Contacts & Resources

Tax-Advantaged Accounts (HSA & FSA)

Tax-advantaged accounts help you pay for eligible health care or dependent care expenses while lowering your taxes.

There are two types of tax-advantaged accounts:

Health Savings Account (HSA)

If you enroll in the HSA Medical Plan, an HSA will be opened in your name. An HSA lets you save pre-tax funds to help pay for eligible out-of-pocket health care expenses now and in the future.

The HSA offers a triple tax advantage:

  • Tax-free savings: You may contribute to your account each pay period on a pre-tax basis, which lowers your taxable income with each paycheck. Plus, VillageMD automatically contributes to your account whether or not you contribute. IRS annual limits apply to contributions from all sources combined (see chart below).
  • Tax-free growth: You earn interest on your balance. Once your balance reaches $1,000, you can invest your savings for greater potential growth.
  • Tax-free payments: You don’t pay taxes when you use your account to pay for eligible expenses.

A few other things you need to know about the HSA:

  • You can start, stop, increase or decrease your contributions any time during the year.
  • You own your account, so you take it with you even if you change medical plans, drop medical coverage, or leave VillageMD for any reason — even if you retire.
  • You will receive a personal debit card to access money in your account when paying for expenses at providers and pharmacies, or you can pay bills online. You can also pay bills personally and get reimbursed from your account later.

2022 HSA Contribution Limits

The IRS limits how much you can contribute each year, including contributions from VillageMD:

If You Elect Medical Coverage For

VillageMD’s Contribution*

Your HSA Pre-Tax Contributions

Annual IRS Limit
(VillageMD’s and Your Contributions Combined)

Total with Additional Catch-Up
(if age 55+ by Dec. 31)

Employee

$500

Up to $3,100

$3,650

$4,650

Employee + Spouse/ Domestic Partner

$1,000

Up to $6,200

$7,300

$8,300

Employee + Child(ren)

$1,000

Up to $6,200

$7,300

$8,300

Employee + Family

$1,000

Up to $6,200

$7,300

$8,300

More about your HSA contributions

  • You must remain HSA-eligible for all 12 months of the tax year to make the full annual HSA contribution. If you become ineligible for an HSA later in the year, you must prorate your maximum contribution.
  • You are generally not eligible to contribute to an HSA if any of the following apply:
    • You or your spouse are participating in a Health Care FSA (other than a Limited Purpose FSA) in the same tax year, or have a “rollover amount” or grace period from the prior year.
    • You are entitled to enroll in Medicare (Part A, B, C or D or Medigap).
    • You are enrolled in another health plan (i.e., spouse’s plan) that is not a qualified high-deductible health plan.
    • You can be claimed as a dependent on someone else’s tax return.
    • You are eligible for a Health Reimbursement Arrangement (HRA) or a Medical Expense Reimbursement Plan (MERP), which provides benefits prior to reaching the IRS-required minimum qualified high-deductible health plan deductible.

Flexible Spending Accounts (FSAs)

VillageMD offers three types of FSAs:

  • Health Care FSA: If you waive medical coverage or enroll in the Value-Based Plan, you can use this FSA to pay for eligible medical, prescription drug, dental and vision expenses.
  • Limited Purpose FSA (LPFSA): If you’re enrolled in the HSA Medical Plan, the LPFSA can be used for eligible dental (including orthodontia) and vision expenses. Once you meet your medical plan deductible, you may also use your LPFSA for medical and prescription drug expenses if you wish.
  • Dependent Care FSA: This account has a few key differences from the other FSA options:
    • You can participate regardless of the medical plan you choose, and even if you waive coverage.
    • You can use it to pay for day care expenses for eligible dependents so you can work or look for work. Dependents include children under age 13, or a parent or spouse who lives with you and is physically or mentally incapable of self-care.

All FSAs are “use it or lose it,” which means that any money over the annual rollover limit you don’t use by the end of the calendar year will be forfeited.

How the FSAs Compare

Account

Limited Purpose FSA

Health Care FSA

Dependent Care FSA

Eligible Expenses

Dental and vision only (medical expenses qualify once medical deductible is met)

Medical, prescriptions, dental, vision

Day care for child under age 13, parent or spouse

2022 IRS Max Contributions

$2,750
(rollover up to $550)

$2,500-$5,000
depending on your tax filling status
(no rollover)

When Funds Are Available

January 2022

When deposited via payroll deductions

NOTE: Tax regulations are subject to change. Consult a qualified tax or financial advisor to determine the best approach for your situation.