Health Savings Accounts. Dependent Care Accounts. Health Care Spending Accounts. They can all be super useful and cost-effective. They can also be confusing. Here’s a quick overview of how the different accounts work and how you can get the most from them.
Do I need a spending or savings account?
It depends on your expenses. Start by asking yourself these two questions:
1. Do I have these types of expenses?*
- Day care
- Summer camp
- Elder care
- After-school programs for children with special needs
This sounds like me.
You may want to enroll in the Dependent Care Flexible Spending Account (FSA).
Here’s what’s great about it:
- You contribute to the account tax-free.
- Intuit kicks in money on top of your contributions.
- You can use it for a variety of expenses!
What’s the catch?
You have to use it by the end of the fiscal year. So, budget carefully.
2. Do I have these types of expenses?
- Medical care like office visits and prescriptions
- Dental care like fillings and braces
- Vision care like glasses and contacts
Yes, and I have the Cigna Choice Fund with HSA medical plan.
A health care account can help a lot. But which one? It depends on your medical plan.
You automatically get a Health Savings Account (HSA).
Here’s what’s great about it:
- Intuit contributes each year.
- You can also contribute tax-free, and enjoy other tax advantages.
- You can use the money now to pay for expenses, or let it keep growing and use it to save for your retirement. (No “use it or lose it”!)
- The account is yours, even if you leave Intuit.
What’s the catch?
You can only have it with the Cigna Choice Fund with HSA medical plan. You're not eligible to contribute to an HSA if you're enrolled in Medicare.
Want to save even more?
If you’re enrolled in the Cigna Choice Fund with HSA medical plan, you also have the option of opening a Limited Purpose Flexible Spending Account (FSA).
Note: Under IRS rules, you cannot have both an HSA and a regular Health Care FSA.
Here’s what’s great about it:
- You can contribute to it and use it tax-free.
- You can use it for dental and vision expenses while you let your HSA balance grow.
What’s the catch?
It’s just for dental and vision, not medical, expenses. And you have to use the funds by the end of the fiscal year. So, budget carefully.
Yes, and I have the UnitedHealthcare Network plan, Cigna Managed Network plan or Kaiser plan.
You have the option of opening a Heath Care Flexible Spending Account (FSA).
Here’s what’s great about it:
- You can contribute to it and use it tax-free.
- You can use it for all sorts of health care expenses.
- If you contribute $150 or more, you get a debit card to make paying for expenses even easier.
What’s the catch?
You have to use the funds by the end of the fiscal year. So, budget carefully.
How do the HSA and FSAs stack up?
| HSA | Limited Purpose FSA | Health Care FSA | Dependent Care FSA | |
|---|---|---|---|---|
| Whose expenses are eligible? | Yours and your tax dependents' | Yours and your tax dependents' | Yours and your tax dependents' | Your tax dependents' |
| Automatic enrollment? | Yes—when you enroll in the Cigna Choice Fund with HSA medical plan | No—You must enroll as a new hire, during annual enrollment or if you have a qualified family status change. You must re-enroll every year. | No—You must enroll as a new hire, during annual enrollment or if you have a qualified family status change. You must re-enroll every year. | No—You must enroll as a new hire, during annual enrollment or if you have a qualified family status change. You must re-enroll every year. |
| Set aside money tax-free to pay for eligible expenses? | Up to $3,850/individual or $7,750/family (for FY24; includes Intuit's contribution) | Up to $3,050 per plan year | Up to $3,050 per plan year | Up to $5,000 per plan year |
| Get money from Intuit? | Under $80k salary: $1,000/individual or $2,000/family per year
$80k or more salary: $750/individual or $1,500/family per year |
No | No | Matching contribution, up to $650 per year |
| Save the money until you're ready to use it? | Yes | No | No | No |
| Keep your account if you leave Intuit? | Yes | No | No | No |
| Enjoy interest earnings? | Yes | No | No | No |
Note: Restrictions may apply depending on your state of residence and Medicare status.
* For a complete list of eligible Dependent Care FSA expenses, review the "Are These Work-Related Expenses?" section of IRS Publication 503.