the Company Contribution and any earned Wellness Incentive (even if a $0 contribution). If no election is made, the money will be forfeited.

icon Think long term!

A married couple is expected to spend $350,000 on health care costs during retirement, even with Medicare coverage. If you contributed the annual maximum to your HSA for 30 years, your account could grow to $313,000. And don’t forget, DSM’s contributions help you reach the annual limit faster!

Source: EBRI.org. Estimate of future account value assumes a 5% rate of return and no withdrawals.

Flexible Spending Account (FSA)

Using an FSA is like getting a discount on everyday health and/or dependent care expenses because you’re paying with tax-free money.

There are separate FSAs for health care and dependent care.

You can use the Health Care FSA to help pay for eligible health care expenses for you and your dependents. The Dependent Care FSA can be used to help pay for day care for your children (up to age 13) and elder day care expenses.

FSAs at a glance

icon Use your money!

With FSA money, you use it or lose it. If you have a balance left in your FSA as year-end approaches, try to spend as much of it as you can on eligible expenses. Request reimbursement or manage your account on the WageWorks website.

Health Care FSA

Pairs with the High Option PPO and Low Option PPO only; also available if you waive DSM medical coverage.

  • Contribute up to $2,750 annually to help cover eligible medical, dental, and vision expenses.
  • Select your annual contribution amount during Annual Enrollment. You can only change your contribution amount during the year if your personal situation changes.
  • Spend your money by using your FSA debit card or request reimbursement for payments you’ve made.
  • Your entire annual contribution amount is available to you from the beginning of the plan year.
  • Up to $500 of unused money carries over.

Limited FSA

Pairs with the CDHP only.

  • Works together with the Health Savings Account (HSA) to give you additional tax-saving opportunities.
  • Contribute up to $2,750 annually.
  • This account can be used to cover eligible dental and vision expenses only.
  • Select your annual contribution amount during Annual Enrollment. You can only change your contribution amount during the year if your personal situation changes.
  • Spend your money by using your FSA debit card or request reimbursement for payments you’ve made.
  • Your entire annual contribution amount is available to you from the beginning of the plan year.
  • Up to $500 of unused money carries over.

Dependent Care FSA

Pairs with any (or no) medical plan.

  • Contribute up to $5,000 a year to help cover your eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders. This includes preschool, summer day camp, before or after school programs and child and elder day care.
  • Use the WageWorks website to reimburse yourself for payments you’ve made.
  • Select your annual contribution amount during Annual Enrollment. You can only change your contribution amount during the year if your personal situation changes.
  • Unused money does not carry over at the end of each year — use it or lose it.

Please note: There is an annual contribution limit of $2,500 to the Dependent Care FSA for highly compensated employees, which are defined by the IRS as those earning $120,000 or more.

All FSA expenses must be incurred by December 31 of the plan year, and all claims must be submitted by March 31 following the plan year.

Commuter Benefits

A pre-tax commuter benefit account is used to pay for parking and public transit costs when it is part of your daily commute. Eligible costs include train, subway, bus, ferry or vanpool fees. The money you contribute to your Commuter account is not subject to payroll taxes, so you pay less to travel to and from work. You can pause, change, or cancel contributions to your commuter account at any time, although there are deadlines for changes and cancellations. There's no "use it or lose it" policy with your account and balances can be rolled over month to month. Though, if you leave DSM with money remaining in your account, you forfeit any unused funds.

To learn more and enroll, visit www.Wageworks.com. Employees who are already participating in a DSM Flexible Spending Account (FSA) or Health Savings Account (HSA) can use their existing account information to enroll.