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Leeds West Groups offers a few important options that can help you save money on healthcare and other expenses: the Health Savings Account (HSA), the Flexible Spending Account (FSA), and the Dependent Care FSA. These accounts allow you to set aside money tax-free to pay for eligible expenses, which can help you manage costs throughout the year. Here’s a simple breakdown of each:
Health Savings Account (HSA)
What is it? An HSA is a special savings account that allows you to set aside money tax-free to pay for eligible healthcare expenses. It works with high-deductible health plans (HDHPs), and the money in your HSA can roll over from year to year – it’s yours to keep, even if you change jobs or retire.
Who benefits?
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Anyone enrolled in a high-deductible health plan (HDHP).
Why sign up?
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Tax benefits: Contributions are tax-deductible, and withdrawals for medical expenses are tax-free.
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Long-term savings: Unlike an FSA, the money in your HSA rolls over year after year, so you can build up a fund for future healthcare costs.
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Flexibility: You can use the money for a wide range of medical expenses, including doctor visits, prescriptions, dental, and vision care.
Flexible Spending Account (FSA)
What is it? An FSA allows you to set aside pre-tax money to pay for eligible healthcare expenses, such as copays, prescriptions, and over-the-counter items. The money in an FSA must be used within the plan year, or it may be forfeited, so it’s important to plan carefully.
Who benefits?
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Those who want to save on taxes while paying for medical expenses they expect to incur during the year.
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Employees who know they’ll have predictable healthcare costs, such as regular prescriptions, doctor visits, or medical procedures.
Why sign up?
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Immediate tax savings: Contributions are tax-free, so you reduce your taxable income right away.
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Great for predictable expenses: If you know you’ll have certain medical costs, an FSA can help you set aside the money before taxes and spend it as needed.
Dependent Care FSA
What is it? A Dependent Care FSA is similar to a regular FSA, but it’s designed specifically to help you save on the cost of dependent care (such as daycare, preschool, or care for a disabled family member). Like an FSA, contributions are tax-free.
Who benefits?
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Parents or guardians who pay for childcare or elder care.
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Those who have dependents that require care while they work.
Why sign up?
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Tax savings for dependent care: Save money on childcare or elder care expenses with pre-tax dollars.
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Helps reduce the burden of care costs: Contributions can be used to pay for daycare, after-school programs, or summer camps, easing the financial strain of these necessary services.
Summary: Why Should You Sign Up?
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Save money: All three accounts allow you to set aside money tax-free, reducing your taxable income and giving you more spending power for healthcare and dependent care costs.
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Plan for predictable expenses: Whether it’s medical, childcare, or elder care, these accounts help you cover expenses that come up during the year without being surprised by the cost.
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Long-term benefits: An HSA, in particular, lets you save for future healthcare costs while building up funds over time. It’s a great way to plan for both short-term and long-term health needs.
We encourage you to consider signing up during benefits enrollment if any of these options could benefit you. They’re a great way to reduce your tax burden and prepare you for healthcare and dependent care expenses throughout the year. If you have questions or need more details about these accounts, feel free to reach out to HR or The Benefits Concierge.
The Benefits Concierge:
The Benefits Concierge Center is a team of expert, licensed benefits counselors passionate about helping our valued team members make benefit selections that are best for your health, lifestyle, and finances. You can reach the BCC at 888-325-6525 from 8 a.m. to 8 p.m. EST, Monday through Friday, or schedule an appointment by visiting https://www.employeeconnects.com/leedswestgroups/.
