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:
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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

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Access your account

Manage your HSA: Visit HealthEquity

Manage your FSA: Visit HealthEquity

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What's eligible?
 

Compare Health Accounts

How is the FSA different from the HSA?

  HSA Limited Purpose FSA Health Care FSA
Available with the following medical plans... CDHP CDHP High Option PPO, Low Option PPO, or if you waive medical coverage
Receive Company Contribution Yes
  • Employee only $500
  • Employee + Spouse $750
  • Employee + Child(ren) $1,000
  • Employee + Family $1,000
No No
Change your contribution amount anytime Yes No, unless you have a life event No, unless you have a life event
Access your entire annual contribution amount as needed Yes Yes Yes
Access only funds that have been deposited Yes No No
Use account money for... All eligible health care expenses

Once you reach age 65, you can also use your HSA for non-health care expenses and pay only income tax on the amount you spend (no penalty)
Dental and vision expenses only All eligible health care expenses
Balance earns interest tax-free Yes No No
"Use it or lose it" rule applies No, any balance remaining in your account at the end of the year remains in your Health Savings Account and is yours to keep and it can be used for health care expenses, future retiree healthcare premiums and more. Carry over up to $550 in unused contributions at the end of the plan year; forfeit any amount over $550 Carry over up to $550 in unused contributions at the end of the plan year; forfeit any amount over $550
 

Health Savings Account (HSA)

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

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Put money in tax-free.

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

  • Employee only $500
  • Employee + Spouse $750
  • Employee + Child(ren) $1,000
  • Employee + Family $1,000
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Carry unused money over.

  • Money is yours, year after year.
  • Build up savings for future health care expenses. Invest your money once it reaches a minimum balance, giving you the potential for tax-free earnings growth and a way to plan for your medical costs in retirement.
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Pay for care tax-free.

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Keep in mind: 2022 contribution limits

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

  • $3,650 for individual medical coverage.
  • $7,300 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.

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 HealthEquity 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.

Think long term!

Health care costs are a major expense during retirement, even with Medicare coverage. But health care doesn’t have to be a financial burden. If you contributed the annual maximum to your HSA for 30 years, your account could grow enough to cover most of your health care expenses. And don’t forget, DSM’s contributions help you reach the annual limit faster!

 

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

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 HealthEquity 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 $2,850 annually to help cover eligible medical, dental, and vision expenses.
  • Carry over up to $550 of unused FSA contributions at the end of the plan year.
  • 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.

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 $2,850 annually.
  • Carry over up to $550 of unused FSA contributions at the end of the plan year.
  • 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.

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 HealthEquity 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 $130,000 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 HealthEquity. 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.