TAX-SAVING SPENDING ACCOUNTS
Flexible Savings Accounts (FSA) and Health Savings Accounts (HSA) help you save for qualified medical expenses. However, they vary in terms of benefits and eligibility.
Which account is right for you?
Health Savings Account (HSA)
- Pairs with the Cigna HDHP LocalPlus medical plan—you must be enrolled in this plan and meet other IRS qualifications to be eligible
- City of Golden contributes money to help you build savings!
- No "use it or lose it" rule
Healthcare FSA
- Save money on your healthcare expenses
- You cannot participate if you are contributing to an HSA
- "Use it or lose it" (unspent funds at the end of the plan year are lost)
- Plan resets each year—you must reenroll every year and you lose any money left in your account at year-end
Limited Purpose FSA
- Use for dental and vision expenses
- Compatible with an HSA
- "Use it or lose it" (unspent funds at the end of the plan year are lost)
- Plan resets each year—you must reenroll every year and you lose any money left in your account at year-end
Dependent Care FSA
- Save money on child and adult dependent care expenses that allow you to go to work
- No eligibility requirements
- "Use it or lose it" (unspent funds at the end of the plan year are lost)
- Plan resets each year—you must reenroll every year and you lose any money left in your account at year-end
Health Savings Account (HSA)
A Health Savings Account (HSA) is personal tax-advantaged savings account you can use to pay for eligible health expenses now and into the future.
What is an HSA?
A Health Savings Account (HSA) is personal tax-advantaged savings account you can use to pay for eligible health expenses now and into the future.
You’re eligible for an HSA if:
- You are enrolled in a qualified High Deductible Health Plan, such as the City of Golden's HSA medical plan
- You are NOT enrolled in Medicare, Tri-Care, Medicaid, or a medical plan with copays
- You are NOT enrolled in a Healthcare FSA
- You are NOT eligible to be claimed as a dependent on someone else’s tax return
How the High Deductible Health Plan with HSA works
- Open your HSA and start saving money.
- When you get non-preventive care under your medical plan, you'll pay the full cost until you meet your deductible.
- You can use the money in your HSA to pay for your eligible care expenses.
- If you don't use the money in your HSA within the plan year, it stays in your account and it builds interest. You can even use your HSA as additional retirement income at age 65 without any penalties (normal income tax would apply).
HSA Contributions
Your HSA account is set up automatically after you enroll. You can contribute up to the annual IRS limit. The City of Golden also contributes to help you build savings!
*If you are age 55 or older you can make an additional $1,000 "catch up" contribution. The IRS limit includes employer contributions.
**If you are covering one or more dependents on your medical plan you can contribute up to the family limit.
Getting Started
Prior to opening your HSA, you must be enrolled in the HSA medical plan. When you’re ready, opening and managing your HSA with Rocky Mountain Reserve is fast and easy.
You’ll get information on investment choices, payment options, and ongoing support to help you build and manage your savings.
Three reasons to love an HSA
01
Get Free Money!
The money the City of Golden contributes is yours to keep.
Your HSA money stays in your account even if you change medical plans or employers.
02
Triple Tax Savings
Tax deductions when you contribute to your account.
Tax-free withdrawals to pay for qualified medical expenses.
Tax-free earnings on the money in your account.
03
It's Flexible
You can use the money in your HSA for eligible health expenses, or you can save it and let it grow.
Your HSA savings roll over year after year, and you can even use your HSA as retirement income at age 65 without penalty (normal income tax still applies).
Flexible Spending Accounts (FSAs)
Flexible Spending Accounts (FSAs) allow you to set aside money from your paycheck to pay for eligible healthcare and dependent care expenses with tax-free dollars. By participating in an FSA, you can reduce your taxable income and enjoy 20–30% savings on expenses you are already paying!
You don’t have to enroll in one of our medical plans to participate in the healthcare FSA. However, if you or your spouse are enrolled in our high deductible health plan , you can only participate in the “limited purpose” FSA for dental and vision expenses.
Save on healthcare expenses!
A healthcare FSA allows you to set aside tax-free money to pay for healthcare expenses you expect to have over the coming year.
Healthcare FSA
How the Healthcare FSA Works
- You estimate what you and your family’s out-of-pocket costs will be for the coming year. Eligible expenses include office visits, surgery, dental and vision expenses, prescriptions, even eligible drugstore items.
- You can contribute up to the annual limit set by the IRS. (The limit for 2024 is $3,200; this amount is projected to increase to $3,300 for 2025.) Contributions are deducted from your pay pretax, meaning no federal or state tax on that amount.
- During the year, you can use your FSA debit card to pay for services and products. Withdrawals are tax-free as long as they’re for eligible healthcare expenses.
Limited Purpose FSA
The Limited Purpose FSA works like the Traditional Healthcare FSA, except it is limited to dental and vision expenses so that you may also contribute to a Health Savings Account (HSA).
Dependent Care FSA
How the Dependent Care FSA works
The Dependent Care FSA is similar to the Healthcare FSA, but it allows you to save on dependent care expenses that allow you to work.
- You choose how much to contribute for eligible dependent care expenses for the year. You can set aside up to $5,000 per household per year ($2,500 each if you are married and you and your spouse file separate tax returns).
- Eligible expenses include not only child care, but also before- and after-school care programs, preschool and summer day camp for children under age 13. The account can also be used for day care for a spouse or other adult dependent who lives with you and is physically or mentally incapable of self-care.
- You can pay your dependent care provider directly from your FSA account, or you can submit claims to get reimbursed for eligible dependent care expenses you pay out of pocket.
Save on dependent care expenses!
A dependent care Flexible Spending Account (FSA) can help families save potentially hundreds of dollars per year on day care.
FSA Reminders
- You can’t change your FSA election amount mid-year unless you experience a qualifying event.
- Money contributed to an FSA must be used for expenses incurred during the same plan year.
- Unspent funds will be forfeited.
- If you want to participate in the FSA for 2025, you must ACTIVELY enroll!