Here are some good-to-know tidbits for Health Savings Accounts and Flexible Spending Accounts in 2022.
Health Savings Accounts
What Are They?
HSA are a special personal savings account for individuals who want to save tax-free money for medical, dental and vision expenses.
An HSA has a wide variety of uses such as a vehicle to pay expenses, a long-term investment strategy, and a retirement vehicle. Ask us how adding an HSA to your medical retirement strategy can help provide years of healthcare security.
The 2022 contribution limits are: $3,650 for individuals and $7,300 for family.
Individuals who are age 55 or older can contribute an additional $1,000 into their HSA as a catch-up contribution.
HSAs continue to grow each year as individuals are taking a more active role in learning and managing their health plan options.
Flexible Spending Accounts allow employees to deduct certain expenses from their pay prior to paying taxes. Insurance premiums, health care expenses not covered by insurance or dependent care costs incurred while at work can be reimbursed.
The 2022 Health FSA contribution limit increased $100 for a total of $2,850 under the Patient Protection and Affordable Care Act. The Dependent Care maximum remains $5,000.
Employers can allow employees to rollover a maximum of $500 of unused Health FSA funds to the next plan year. Previously, the “use-it-or-lose-it” rule was in place and contributions had to be used up by the end of the plan year or grace period. Employers will need to specifically add the rollover ruling to their plan, or it will remain “use-it-or-lose-it.”