A dependent care flexible spending account (FSA) lets participants set aside pre-tax dollars to help pay for dependent care. Contributing to this benefit reduces taxable income and spreads the benefits of pre-tax dollars throughout the year, helping individuals save 30 percent or more (based on their tax rate) on dependent care costs. Dependent Care...
The season for filing taxes is upon us once again. We’re getting closer to the deadline for filing for 2023. We wanted to share a few tips and reminders about health savings accounts (HSA) you’ll need for your tax return. HSA Tax Prep Checklist Check your W-2 for HSA payroll contributions Get your 1099-SA form...
Health savings accounts (HSAs) have become increasingly popular but they often come with misconceptions. To help employees make informed decisions, let’s debunk common HSA myths and shed light on the HSA facts that matter. HSA Fact #1: HSAs are Employee-Owned While employers may choose to contribute to an employees’ HSA, it’s important for employees...
Expanded public transit. The rise and rebound of ridesharing. Increased work-from-home arrangements. The work commute has changed a lot recently, as lawmakers and civic officials grapple with how to effectively support people traveling to and through ever-growing cities. New York City, Washington, D.C., Chicago, Philadelphia and Seattle are among cities that have enacted laws and...
What are pre-tax savings and post-tax savings? Understanding taxes relating to health savings accounts (HSAs), flexible spending accounts (FSAs) and other benefits plans can be time-consuming and difficult to explain. Pre-tax savings are tied directly to FICA taxes. You may be wondering what FICA is and how does pre-tax savings work for HSAs and FSAs?...
In 2023, mental health became a top priority for employees and employers. According to a SHRM study, 41% of U.S. employees said they would likely or would very likely leave their current job if they were offered a new position with significantly improved mental health benefits. While many companies offer employee assistance programs (EAPs), it’s...
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Did you know that, when employees were asked on a scale of 1 to 10 how confident they are in their understanding of their benefits, 34% chose 7 or less. Only 25% responded with a 10. That was just one of the findings from a survey of benefits participants WEX launched in May 2023. Often,...
Have you recently changed employers? Are you considering making a change? Fortunately, when you participate in a health savings account (HSA) through Advantage Administrators, your HSA stays with you. There are plenty of myths about HSAs, but today let’s tackle what really happens to your HSA when you change employers.
HSA transfer
If your new employer offers an HSA, you can transfer the administration of your current account to your new employer’s HSA administrator. If you select this option, your new employer will provide you with a transfer request form that authorizes a new HSA custodian to take over the administration of your account. There are no IRS fees or penalties for this option.
“With a true HSA transfer, the key there is it’s a requester initiating to have the funds transferred directly from one HSA custodian to another, so those funds will never touch your hands,” says Amy Donlin, senior solution analyst, benefits, WEX.
HSA rollover
You can also take a rollover approach, which is a process by which you receive a check for your HSA funds. You have 60 days after receiving these funds to move them into another HSA, but watch out: if you exceed the 60-day window, those funds will be considered a distribution and taxed — and you’ll be assessed a hefty 20% penalty.
“This option is limited to only one time during the calendar year,” said Kyle Schulte, senior solution analyst, benefits, WEX. “It’s important to make sure when you’re consolidating these accounts that you understand what method is being used.”
Keep the HSA open
Alternatively, you can simply keep the HSA you already have. There are no IRS fees or penalties for doing so. If you do keep your current HSA, you can withdraw funds for eligible expenses at any time. However, you can only contribute to your HSA if you’re still enrolled in a high-deductible health plan. You can also invest some or all of the funds!
(Wondering how much you should contribute to your account in the first place? We’ve got you covered.)
Your HSA is your account
The bottom line is that your HSA is yours. This amazing savings tool doesn’t belong to your employer, so you get to take it with you wherever you go, even if your new employer doesn’t offer HSAs or provide HSA contributions. If you’re interested in learning more, check out this episode of Wex’s Benefits Buzz podcast to learn more.
The information in this blog post is for educational purposes only. It is not investment, legal or tax advice. For legal or tax advice, you should consult your own counsel. To stay up to date on benefits trends and insights, subscribe to our blog.