BASE^® Blog

The LPFSA is one of several, pre-tax health benefits an employer may sign up for through their employer.  It may not be the one that many are familiar with, like the health FSA, but it is worth having in place!

The Limited Purpose Flexible Spending Account (LPFSA) is an employer-sponsored account used to pay for eligible dental and vision care expenses not covered by a traditional health insurance plan.  This additional tax-advantaged account is available to those enrolled in a qualified high-deductible health plan (HDHP) and a Health Savings Account (HSA).

The BASE® Limited Purpose FSA provides employees the opportunity to set aside money, on a pre-tax basis, to pay for their dental and vision expenses with an HSA in place. 

How does it work?

--- An employer elects to offer the LPFSA. 

When an employer has a high deductible health plan (HDHP) and a Health Savings Account (HSA) in place, it qualifies them to also offer the Limited Purpose FSA to their employees as well. 

--- The employee enrolls in the LPFSA and decides how much to contribute.   

The employee elects to contribute, on a pre-tax basis, up to the annual contribution limit.  Those funds are withdrawn automatically from each paycheck and deposited into the LPFSA. 

--- Eligible expenses are incurred.

When an eligible dental or vision expense has occurred, the employee will pay for the service and be reimbursed.

Not only can pairing the LPFSA with the HSA help to increase an employee’s take-home pay by electing to have the funds taken out of their paycheck on a pre-tax basis, but by eliminating the need to use the HSA funds for those eligible dental and vision expenses allowing more money to be saved in the HSA.  All the pre-elected LPFSA funds are available to the employee on day one of the plan year, helping the employee to pay for those expenses upfront, instead of waiting until the funds in the HSA to grow to cover the bill.  The HSA can grow, helping the employee pay for those health care expenses that are high down the road.  Over time, using the money in the LPFSA instead of the HSA can maximize the savings, creating a nest egg for retirement. 

For more information on BASE® Limited Purpose FSA, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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On Saturday, October 15th, it is HSA Day!  This “holiday” is targeted at raising more awareness on how important it is to have, and about all the benefits of, the Health Savings Account. 

The Health Savings Account (HSA) is a personal savings account designed to help individuals save and pay for qualified health care expenses.  The employee uses the HSA funds to pay for thousands of eligible items such as copays, over-the-counter medications, dental, vision, and more with tax-free dollars making it an excellent tax benefit to help make the most of every health care dollar. 

The BASE® HSA not only allows employees to pay for their health care expenses; but allows for the opportunity to save for the future, invest funds to build wealth, and create a powerful tool for a retirement portfolio. 

As if you need any excuse to celebrate saving money and offsetting the high cost of health care, BASE® is here to get you in the spirit!  So put on your party hats, hang the streamers, and let’s talk about the HSA!   

Beat inflation with benefits. Beat inflation with an HSA.

Inflation and a declining financial market have resulted in nearly half of Americans unable to cover a $400 emergency medical expense, according to Nasdaq. Compound that with 50% of employees leaving jobs for mental health reasons many HR professionals are facing a perfect employee wellness storm. As employees turn to their employers for financial, physical, and mental support, HSAs are a great benefit addition during Open Enrollment time.

HSAs can relieve burden.

According to a recent study done by Kaiser Family Foundation (KFF), 67% of Americans worry about paying for an unexpected health care bill.  With that, 33% of Americans WILL experience an unexpected health care bill in the next two years.  But there is peace of mind knowing there is money set aside in the HSA to help pay for the bill. 

HSAs are self-care.

Many do not have the means to pay for doctor appointments and prescriptions and because of that, doctor appointments are postponed, and prescriptions not filled.  Preventative care is self-care, it’s crucial to staying healthy, and HSA funds can help pay for these expenses. 

Everyone benefits from HSAs.

Not only does the employer save on taxes when their employees elect to put money in the HSA, they also see employees performing better.  When employees are stressed about things outside of work their work performance suffers.  By having the HSA in place, it can alleviate stress and help keep the employee productive in the workplace.

Save, save, & save.

HSAs are a triple-advantage tax tool.  Employee contributions lower the employee’s taxable income, investments within the HSA makes the account grow, and qualified withdrawals are all tax-free.  When employees set aside money in the HSA, it can help save up to 30% on health care expenses. 

HSAs go with the flow. 

Other tax-deferred accounts are a bit stricter than an HSA.  HSAs can be used for current day health care expenses, or for those future expenses, and when participants reach a certain age, funds can be pulled from the HSA account for retirement.  Employees can change their contribution amounts throughout the year, take the account with them if they change jobs, set beneficiaries, etc. 

Don’t use it.  Don’t lose it. 

Unlike 125 Cafeteria Plans, the employee’s HSA balance will stay in the account as long as it is in there.  There is no deadline for using the funds.  Employees can build up the funds for a rainy-day health care bill well into retirement.  There is even the option to invest the funds to help the HSA funds grow. 

All kinds of uses.

HSA funds can be used for health, dental, and vision expenses. 

Good, better, best.

There is no right or wrong way to use the HSA when it comes to health care.  It’s GOOD to save and cover the typical annual health care expenses, BETTER to save and cover the deductible that comes with health insurance and the out-of-pocket expenses, and it’s BEST to contribute the maximum limit to build a cushion for emergencies, unexpected costs, and health care expenses during retirement. 

Let BASE® help you celebrate HSA Day by providing more information regarding HSAs as many employers are finding themselves re-examining their strategy when it comes to both pay and the overall employee experience.  HSA Day is an opportunity to educate and influence so that we can beat the storm.  BASE® can provide a benefit that helps to care for employees’ wellness needs, including the assistance of the My HSA Planner tool.

For more information on the BASE® Health Savings Account, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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